1. Assessing employer skills and training needs in the UK JORNADA HISPANO BRITANICA SOBRE FORMACIÓN PARA EL EMPLEO Fundación Tripartita, Madrid, 23 May 2013 Genna Kik Senior Manager, UKCES

2. 2 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

3. 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 Impact Investment Intelligence 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

4. Commissioners 4

5. Skills play a vital role in performance Firms in the UK that don’t invest in training, are on average... Twice as likely to fail And this varies by sector... Manufacturing Construction Hotels and Restaurants Retail and Wholesale Transport and Comms Likelihood of business failure 2x 4x 9x

6. 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

7. 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 SkillsHigh Skills 21 st 25 th 13 th 25 th 26 th 11 th Source: UK Commission projections Projected UK ranking for 2020, out of 33 OECD countries Fall in ranking Improved ranking

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

9. Key resources for decision-makers UK Commission’s Employer Skills Survey 87,500 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 Survey 15,000 interviews To understand employer perspectives of recruitment and young people development Young People Apprenticeships Work placements

10. Assessing Skills and Training Needs Employer Skills Survey Working Futures Almanac EPS Strategic LMI Ambition 2020 National Strategic Skills Audit LMI for All Sector Insights Underpinning data Overarching analysis Outward facing products SSAs

11. Example: The Strategic Skills Audit 2010 Comprehensive approach to assessing skills needs To 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 Intermediaries

12. The Structure of the Audit Employment: jobs and skills Skills (mis)matches Drivers of change Key sectorsKey occupations Priorities for action Projections Significant sectors and their skill deficiencies Emerging sectors Cluster and SSC studies Projections Cluster and SSC studies

13. Identifying Priorities Strategic Skills Audit (2010)

14. Skills Audit Priorities(2010) Priority RED High priority skill needs with scale and/or long lead time – for immediate action Occupation and/or skillsLevelKey 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 surgery Pharmacists Qualified social workers Science and technology professionals 4+Pharmaceutical and medical technology industries Traditional and advanced manufacturing Low 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

15. 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?

16. 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 know if they want to do more Would like to do more training Do sufficient training to meet needs 26% (0.6 ml) 15% (0.3 ml) No training need 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?

17. 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 challenge What 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 challenge Is 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)

18. 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 Average 59% Source: UK Commission’s Employer Skills Survey (2011)

19. 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)

20. 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)

21. 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 private40 Commercial35 Third sector11 Any public14 FE College12 HEI6

22. UK Commission’s Employer Perspectives Survey (2012) Which partners are key?

23. 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)

24. Where will the growth come from? Projected UK employment change by sector (000s) between 2010-202 Change (‘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)

25. 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 growth Source: Working Futures

26. LMI for All LMI for All will be an online portal where the data is stored Developers will access LMI for All to get data to build websites and apps Data sources will be pulled or pushed into LMI for All

27. @UKCES genna.kik@ukces.org.uk www.ukces.org.uk/ourwork/research/lmi