Transcript SKILLS UTILISATION Prepared for the conference: Regional Skills Partnerships in a Global Economy, 22-23 June, 2005. Francis Green.

SKILLS UTILISATION
Prepared for the conference:
Regional Skills Partnerships in a Global Economy, 22-23 June, 2005.
Francis Green
1
Outline
• Evidence of rising skills demand in the “knowledge
economy”
– Direct and indirect
• Evidence about the match between skills supply and
demand
• A framework for considering policy about skills utilisation
2
Degrees Increasingly Held
18
17.7
16
14
12
12.6
12.3
10
8
6
9.7
4
2
0
1986
1992
1997
Degree Held
2001
3
Degrees Increasingly
Required
18
17.3
16
14
14.1
13.2
12
10
9.7
8
6
4
2
0
1986
1992
1997
Degrees Required
2001
4
‘Short’ Learning Times Have
Shrunk
30
25
27.1
22.3
20
21.4
20.2
15
10
5
0
1986
1992
1997
Short (<1 month) Learning Time for Job
2001
5
Changes in Computing Skills, 1997-2001
1997
2001
essential
31
40
very important
15
15
fairly important
12
14
not very important
12
10
not at all important
30
21
total
100
100
6
Changes in other generic skills 1997-2001
change in skills
.15
.1
.05
0 checking
client
high-level
literacy
physical
problems
horizontal
numeracy
planning
technical
7
Skills are Valued in the Labour Market 1
Batchelor’s Degree Wage Premium (over 2 A-Levels)
Men: ~ 22%
Women: ~ 35%
No trend 1996-2003
8
Skills are Valued in the Labour Market 2
Examples: how using a skill is associated with higher pay
Example 1 :
Someone with A-level of equivalent as their highest qualification
Those using computers only in a very simple way or not
using them at work
£8.24 hourly pay
Those using computers with at least a moderate
level of sophistication £10.08 i.e. about 22 % more.
Example 2 :
Degree holder
Jobs where making speeches/presentations very important
or essential
£17.12
Other degree-holders’ jobs:
£14.21.
9
Task Discretion Index: 1992, 1997 & 2001
2.5
1992
1997
2001
2.45
Employee Task Discretion Index
2.4
2.35
2.3
2.25
2.2
2.15
2.1
2.05
2
All
Men
Women
10
Skills Mismatches: Shortages and UnderUtilisation
Shortages:
• around 4% have “skills-shortage vacancies”;
• around 1 in 5 establishments have “skills gaps”, implying
roughly 1.5 million employees judged by their managers
to have insufficient skills
• recent trend stable/edging downwards slightly
But some occupations suffer more than others:
skilled trades, caring occupations, sales and customer service
occupations, elementary occupations, business professionals
11
Figure 4.2 Trends in the Balance of Supply and Demand for Qualifications
4000
3000
Excess Supply (+) or Demand (-), '000s
2000
1000
0
1986
1992
1997
2001
-1000
-2000
-3000
Level 4
Level 3
Level 2
Level 1
No qualifications
-4000
-5000
12
Figure 3.2 Qualifications Demand and Supply, 2001
8,000
Demand
Supply
6,000
5,000
4,000
3,000
2,000
1,000
ca
tio
ns
1
N
o
qu
al
ifi
Le
ve
l
2
Le
ve
l
Le
ve
l
Le
ve
l
3
0
4
Job Demands and People Supply ('000s )
7,000
Source: Table 3.6
13
Individual Mismatch
40
37
35
30
30
31.2
33
25
20
15
10
5
0
1986
1992
1997
Percentage 'Over-Qualified'
2001
14
Sustainability of College Premium?
College wage
premium among
25-29 Year-Olds
1996-1999
2000-2003
%
%
Men
21
15
Women
25
21
Source: Walker and Zhu (2005).
15
Skills polarisation
Fastest growing occupations:
• At the top: consistent with the “knowledge economy”
• At the bottom:
– security and protective service workers in the business services
industries
– window dressers, floral arrangers and telephone sales persons
in the hotel and catering industry
– matrons, house parents, welfare, community and youth workers
in the public administration and sanitation industries
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In short:
• skills demand has been growing on average
• there are ongoing skills shortages reported by employers
• and some generic skills have acquired a special
shortage value in the labour market
• BUT:
• there is also a growth of low-skilled jobs
• at all levels, there is a decline in discretion, usually
associated with skill
• there are increasing numbers of people apparently
under-using their qualifications
• may be becoming more acute with the rising supply of
qualified workers
17
What can management do?
• take long-term viewpoint
• consider moves into high-value added sectors: these
require greater analytical skills, as well as a commitment
to investment in new technologies
• integrate skills planning with business strategy
18
What can government do to raise skills utilisation?
• Influence demand
• Influence supply
• Influence the supply-demand match
19
Supply leading demand
Can an abundant supply of skilled labour stimulate
increased utilisation of skilled labour?
• Pro: e.g. early adoption of computerisation in the US
• Con: long-run strategy is uncertain, and has short-run
costs (wages below expectations; dissatisfaction;
resource waste); potentially greater at regional level
20
Affecting demand as well as supply
• The state and the economy
• Advocacy
• Business advice services
• Industry standards/kite marks etc.
• State employment
21
Matching services
• encouraging linkages between enterprises and HE/FE
• strategic planning of life-long learning services to meet
local demands
• information, advice and guidance services for individuals
• work-life balance and other policies that promote
flexibility
22