One in three defense firms struggle to hire graduates

Key facts

• Nearly one in three defense firms are unable to find graduates to hire.
• A report by the University of Manchester and CBI Economics highlights skills shortages among young people.
• Approximately 31% of defense firms reported experiencing a skills shortage.
• The primary issues cited by firms relate to sector-specific technical skills and STEM knowledge.
• Universities are encouraged to work more closely with businesses to bridge the skills gap.

A new report reveals that nearly one in three defense firms are struggling to recruit university graduates, a situation exacerbated by a skills gap despite high youth unemployment. Research conducted by the University of Manchester and CBI Economics indicates that approximately 31% of defense companies face difficulties in finding qualified graduates, a figure higher than in the clean energy and financial services sectors.

The report highlights that the primary skills deficiencies lie in sector-specific technical abilities and knowledge within science, technology, engineering, and mathematics (STEM) fields. While nearly three-quarters of defense firms already collaborate with universities, many are still experiencing a significant skills gap. This shortage is seen as a barrier to increasing productivity and expanding into new markets.

Professor Duncan Ivison, president and vice-chancellor of the University of Manchester, urged universities to be more proactive and outward-looking in their engagement with employers. He emphasized the need to effectively connect skilled individuals with the sectors that require their expertise.

Businesses also pointed to administrative complexities associated with R&D tax reliefs and restrictions on overseas subcontracting as hindrances to university collaboration. Furthermore, a "quantity issue" was cited regarding the overall number of skilled graduates available for hire. A separate report by Alan Milburn suggested that focusing on improving employment outcomes for graduates, rather than solely on the quality of their qualifications, should be a government priority.