The right skills for the job
Department for Work and Pensions, UK
Introduction
• Skills have become the global currency of 21st century economies.
• Improving skills is essential to building sustainable growth and
stronger communities.
• A strong further education and skills system is fundamental to social
mobility.
• Employers drive skills demand – they should be leading or heavily
involved in the skills system.
• This presentation draws on material from the OECD and UK Skills
Strategy.
Skills shortages
• Skills shortages can affect growth through their adverse effects on
labour productivity. At the firm level, shortages can affect the hiring
cost per skilled worker and hinder the adoption of new technologies.
• Identifying skills shortages is not easy - genuine skills shortages
exist when vacancies remain unfilled despite attractive working
conditions.
• Cyclical skills shortages: during growth, when unemployment is
low and the pool of available workers is reduced to a minimum.
• Structural skills shortages: when certain skills are not immediately
available in the labour market, even when unemployment is high
(e.g. when new technology is adopted).
Skills mismatch
• Over-skilling: a worker whose skills are under-used. May lead to
skills loss and a waste of the resources used to acquire those skills
• Over-skilled workers are less satisfied, generating more staff
turnover and affecting productivity.
• Under-skilled workers lack the skills needed for their job, and affect
productivity.
• Skills policies should support employers in making better use of the
skills available to them. Relevant adult education and employerprovided training can help tackle skills mismatch, especially underskilling.
New and emerging skills
• Over the past 50 years there has been:
– a rise in the demand for non-routine cognitive & interpersonal skills;
– a decline in the demand for routine cognitive and craft skills, physical
labour and repetitive physical tasks.
• Current projections see this continuing.
• Employment among low-skilled workers will decline, while employment
among highly skilled workers is projected to increase, with a shift from
manufacturing to service-based economies.
• Very difficult to forecast skills needs beyond general trends – so it’s
crucial that education systems rapidly respond to new demands, which
needs involvement from employers in forecasting skills needs.
Addressing skills shortages
• Education and training systems need to have access to information
on the demand for skills and the drivers of changes in skills demand.
• Employers need to work with education and training systems to
provide that information and design training that meets their demand.
• A long-term perspective on skills development, even during
economic crisis, may reduce skills shortages and their impact on
economic growth.
• Facilitating entrance for skilled migrants can also help deal with skills
shortages in the short term if focused on occupations for which
vacancies are hard to fill.
PES role
• Skills strategy needs to be a collaborate approach, from demand, through
training design, to supply. PES can contribute to the overall strategy in
various ways, depending on institutional configuration in each country. In
many cases it will be supplying clients to appropriate training.
Examples
• The PES can work with employers to understand what they are looking for in
the labour market – both nationally and locally - and tailor their services to
clients and the training offered/bought accordingly.
• The PES can work with individuals to understand their skills, understand
what work they are looking for and whether they have the right skills for the
job – especially basic employability skills for those furthest from the labour
market.
• Effective co-operation with other Ministries (e.g. education, industry), training
institutions and businesses is crucial.
UK Skills Strategy
UK Skills Strategy - Principles
• Fairness: those first in line for help must be those least able to help
themselves. We are paying special attention to young people and
those without basic literacy and numeracy skills.
• Responsibility: while Government has a role, employers and
citizens must take greater responsibility for ensuring their own skills
needs are met. Government can provide good quality information,
the opportunity to influence the system to provide the training they
need, and access to finance.
• Freedom: Control should be devolved from central government to
citizens, employers and communities so they can play a greater role
in shaping services to ensure that they meet their needs efficiently.
UK Skills Strategy - Vision
• In the UK, the Government has been given a clear message from
business: employers want stronger literacy and numeracy skills,
greater ownership of the skills system, and a system that is more
responsive to their needs.
• We want employers to lead the skills system, rather than merely
advising on its direction. This means giving businesses the power
and responsibility to define the vocational skills needs of different
sectors and also develop new ways to meet them.
• OBJECTIVE - a skills system driven from the bottom up, able to
respond to the needs of individuals, communities and an increasingly
dynamic economy.
What we’re doing in the UK (1)
• Training providers now have greater freedom to tailor training to the
needs of the local community and economy.
• Jobcentre Plus (the PES) is playing an important role in influencing
local training, engaging with employers, colleges and providers.
• Setting up sector-based work academies to provide focused preemployment training in areas of local labour demand (e.g. care).
What we’re doing in the UK (2)
• Fully funding English and Mathematics courses for those who left
school without basic reading, writing and mathematics skills; and
reforming provision to increase the programme’s impact on economic
growth .
• Initiating a demand-led growth and innovation fund of up to £50
million of government investment a year, to support employer-led
initiatives within sectors.
• Improving the UK’s performance in Science, Technology,
Engineering and Mathematics (STEM), raising the profile of
occupations in the STEM industry with undergraduates, and
improving the quality of science teaching in schools.
What we’re doing in the UK (3)
• Increasing employer ownership of work-based training to drive up the
quality and relevance of publicly funded training. A £250m pilot over
two years to test employer appetite for skills investment if given
increased control of design and delivery.
• Created an improved careers information portal as part of the new
National Careers Service.
• Across the board, Government is committed to reducing dramatically
the bureaucratic burdens that taking part in skills development places
on employers.
Skills Anticipation – Occupational Barometer
An occupational barometer shows a forecast of shortage and surplus occupations
in a region based on the expected future labour market development.
UK Sector Employment Forecast 2012 (Manpower)
Thank you!