A perfect storm to transform our
investment approach in the UK
Lifelong Learning, Crisis and Social Change
Lesley Giles, Deputy Director
UK Commission for Employment and Skills
18 & 19 October 2012
About us: Our Commissioners
2
About us: The UK Commission for Employment
and Skills
Aim: Transform the UK’s approach to investing in the skills of people
as an intrinsic part of securing jobs and growth
Maximise the impact of employment and skills policies and
employer behaviour to support jobs and growth
Impact
Investment
Work with businesses to leverage greater investment in skills
Intelligence
Provide outstanding labour market intelligence which helps
businesses and people make the best choices for them
More employers
investing in the
skills of their people
More career
opportunities for
young people
More collective action
by employers through
stronger sectors and
local networks
More employers
taking ownership of
skills
Five assets and 100 staff to deliver on outcomes
3
Global performance is NOT world class
Source: OECD Employment Outlook 2011 and OECD Productivity Database 2010
4
There are pressures on investment
I don’t see a time when
difficult spending choices
are going to go away”
David Cameron, Daily Telegraph
interview 19th July 2012
“Today, our national debt stands at £770 billion. Within just five years
it is set to nearly double to £1.4 trillion. To put it in perspective, that is
some £22,000 for every man, woman and child in our country.”
Speech on the Economy, David Cameron (7th June 2010)
5
Upskilling rates are not making us world class
We especially need to address the long tail of individuals with low skills
Current international skills position
th
25
st
21
26th
25th
11th
13th
Low Skills
Intermediate Skills
High Skills
6
Are businesses investing wisely in skills?
There are 2.3 million businesses of 1+ employers across the UK.
Of which...
59% train
(1.3 million)
Of those who do train:
8%
(0.2 ml)
Do not know
if they want to
do more
41% do not train
(0.9 million)
Of those who do not train:
29%
(0.6 ml)
23%
(0.5 ml)
26%
(0.6 ml)
Would like
to do more
training
Do sufficient
training to
meet needs
No training
need
15%
(0.3 ml)
Perceived
need but met
barriers
Key Challenges:
• Training investment is holding up despite the recession overall
• But with only 19% of businesses adopting High Performance Working practices, is this ambitious
enough?
7
Employer investment in training
Across the UK
£49 Billion
Is spent on training.
Of
which
However:
£24.7
£13.5 Billion
Billion
£11.2
£24.3 Billion
Is tradeable
Is spent
costs
on the
(i.e.direct
Elements of
trainingcosts
that can
of training.
be outsourced)
Is non-tradeable
Is the wages(i.e.
of those
Elements
of training that
being
cannot
trained.
be outsourced)
£2.8 Billion
£3.9 Billion
on payments to
external providers
on course fees
£1.1 Billion
Other activity
8
Investment in qualifications
And this varied by business size
16%
37%
58%
23%
67%
Of employee’s trained were
training towards a qualification
66%
9
Big variations in individual learning,
Skills rich vs skills poor well established
Rich: Employed, managerial &
income £31K+, younger,
qualifications A-levels or above,
parent in education after 16.
Poor: Older, income less than
£10k, qualifications below GCSE,
no work or part-time.
Key factors: attainment at school and parents education
Learning creates a habit and leads to more learning. Over 8 out of 10 people with higher
qualifications (e.g. degree level) undertake learning compared to less than 3 in 10 with no
qualifications
Training connected with employment showing a gradual decline
10
Are individuals investing wisely in skills?
Ages
Decreasing Participation
16 - 24
Learning
participation
Young Adult
Biggest
challenge, limited
choice
25 - 39
Midlife
Work predictable,
class divisions
40 - 59
Maturity
Defined by
experiences.
Rich & poor
60 - 74
Old age
Rich retire, low
income still work
75+
Truly elderly
majority women
Income &
(Expenditure)
Motivations
Barriers
£575 wages
(£430)
Job prospects
Cost
73%
£873 wages
(£559)
Work
performance
Job
satisfaction
Help children
Time
Cost
71%
£744 wages
(£485)
Learn
something
new
Time
Cost
48%
£464 social
security
(£342)
Learn
something
new
Too old
24%
£331 social
security (£236)
Learn
something
new
Too old
79%
11
We must meet future needs, but where will the
growth come from?
Projected UK employment change by sector (000s) between 2010-2020
(Source: Working Futures)
Sector
Change
(‘000s)
Manufacturing
-170
Non-market Services
-103
Primary Sector & Utilities
-22
Construction
237
Trade accommodation &
transport
415
Business & other services
Private services expected to be
the main engine of job growth
(2010-2020)
1,195
12
What will the future jobs be?
Most net job creation (2010-2020) expected in high level occupations,
but job openings expected in all occupations due to replacement demands
Projected England Job Openings 2010-2020
(Source: Working Futures)
Occupation
Net Job
Openings
(‘000s)
Managers
1,614
Professional
2,726
Associate Professional
1,742
Admin & Secretarial
1,106
Skilled trades
930
Caring, Leisure etc
1,256
Sales
779
Operatives
535
Elementary
1,117
Job Creation
Replacement Demand
13
Where are the future jobs?
While growth will occur almost
everywhere, the north-south divide will
continue to be exacerbated.
Projected change in total employment
across the UK: 2010-2020
6-8%
4-6%
2-4%
0-2%
14
Skills play a vital role in performance
Firms in the UK that don’t invest in training,
on average...
Likelihood of
business failure
Manufacturing
2x
Retail and
Wholesale
2x
Transport and
Comms
2x
Are
twice
as
likely
to
fail
And this varies
by sector...
Construction
Hotels and
Restaurants
4x
9x
Building a new approach to investing in skills
Growth & Innovation Fund
The Growth and Innovation Fund is open to all employer representative
organisations (including Sector Skills Councils) and is an England only fund.
Employers
invested:
£22 million
Growth & Innovation
Fund invested:
£13 million
£35 Million
Supporting 16 projects that aim to
Develop innovative
Working practices
Raise professional
standards in sector
Support future growth
of the economy
Increasing the demand
for
Higher skills
Provide leadership
& management solutions
Building a new approach to investing in skills
Employer Investment Fund
The Employer Investment Fund is open only to licensed Sector Skills
Councils (SSCs) and is a UK wide fund.
Employer Investment
Employers
Fund invested:
invested:
£66 million
£46 million
£112 Million
Supporting 77 Employer led projects
that aim to
Raise ambition &
change employer
behaviours
Support better use
of skills
across sectors
Secure momentum to
support sustainable
increases in
skills levels
Drive innovation &
develop new ways
of working
Stimulate employer
investment in skills and to
improve the use of these
skills in the workplace
Building a new approach to investing in skills
Employer Ownership Pilot
The Employer Ownership Pilot is open to employers and is an
England only fund.
Employers invested:
£98 million
£165 Million
Employer Ownership
Fund invested:
£67 million
Will test new delivery
and investment
models
11,000
Apprenticeships
45,000 training opportunities
(including work experience &
work placements
18,500 full time
training opportunities
Thank you
To find out more:
More about UK Commission investment:
http://www.ukces.org.uk/ourwork/investment
Employer Skills survey:
http://www.ukces.org.uk/publications/employer-skills-survey-2011
UK Employer Surveys site:
http://employersurveys.ukces.org.uk
UK Commission research:
http://www.ukces.org.uk/ourwork/research