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Greater Lincolnshire Employer Survey 2014

  • Businesses rate the area highest in terms of access to customers, the range of available housing and strong communities.
  • Approximately 70% of priority sector employers give Greater Lincolnshire a positive or very positive rating as a place their business can grow.
  • Greater Lincolnshire is rated lowest for its transport infrastructure, its image as seen by external suppliers and customers, and its ability to attract people to move to the area to work.
  • Poor transport infrastructure is cited by 30% of private sector employers as an obstacle to business growth.
  • One in eight employers (13%) is considering relocating their business in the next two years, with just 2% considering locating outside of the area.

Introduction

The Greater Lincolnshire Employer Survey was commissioned on behalf of the Greater Lincolnshire LEP to give a snapshot of business trends. The findings will support future economic planning and decision making. A total of 1,515 employers across Greater Lincolnshire were surveyed by telephone in April and May 2014. The survey gives a statistically robust picture of business performance and opinion on a range of topics. These topics include markets and trading, growth and innovation, finance and investment, recruitment, employment and skills, and the environment. Businesses were also asked for their perception of Greater Lincolnshire as a place to do business.

The survey was conducted at a time of relative economic optimism as demonstrated by the high proportion (65%) of businesses reporting improved performance during the previous year and an equally high proportion (72%) anticipating growth over the coming twelve months. It supports findings from the Quarterly Economic Survey of businesses in Lincolnshire which has been reporting improving business conditions and growing optimism since the beginning of 2013.

Doing business in Greater Lincolnshire

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The survey found that the majority of businesses (93%) have always been located in Greater Lincolnshire. The area has a very stable and established business community with two thirds trading in the area for more than ten years.

Businesses rate the area highest in terms of access to customers and aspects of living in the area, including the range of housing and strong communities. Approximately 70% of priority sector employers (Agri-Food, Manufacturing/ Engineering and Visitor Economy) give Greater Lincolnshire a positive or very positive rating as a place their business can grow.

Greater Lincolnshire is rated lowest for its transport infrastructure, its image as seen by external suppliers and customers, and its ability to attract people to move to the area to work. This is particularly so for employers based in East Lindsey and Boston, and private sector businesses in the Health and Care priority sector.  A high proportion (45%) of Manufacturing/Engineering priority sector employers also rate access to skilled staff as poor.

Businesses said low cost premises, access to funding, and access to local training were important to growth. However, poor transport infrastructure is cited by 30% of private sector employers as an obstacle

One in eight employers (13%) is considering relocating their business in the next two years, with just 2% considering locating outside of the area.

Business Growth

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  • 65% of employers reported an increase in financial measure, including profitability, turnover, sales and market share in the last 12 months.
  • 72% of businesses expect performance to improve over the next 12 months.
  • More than half of employers said having suitable, low cost premises, access to funding, the availability of highly skilled labour, and access to local training were important to growth.

The Employer Survey paints a buoyant picture in terms of local business performance and optimism, supporting findings from other recent local and national surveys including the Lincolnshire Quarterly Economic Survey.

More than a fifth of employers in Greater Lincolnshire (22%) reported an increase in the number of staff employed at their site during the last 12 months. This proportion increases with business size to 46% of 100+ employers.

Sixty-five per cent of employers reported improved performance in the last 12 months in any of the financial measures, i.e. profitability, turnover, sales and market share, whilst 72% expect improvements next year. Over half of all businesses surveyed said profits and turnover had increased last year, 40% reported growth in domestic sales, but a lower proportion (32%) reported an improvement in market share.

National surveys indicate the manufacturing sector has experienced strong growth. This also appears to be the case locally with a higher proportion (69%) of Manufacturing/Engineering sector employers reporting improvements in any financial measure last year and 75% expecting improvements next year.

However, of the 113 private sector Health and Care businesses interviewed for the survey, only 43% reported improvements in any financial measure over the past 12 months (compared with 65% in total). Only 47%, (compared to 72% of all businesses) said they expected improvements next year. The Health and Care sector has been highlighted as an important emerging sector for the local economy due to the potential for growth arising from an increasingly ageing population. This potential however, does not appear to be having an impact on either sector optimism or growth; a factor which may be worth further investigation.

Innovation

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  • 38% of all businesses introduced new or significantly improved products or services in the last 12 months rising to 47% of the Manufacturing/Engineering sector.
  • The majority (59%) of employers that have introduced new or improved products have collaborated with others (mainly other businesses) in developing their ideas.

Compared to findings from a national survey in 2012, Greater Lincolnshire employers are less likely to have introduced new or improved products or services (38%, compared with 43%), but these new products or services are more likely to be completely new (22%, compared with 17% in SBS 2012). Manufacturing/Engineering exporters are significantly more likely than non-exporters to have recently introduced new or significantly improved products or services (57%, compared with 35%).

Exporters are significantly more likely than non-exporters to have recently introduced new or significantly improved products or services (57%,

The majority (59%) of employers that have introduced new or improved products have collaborated with others outside of their organisation to develop new ideas. Around one in ten employers that collaborate with others do so with public sector based business development organisations/services (11%), higher or further education institutions (8%) and/or government departments (8%).

E-commerce

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  • Three quarters of employers have a web-site and 44% of those with a website use it for advertising only
  • Around half of employers do not make use of social media
  • The vast majority of employers (86%) agree that having access to superfast broadband is important for their business

Three-quarters of employers (both private and public sector) have a website, 24% still do not have a website. 44% of those with a website use it for advertising only

Around half of employers do not make use of social media in their marketing. Of those that do so, Facebook is the most popular media at 85%, with Twitter at 54% and Linkedin at 17%.

Younger businesses (established less than 5 years) are more likely than longer established businesses to use social media at all (65%, compared with 44%) and to cite any of the reasons for doing so.  

  • Raising the company profile: 58% of young businesses; 39% of more established businesses
  • Driving traffic to the website: 31% of young businesses; 23% of more established businesses
  • Engaging with and informing customers: 45% of young businesses; 31% of more established businesses

Nearly all employers (93%) agree that universal access to superfast broadband (i.e. 25mbps+) is important for the local economy. Fewer, but still the vast majority of employers, (86%) agree that having access to superfast broadband is important for their business. Employers that export and have a website are significantly more likely than those that do not export or do not have a website to strongly agree that access to broadband (superfast broadband in particular) is important. Two-thirds (67%) of all respondents agree that access to broadband for home-working is important for their business.

The results indicate that there remains considerable scope for improvement of e-adoption.

Recruitment

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  • Around half of employers in Greater Lincolnshire (48%) have recruited staff in the last 12 months.  
  • The most likely posts recruited for are those at the lower skill levels, semi- and un-skilled workers.
  • Of those employers who recruited, half recruited to new posts.
  • Around one in four employers that have recruited (23%) report some of the vacancies as being hard-to-fill.
  • Employers estimate that 6% of their workforce has no qualifications.
  • This rises to 10% in the Agri-Food sector and 8% in the Manufacturing/ engineering sector.
  • 18% have level 4 equivalent qualifications or above.

48% of employers in Greater Lincolnshire have recruited staff in the last 12 months. This increases to 83% of those with 10 or more staff. The most likely posts recruited for are those at the lower skill levels, semi- and un-skilled workers. Of those employers who recruited, half recruited to new posts. Priority sector businesses are more likely to recruit to new posts than average.

The UK Commission Employer Skills Survey 2013 warned economic growth may be constrained by skills shortages with particular sectors being harder hit than others. Locally, 19% of employers cited this issue as a barrier to growth, rising to 30% of Manufacturing/Engineering priority sector employers.

Around one in four employers that have recruited (23%) report some of the vacancies as being hard-to-fill. This equates to 11% of all employers. The UK Commission Employment and Skills Survey 2013 reports the number of skills shortage vacancies has doubled since 2009. It also found that professional skills are currently the most difficult to recruit and this is borne out by local findings. Of those businesses in Greater Lincolnshire that tried to recruit 28% found professional vacancies hard to fill.
Twenty-three per cent found managerial posts hard to fill and 19% found skilled manual and technical crafts posts hard to fill.

Skills and Training

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  • Employers estimate that 6% of their workforce has no qualifications.
  • This rises to 10% in the Agri-Food sector and 8% in the Manufacturing/ engineering sector.
  • 18% have level 4 equivalent qualifications or above.

Across Greater Lincolnshire, employers estimate that 6% of their workforce has no qualifications. This rises to 10% in the Agri-Food sector and 8% in the Manufacturing/ Engineering sector. Eighteen per cent have Level 4 equivalent qualifications or above, but employers in the Agri-Food sector estimate only 9% of staff have this level of qualification.

One in ten employers (10%) reported a significant gap between the type of skills that employees have now and those that they need to meet their current business objectives, rising to 15% of Manufacturing/Engineering sector employers. Seventeen per cent report they have staff who are not full proficient in their role. This compares to 15% nationally.

The proportion of Greater Lincolnshire employers funding or arranging training for their staff in the last 12 months is on a par with national surveys (64% compared with 66%). Training is mainly delivered by private training providers, with around one in four employers that have delivered training using public sector educational FE/HE institutions in the area. Training delivery can be limited by the capacity of the business to release employees for training and by cost. In addition almost half have difficulty finding suitable training.

Markets and Trading

 

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  • Almost three quarters of businesses use suppliers based in Greater Lincolnshire with 23% saying all their suppliers are local.
  • The manufacturing sector however, buys most of their supplies from elsewhere in the UK.
  • Local suppliers are not used mainly because the products or services are not available (to their knowledge) in the area.
  • Overall one in eight (13%) private sector employers exports

Supply Chains

Almost three quarters of businesses use suppliers based in Greater Lincolnshire with 23% saying all their suppliers are local. Employers within public administration/education/health and agriculture/fishing sectors are more likely to source locally, whilst manufacturers obtain the majority of their supplies from elsewhere in the UK. Where employers do not use local suppliers, it is mainly because the products or services are not available (to their knowledge) in the area. This supports findings of earlier research which found gaps in the local supply chains, particularly in the manufacturing/engineering sectors.

Exporting

Overall one in eight (13%) private sector employers exports with 35% of manufacturers and 30% of large businesses (employing 100+ on site) exporting. Fifty-five per cent of exporters anticipate an increase in their level of exports in the next 12 months (67% of exporting manufacturers).

Just 3% of non-exporting employers plan to begin exporting in the next year.

Finance and Investment

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  • One in four employers said finance is a barrier to growth
  • One in six private sector employers (16%) sought finance in the last 12 months.
  • The most common reason was for business expansion or growth.
  • A third of employers that sought finance experienced difficulty in arranging it.
  • More than four in five private sector employers (84%) expect to invest in the business in the next 2 years.

One in four employers said a lack of capital for investment and/or poor cash flow were barriers to growth. Cash flow was markedly more of an issue for the construction and production sectors at 32% compared with 22% of service sector businesses.

One in six private sector employers (16%) sought finance in the last 12 months  This proportion increases to 33% where businesses have 100+ employees. The most common reason for seeking finance was for business expansion or growth.
However, more than a quarter of employers seeking finance (26%) did so simply to obtain working capital or improve their cash flow, whilst (17%) sought finance for capital equipment or vehicles  A third of employers that sought finance (33%) experienced some difficulty in arranging it.

More than four in five private sector employers (84%) expect to invest in the business in the next two years, rising to 89% of private sector Health and Care employers and 91% of Manufacturing/Engineering priority sector employers.

The Environment

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  • A third of Greater Lincolnshire employers (33%) report having introduced energy efficiency measures in the last 12 months.
  • More than half the employers (57%) agreed that their business is concerned about flood risk.

A third of Greater Lincolnshire employers (33%) report having introduced any energy efficiency measures in the last 12 months. Nearly all employers (96%) agree that their business is taking some action or has a pro-active approach to environmental issues and energy

More than half the employers (57%) agreed that their business is concerned The level of concern is highest in Boston (52%) and amongst employers in the Agri-Food priority sector (32%).

Further information

Full Report

The survey was undertaken by BMG Research Ltd on behalf of Lincolnshire County Council and the Greater Lincolnshire Local Enterprise Partnership.

Greater Lincolnshire is a Local Enterprise Partnership area and includes the unitary authority areas of North Lincolnshire and North East Lincolnshire, and the county authority area of Lincolnshire.

A full overview-report of the findings is available here. Further detailed analysis of the findings by the Research and Information Team, Lincolnshire County Council will be published by the LRO in the near future.

About Priority and Emerging Sectors

This report refers to priority or emerging sectors throughout. These sector are made up of groupings of businesses which are important within the local economy. These sectors are:

  • Agri-Food (includes agriculture and fisheries plus food manufacturing)
  • Visitor economy (includes hotels restaurants, and some arts, culture and leisure, activities along with transport/travel activities)
  • Manufacturing/Engineering (except food manufacturing plus engineering).
  • Health and Care (includes human health and residential and non-residential care activities)

Reports

Summary Report