1. Generic Skills Survey 2003 DRIVERS OF SKILLS NEEDS

2. Introduction Drivers of Skills Needs:  Demand Side – Industrial Structure of Area  Generic Skills – Communication & Team Working skills across most sectors  Industry Specific Skills – Customer Handling & IT skills  Size of Firms & Markets affect type of skills required  Human Resource – Aptitude, Motivation & Barriers

3. Employment Growth In Wales Largest sectors in Wales are:  Wholesale & Retail (16.5 % of total employment) - Growth  Manufacturing (15.3 per cent) – Long-term decline  Health (13.6 per cent) – Growth  Other growth sectors - Other services (including leisure) and other business services

4. Link between recruitment of new graduates and level of formal qualifications in the workforce Graduate numbers rising – qualifications being used as a screening device Graduates employed for their generic skills Larger firms more likely to recruit graduates Supply of graduates outstrips demand in some cases Recruitment of Graduates

5. Generic Skills Generic Skills highest rated by employers in all sectors:  Understanding customer needs / Communication skills Education system emphasising Essential Skills Skills gaps mainly for Communication Skills Other generic skills rated as important:-  Ability to Follow Instructions / Initiative / Team Working / Adaptability & Flexibility The shift from manufacturing towards a more service based economy will lead to the increasing importance of these skills.

6. ICT Skills ICT SKILLS – Growing in importance to all Firms  Current level for most sectors – Intermediate  Higher skills in Financial & Business Services  Lower in Construction  Growth in demand for ICT skills outpacing supply  Demand expected to rise in all sectors  Strong growth in Public Services and Utilities

7. Business Attitudes & Demand for Skills Changing Government agenda to stimulate demand Marked difference in attitudes across sectors Larger firms rate skills more highly Of employers who see benefits from investment in skills :  One third had not funded off the job training in the past year  Only 59% of employers with skills gaps had funded off the job training in the past three years  Little Regional variation in demand for generic skills

8. Supply of Skills Demographic Changes – rise in Mid Wales population Formal qualifications - Mid Wales workforce highest qualified Generic Skills – little regional variation Three-quarters say skills levels are increasing Two-thirds say they can develop the skills they need at work… ……..But only half can develop skills for the future Individuals can lack motivation to learn new skills

9. Supply of Skills

10. Conclusions & Policy Implications Drivers of Skills Needs  Largest Recruiters of Graduates are public administration, education, health, finance, insurance and other services, energy & water.  To fully utilise higher education skills in Wales & to prevent graduates leaving the country to look for relevant work – Policy should focus on attracting employers within these sectors.  Forecasting above average employment growth in the services sectors – suggests future demand for graduates likely to increase over the next five years.  Issue – growth in actual graduate jobs or employers taking on graduates for traditional school leavers jobs.  Policy needs to focus on encouraging employers to fully utilise the skills of graduates.  School Leavers – Skills lacking! Policy should concentrate on ensuring that school leavers skills are up to standards expected and required by employers.

11. Conclusions & Policy Implications Which Skills are Critical  Communication & Customer Handling  39% of employers found Communication skills lacking in school and college leavers  Importance of communication & handling skills increasing as competitive forces lead firms to use customer service as a way of gaining competitive advantage.  Policy needs to focus on improving communication skills in schools and to a lesser extent graduates and to address the gaps in the current adult workforce.  IT SKILLS – DEMAND OUTPACING SUPPLY  Policy needs to focus on brining the whole labour force up to a minimum level of IT know how.

12. Conclusions & Policy Implications ATTITUDES TO SKILLS & TRAINING  Cost of Training – Policy needs to encourage and help those employers improve their investment in skills through recognising the business benefits.  Cost of off the job training – Policy needs to address ways of making this more accessible and affordable, particularly to micro and smaller businesses.

13. Conclusions & Policy Implications REGIONAL VARIATIONS  Little variation in the need for generic skills – main exception Welsh language skills North & Mid Wales.  Formal Qualifications – only the North does not have a competitive advantage, but has a relatively high supply of formal qualifications.  North enthusiastic about learning.  Policy specifically needs to encourage firms in the North to fully utilise the local labour force.  Mid Wales – significant barriers to people furthering their skills – time constraints, availability of courses in the local area were notable constraints.  Policy needs to address the accessibility of training establishments and promote remote learning.  South East – Higher average share of people with no formal qualifications.  Employees in this region most likely to feel employers did not give them the opportunity to develop skills.  Policy in this area needs to be aimed at encouraging employers to recognise the importance of developing employees skills and the benefits to business this can bring.

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