The population for the Scottish EPS 2019 is all ‘establishments’ in Scotland that had at least two people working there (including owners and working proprietors). The sampling unit for the EPS was at an establishment level; this means that a phone interview was conducted with an individual at the site level (e.g. a ‘local office’) rather than at an organisation level (e.g. a ‘head office’). This is in recognition of the influence that local labour markets have on skills issues, and that skills issues are typically felt most acutely at the site level. This mirrored the establishment-based approach adopted in previous UK Employer Skills Surveys (ESS) and UK Employer Perspectives Surveys (EPS). The terms ‘establishment’, ‘site’ and ‘employer’ are used interchangeably through the report.
Figure 1 shows Scottish employer and employment profile by size for this population. Office for National Statistics (ONS) figures estimate that in March 2018 there were 151,200 establishments in Scotland employing over 2.4 million people between them.
The Scottish employer population is predominantly made up of small establishments as nearly three-quarters (73%) of employers have fewer than 10 staff. Since 2016, there has been an increase in the proportion of establishments classified in the smallest 2 to 4 employee sizeband. This group tend to experience skills and human resources issues differently from larger employers (e.g. in terms of recruitment and retention).
Whilst employers with 2 to 4 staff make up 50% of establishments, they employ 8% of the workforce. Employers with 100+ staff make up 2% of establishments, but employ 43% of the workforce.
The largest sectors in the Scottish economy in terms of number of establishments are ‘Business Services’, and ‘Wholesale and Retail’ (20% and 19% of all establishments, respectively); the smallest are ‘Financial Services’ and ‘Public Administration’ (both 2%).
Figure 1: Employer and employment profile by establishment size
Base population: 2,652
There is variation between the distribution of establishments and employment by sector. For example, ‘Health and Social Work’ is the largest sector by employment, accounting for 16% of all employees, whilst comprising 7% of all establishments.
In terms of business growth and outlook, 17% of establishments that have already been in business for over 12 months have increased their number of employees in the past 12 months. Amongst private sector employers, 39% expect to grow in the next 12 months, compared with 10% who expect to contract. 47% expect to remain the same and 4% are unsure.
95% of employers in Scotland have been in operation for 5 years or more.