Over 1100 students attended TalentDay this year and 62 leading digital and creative businesses were offering career opportunities.

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1 Skills Audit Report Manchester Digital Manchester Digital is the independent trade association for digital businesses in the North West of England. It provides its members with unrivalled access to relevant information, knowledge and networks, giving them the chance to attend inspirational events, generate new business, set up collaborative projects and find new talent as well as the opportunity to shape the future of digital in the North West. A large part of Manchester Digital s activity is dedicated to the development of skills and talent to support the region s vibrant and growing sector. In February 2014, Manchester Digital held its annual Skills Festival, growing this year from a 2 day summit to a 4 day festival, consisting of Conference, TalentDay, Experience Day and Open Studio. The TalentDay is the largest event of its kind; a careers fair for students considering a career in digital, looking to find placements, full time work or apprenticeships. Over 1100 students attended TalentDay this year and 62 leading digital and creative businesses were offering career opportunities. The conference brought together education providers with businesses and look at digital apprenticeships, digital disruption, coding at a young age and much more. By bringing together businesses, policy makers and educational institutions, Manchester Digital is helping to shape the future policy and the provision of digital education. Ahead of the event, Manchester Digital distributed a survey to its members to gain factual insights into the demand for digital talent in the region and how businesses are dealing with ever increasing competition for talent in the sector. Chair of Manchester Digital, Tony Foggett presented and discussed the results at the Skills Festival Conference. This report is an in-depth analysis of the survey, which was completed by 74 members of the association. It is supported by data collected from the Skills Festival too.

2 Summary of key themes and insights Many employers have reported growth in the last 12 months As in 2013, employers report a large number of hard-to-fill vacancies with technical development taking the top spot Employers believe that the most important skillset over the next 24 months will be development, which is reflected by the increase in salaries to remain competitive in the labour market 85% of employers will take on graduates despite feedback suggesting that there is a lack of transferable skills, even in trained developers. Analysis from Talent Day attendees The below chart shows the subject areas that attendees of Talent Day are studying or intending to study: Broadcast, 4.5% Business, 3.7% Unknown, 20.1% Creative, 17.5% PR and Marketing, 8.7% Digital Media, 6.5% Other, 6.5% IT and Development, 32.5%

3 Representation at TalentDay was strongest from Manchester Metropolitan University and University of Salford, as it was in However, there is far more engagement from colleges and schools compared to This is due in some part to Manchester Digital s Apprenticeship Matching Scheme which has strengthened relationships with schools and colleges in the region. The below list shows how many students came from which institutions: Manchester Metropolitan University 308 University of Salford 145 University of Manchester 120 University of Bolton 67 Manchester College 54 Oldham College 48 UCLAN 47 Liverpool John Moores University 38 Blackburn College 37 Open University 26 Loreto college 24 Altrincham College of Arts 16 University of Chester 15 Priestley College 14 Xaverian College 14 City College 11 Ormiston Horizon Academy 11 Aquinas College 8 Lancaster University 7 Shillington College 5 Staffordshire University 5 Edge Hill University 3 Knutsford Academy 3 Marple College 3 Sale Grammar School 3 Stockport College 3 Trafford College 6 University of Liverpool 3 University of Bradford 2 University of Huddersfield 2 University of the Arts, London 2 Anglia Ruskin university 1 Appleton College 1 BBP University, Manchester 1 Birmingham City University 1 Cheadle college 1 Constantine the Philosopher University, Slovakia 1 Ealing, Hammersmith and West London College 1 The King David High School 1 Leeds College of Music 1 Leeds Metropolitan University 1 Liverpool Institute of Performing Arts 1 Manchester School of Art 1 Preston College 1 RNCM 1 Rochdale Sixth form 1

4 Salford City College 1 Sheffield Hallam University 1 St Anselm's College 1 Tameside College 1 Ulster University 1 University of Lincoln 1 University South Wales, Newport 1 York St John University 1

5 Analysis Q1: What type of business are you? The below chart provides a detailed breakdown of the types of digital businesses that are in the region and make up the Manchester Digital membership. From 2013, we can see some growth in client side businesses with the number of digital agencies decreasing slightly. This represents the shift in Manchester Digital membership, which has historically been agencies but is growing as digital permeates more non-digital businesses. Clientside (ecom and prof services) 10% Animation & Film 8% Digital Agency 36% Media 6% PR 6% Software 16% Design and Build 18%

6 Q2: What type of business are you? Categories % Web Design 56.2% Social Media 47.9% Strategy and Planning 46.6% E-commerce 45.2% Content Marketing and Strategy 42.5% Mobile 41.1% User Experience and Usability 39.7% Marketing 38.4% Search Marketing 34.2% Web Analytics 34.2% Web Project Management 34.2% B2B Marketing 32.9% Customer Experience 32.9% Online Copywriting 28.8% Online Advertising 27.4% Conversion Rate Optimisation 21.9% Online PR 21.9% Community Management 15.1% Multichannel Marketing 15.1% Video and Rich Media 13.7% ecrm 11.0% Animation 2D 8.2% Online Customer Service 8.2% Animation 3D 6.8% Games Development 6.8% Affiliate Marketing 5.5% Connected TV 4.1% Other 4.1% Visual FX 4.1%

7 Q3: How many people do you currently employ? The typical respondents company employs 61 people full time and 10 people part time. This data could be skewed by the number of large companies who responded to the survey. Part time 9.6% Full time 90.4%

8 Q4: Has your business grown in the last 12 months? If so how many additional roles have you recruited? The vast majority of businesses have grown in the last 12 months, with most businesses adding between 1 and 5 people to their workforce. No 16.7% Yes 83.3%

9 Q5: Please could you tell us roughly how your workforce is split? Compared to the 2013 results, there has been a significant rise in the number of Sales & Marketing staff, from 8% to 25.6%. This could be due in part to competition in the market or representative of the growth of non-digital businesses in Manchester Digital membership. Development has increased by 1.5%. Creative and project management have both decreased by 4.7% and 5.1% respectively. Admin & Finance and HR & Training have both increased by around 2%. IT & Infrastructure 4.8% User Experience Strategy 2.0% 3.3% Sales & Marketing 25.6% Client Service / Liaison 1.7% Project Management 5.9% Development 24.5% Creative 6.3% HR & Training 4.0% Admin & Finance 7.4% Management 14.5%

10 Q6: Do you have dedicated roles with the responsibility for the acquisition of talent in your business? Many businesses reported that talent acquisition was managed by senior leadership (mostly Managing Director) or office management, rather than a dedicated recruitment professional. Many companies also reported that they rely on members of staff to assist with acquisition via social media word of mouth. Yes 30% No 70%

11 Q7: What are the 3 most difficult roles to fill? The 2014 results show similar insights as Development roles are still the hardest to fill and PPC again made an appearance. However, employers reported that Sales roles are as difficult to fill as PPC. In 2013, UX featured as one of the more difficult roles to fill; in 2014, Project Managers came in second place. With further breakdown below, we can see that PHP Developers are particularly hard to fill, compared to other developer roles such as Magento, Drupal and Django. Project Managers 17% Sales 11% PPC Exec / Manager 11% Developer 61% Other developer languages, including Magento, Drupal and Django 23% PHP Developer 77%

12 Q8: Which skill sets will grow in importance to your business / output over the next 24 months? In accordance with the workforce split illustrated in question 5, we can see that over a third of respondents agreed that development would see the most growth in importance over a 2 year period. Second to this was digital marketing, again illustrated by the responses to question 5 where sales and marketing was the second most common role reported by the respondents. Account Management 13% Other (Technical, multiskilled, content marketer, digital PR, sales) 5% Business Development 3% Developers 35% Mobile 3% SEO / Analytics 7% Digital Marketing Professional 17% Designers 5% Social Media 2% Project Managers 10%

13 Q9: Have you had to inflate salaries to remain competitive in the labour market? In line with what we have been hearing anecdotally, wage inflation is becoming a huge issue for the industry with developer roles seeing the largest increase in salary of 36%. Sales & Marketing and Client Services came second and third respectively. No 53% Yes 47% Q10: Please give an indication (%) of salary increases you have made over the last 12 months This chart, broken down by job roles and relative percentages of salary increase is what the sector indicates it has seen in the last 12 months. IT & Infrastructure 11% Creative 18% User Experience 8% Strategy 10% Development 19% Sales & Marketing 12% Client Service / Liaison 9% Project Management 13%

14 Q11: What other benefits do you offer to employees to aid attraction and retention? Unsurprisingly, a great number of businesses offer flexible working hours to staff, including working from home or a flexi-time scheme. This, particularly for small businesses is a no-cost solution. Health care, gym membership and games ranked particularly low on the chart, most likely due to the associated costs. 25.0% 20.0% 19.5% 15.0% 12.2% 10.0% 9.8% 7.3% 9.8% 7.3% 7.3% 7.3% 5.0% 4.9% 2.4% 4.9% 4.9% 2.4% 0.0%

15 Q12: Which methods are the most effective when sourcing new talent? In line with the 2013 audit report, peer recommendation came out on top with both internal recommendation and social media placing second. These methods tend to be most cost effective and these findings are in line with the findings of Q5 where it was reported that some companies encourage staff to assist with acquisition through social media and word of mouth. Recruitment agencies and national advertising were the least likely methods to be used during recruitment of new talent, which may indicate that businesses are less willing to spend large amounts of money at this present time. Headhunting 12% Recruitment Agencies 10% Social Media 19% Advertising nationally 7% Internal recommendation 19% Advertising regionally 12% Peer recommendation 21%

16 Q13: Which job roles do you most outsource or use freelance talent for? Development, unsurprisingly came out top again in this part of the report, highlighting the discrepancy between businesses activity and the availability of local talent to fill this growing demand. Digital Marketing 3% We don't outsource or use contractors. 24% Development 35% PPC 3% Social Media 3% Web Design 4% Game developer and illustrator 4% Design 14% SEO 10%

17 Q14: In the last 12 months, what % of your work has been done by...? The survey found that only 6.7% of work is not done in-house, down from 10% in Freelance 5% Out-sourced locally 1.3% Out-sourced outside of Manchester 0.4% Permanent in-house staff 93%

18 Q15: Have you had to turn away work as a result of being unable to find the right talent? 27% of respondents have had to turn away work due to being unable to find the right talent. Whilst this is still alarmingly high, it is nearly 20% less than in Yes 27% No 73%

19 Q16: Do you recruit graduates? 85% of respondents reported that they do recruit graduates although only 35% ran their own graduate schemes, which is indicative of the size of businesses in Manchester Digital membership. No 15% Yes 85% Q17: Do you run your own graduate scheme? Yes 35% No 65%

20 Q18: Which roles do you find hardest to fill from local universities or colleges? Over half of all respondents found developer roles the hardest to fill from local education establishments. This is in line with our findings in Work readiness is still considered to be a huge issue by many respondents with many students lacking basic communications and transferable skills. Business Development 8% Marketing 8% Systems Administrators 7% Account Execs 8% Project Managers 8% Creative 7% Developers 54%

21 Q19: Have you taken on apprentices in the last 3 years? Only 29% of businesses have taken on an apprentice in the last 3 years, which is significantly down from 2013 (48%). This perhaps indicates a reticence by employers to take on young people with little or no experience. It may also be an indication of the quality of the training available or of the need for more work ready employees, due to time and labour constraints. Yes 29% No 71% Q20: If yes, did the apprentice meet your expectations? The main reasons given by respondents for apprentices not meeting expectation was a disconnect between the employer expectations and the capability of the apprentice. No 17% Yes 83%

22 Q21: If no, what stopped you? The main reason for respondents not taking on an apprentice was capacity/ability to manage the apprentice, which is the same as our findings from However, both the quality of applicants and the lack of suitable training/frameworks rated quite highly in this, indicating that there is still work to be done by both training providers and the government in aligning the needs of the employers with the quality of training provision and the standard of talent opting to do apprenticeships. Cost vs productivity level 10% Bureaucratic burden 7% There wasn't a framework/course that fitted your needs 17% Understanding of what is available 7% Quality of training provision 14% Capacity / Ability to manage them 28% Quality of applicants 17% Q22: How would you rate the service provided by the training company? Answers to this were obviously anecdotal. However, most businesses feel that provision is patchy but it seems to very much depend on the relationship between employer and the specific contact within the training provider s business.

23 Q23: How could Manchester Digital help your organisation and staff to learn and adapt? Based on the survey s findings, Manchester Digital will continue to run conferences, networking events and discussions. We will look to improve the provision of digital training available to our members and the wider community. We will continue to promote the North West s digital landscape across the UK and beyond. We will continue our Skills and Talent work, providing better opportunities for business to find the right talent and increasing the pipeline of work ready, qualified young talent into our member companies through our relationships with schools, universities, colleges and training providers.

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