Assessing employer skills and training needs in the UKJORNADA HISPANO BRITANICA SOBRE FORMACIÓN PARA EL EMPLEOFundación Tripartita, Madrid, 23 May 2013

Genna KikSenior Manager, UKCES

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Overview of the UK skills context

Close

Introducing the UK Commission for Employment and Skills

A framework for assessing skills needs

Understanding skills demand

LMI for All

Outline

About the UK Commission for Employment and Skills

More employers investing in the

skills of their people

More employers taking ownership of

skills

More career opportunities for

young people

More collective action by employers through stronger sectors and

local networks

Provide outstanding labour market intelligence which helps businesses and people make the best choices for them

Maximise the impact of employment and skills policies and employer behaviour to support jobs and growth

Work with businesses to leverage greater investment in skills

Aim: Transform the UK’s approach to investing in the skills of people as an intrinsic part of securing jobs and growth

Five assets and 100 staff to deliver on outcomes

About the UK Commission for Employment and Skills

Commissioners

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Skills play a vital role in performanceFirms in the UK that don’t invest in training, are on average...

Twice as likely to failAnd this varies by sector...

Manufacturing

Construction

Hotels and Restaurants

Retail and Wholesale

Transport and Comms

Likelihood of business failure2x

2x

2x

4x

9x

Skills have a role to play in raising future UK performance Our global performance is NOT world class and is falling

Source: OECD Employment Outlook 2011 and OECD Productivity Database 2010

Unless we transform the way we work, our workforce will not be world class

The UK especially needs to address the long tail of individuals with low skills

Low Skills Intermediate Skills High Skills

21st 25th 13th

25th 26th 11th

Source: UK Commission projections

Projected UK ranking for 2020, out of 33 OECD countries

Fall in ranking

Fall in ranking

Improved

ranking

Supporting the challenge:The role of the UK Commission’s Research

Key resources for decision-makers

UK Commission’s

Employer Skills Survey87,500 interviews

To understand employer investment and skills challenges

Monitor employer investment

Assess employer skills needs

Understand recruitment practices

Working Futures

850,000 time series extrapolations

To understand labour market prospects for next ten years

Input to careers and skills advice

Inform policymakers at national & local levels

Inform curriculum strategies

Employer Perspectives

Survey15,000 interviews

To understand employer perspectives of recruitment and

young people development

Young People

Apprenticeships

Work placements

Assessing Skills and Training Needs

Employer Skills Survey

Working Futures

Almanac

EPS

Strategic LMI

Ambition 2020

National Strategic Skills Audit

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Sector Insights

Underpinning data Overarching analysis Outward facing products

SSAs

Example: The Strategic Skills Audit 2010 Comprehensive approach to assessing skills needsTo provide a systematic overview of England’s current

and future strategic skills needs to inform:

To identify priority sectors, occupations and skills needs, in order to: provide a sense of direction to enable people and providers

to better understand and anticipate skill needs; encourage more informed choices and decisions and thus

better align behaviours with desirable outcomes; inform future investment strategies

Government and key Agencies

Education and Training

Providers

Employers, Individuals

and key Intermediari

es

The Structure of the Audit

Employment:jobs and skills

Skills (mis)matches

Drivers of change

Priorities for action

• Projections• Significant

sectors and their skill

deficiencies• Emerging

sectors• Cluster and

SSC studies

• Projections• Cluster and

SSC studies

Identifying Priorities Strategic Skills Audit (2010)

Skills Audit Priorities(2010)

Priority REDHigh priority skill needs with scale and/or long lead time – for immediate actionOccupation and/or skills Level Key sectors, industries or specialisation

Corporate Managers across many sectors

4+ Retail, business services, computing, digital media, finance and professional services, health and social care, education, public administration and hospitality

Managers and professionals with computing and software skills

4+ Especially in harnessing the potential of new media, effectively delivering multi-platform content, successful operation of networks, exploitation of broader ICTs in manufacturing , and in the service sectors

Health and social care professionals

4+ Medical specialisms such as audiological medicine, genitourinary medicine, haematology, paediatric surgeryPharmacistsQualified social workers

Science and technology professionals

4+ Pharmaceutical and medical technology industriesTraditional and advanced manufacturingLow carbon and environmental sciences - with a wide range of specialisms including biology, chemistry, physics, mathematics and statistics

Teaching and research professionals

4+ Across further and higher education, especially teacher educators.Major requirements in all science, technology, engineering and maths areas, and an emerging need for multi-disciplinary teachers and researchers across scientific, technical and business areas

What is the story?Understanding Skills Demand

Significant training investment but long term decline in training levels

World class performers but are employers investing wisely?

National picture conceals underlying trends and persistent concentrated pockets of skill

deficiencies which impact on business performance

We need a new approach to investing in skills...

Strong sector, size and spatial variations, and

structural trends in local labour markets

How can we improve partnerships to ensure future

investment really adds value?

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)

41% do not train(0.9 million)

Of those who do train:

23%(0.5 ml)

29%(0.6 ml)

8%(0.2 ml)

Do not knowif they want to

do more

Would like to do more

training

Do sufficienttraining to

meet needs

26%(0.6 ml)

15%(0.3 ml)

No trainingneed

Perceived need but met

barriers

Of those who do not train:

Key Challenge:Training investment is holding up despite the recession overall. But with 44% of businesses wanting to

train or to train more, how do we support this?

What are the messages?Employers report significant investment sums. How much training is high quality?

Across the UK,

is spent on training, however:

Half of this (£24.7 bn) is direct costs of training and

only £2.8 bn was counted as fees to external providers for

courses

The other half (£24.3bn) is the wages of those being

trained

Areas for challengeWhat balance of investment is right?

Direct investment in training is key. But where employers provide learning opportunities through high quality jobs, labour costs are important too?

Of employees training towards a qualification

Areas for challengeIs this a reflection on the quality of existing training and qualifications?

Or do current qualifications simply not fit business needs?

Source: UK Commission’s Employer Skills Survey (2011)

What are the messages?Sectors matter

When we look at investment in training by sector there is considerable variation:

85%Health & Social

Care

69%Energy

57%Manufacturing

53%Construction

52%Digital & Creative

UK Average59%

Source: UK Commission’s Employer Skills Survey (2011)

What are the messages?Geography matters

Vast amount of data available to a very low geographical

level.

Trends

Variance by nation less than within nation (although Scotland trains more than the rest of UK)

A slightly higher

proportion of employers in Scotland train

their staff compared to

the rest of the UK

Welsh businesses

spend proportionately less per trainee than the rest of

the UK

Example: Proportion of businesses training by local education authority in London (%)

47-52% 53-58% 59-63% 63-67%KEY:Source: UK Commission’s Employer Skills Survey

(2011)

What are the messages?Size matters

Incidence of training over the last 12 months by workplace size

Smaller establishments also:

•Spend less overall and train less overall than large

employers•Where they do train they spend more per employee

•Have higher training management costs

•Provide more on the job training

•Less likely to train towards a qualification

Source: UK Commission’s Employer Skills Survey (2011)

Internal training Offered:

63% of all establishments

27% internal only

36% provide both

11% external only

Source: UK Commission’s Employer Perspectives Survey (2012)

External training Offered:

47% of all establishments

A single market for skills?

Sources of external training

UK

Any private 40

Commercial 35

Third sector 11

Any public 14

FE College 12

HEI 6

UK Commission’s Employer Perspectives Survey (2012)

Which partners are key?

Skill deficiencies

For example, Skilled trades occupations

experience a persistent

concentration of skill shortage

vacancies (33% of all vacancies

caused by skill shortages in 2011).

Across England skills

deficiencies are not universal

(20% of establishments

have them) BUT are

concentrated and persistent and employers

report significant impacts.

Majority of businesses facing

skill deficiencies say it impacts on the

way their business

functions, issues cited include:

• Increased workload for other staff

• Delays developing new products and

services• Losing business to

competitors

Source: UK Commission’s Employer Skills Survey (2011)

Where will the growth come from?Projected UK employment change by sector (000s) between

2010-202Change(‘000s)

-170

-103

-22

237

415

1,195

Sector

Manufacturing

Non-market Services

Primary Sector & Utilities

Construction

Trade accommodation & transport

Business & other services

Private services expected to be the main engine of job growth

(2010-2020)

Source: Working Futures (2011)

Where will future jobs come from?Most net job growth (2010-2020) expected in high level occupations but job openings expected in all broad occupations due to replacement demands

Net Job Openings

(‘000s)Occupation

Managers

Professional

Associate Professional

Admin & Secretarial

Skilled trades

Caring, Leisure etc

Sales

Operatives

Elementary

1,850

3,184

2,000

1,309

1,153

1,457

939

633

1,344

Projected UK Job Openings 2010-2020

Replacement DemandNet job growthSource: Working

Futures

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@UKCES

genna.kik@ukces.org.uk

www.ukces.org.uk/ourwork/research/lmi