Developing, activating and using skills; insights from the UK skills system

1. OECD Priority Setting
Workshop - Norway
Building an Effective Skills Strategy for
Norway
22nd to 23rd October 2013
Lesley Giles
UK Commission for Employment and Skills

2. Our Commissioners
2

3. About the UK Commission for Employment and Skills
What levers do we deploy to strengthen the skills system?
Commissioner
Insights
Research and
Intelligence
Out ambition is to
transform the
United Kingdom’s
approach to
investing in the
skills of people as
an intrinsic part of
securing growth
Delivering
Investment

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

5. Are businesses investing wisely in skills?
The nature of employer engagement
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 Challenge:
Training investment is declining in real terms, and only 19% of UK businesses are adopting High
Performance Working practices,
is this ambitious enough?

6. Is skills investment of sufficient quality?
The nature of employer engagement
Across the United Kingdom
£49 BILLION
is spent on training, however:
6
£24.7 billion is on
direct costs of training
£24.3 billion is the wages
of those being trained
these direct costs include…
£2.8 billion was counted as fees to external providers for courses
£6.8 billion was spent on training management
£3.6 billion was spent on training centres*
£9.7 billion went on the wages of trainers providing on the job training
Source: UKCESS 2011
* Training centres either on-site or off-site within the same company

7. Is skills investment of sufficient quality?
Pockets of skills deficiencies persist
Increased workload
for other staff
48%
85%
Struggle to meet
customer services
Lose business
to competitors
Delay developing new
goods or services
Key:
skills shortage
vacancies
47%
20%
44%
16%
45%
skills gaps

8. Apprenticeships
The nature of employer engagement
In total 9% of UK employers have apprentices currently on site and a further
6% offer them but don’t currently have any
Have staff undertaking
Offer but don't have
Do not currently have / offer
9%
6%
85%
Source: UKCEPS; Base: All employers

9. Work experience – a rare commodity
Placements are offered to young people by size and sector
By size
67%
47%
27%
28%
20%
Total
35%
2 to 4
5 to 9
10 to 24
25 to 99
100+
Base: 2 to 4 (3373), 5 to 9 (3415), 10 to 24 (3326), 25 to 99 (3082), 100+ (1808)
By sector
51%
31%
27%
17%
Total
19%
15%
21%
Primary sector and utilities
Manufacturing Construction
Trade, accomodation and transport Non-market services
Business and other services
Source: UKCEPS; Base: Primary (673), Manufacturing (1166), Construction (1033),Trade (4980), Business (4101), Non-market services (3051)

10. Sectors matter to skills investment
The nature of employer engagement
When we look at investment in training by
sector there is considerable variation:
85%
Health & Social
Care
69%
Energy
57%
Manufacturing
53%
Construction
52%
Source: UKCESS
Digital &
Creative
UK Average
59%

11. Where will the growth come from?
Informing plans for growth
Projected UK employment change by sector (000s) between 2010-2020
Sector
Change
(‘000s)
Manufacturing
-170
Non-market Services
-103
Primary Sector & Utilities
-22
Construction
237
Trade accommodation &
transport
Private services expected to be
the main engine of job growth
(2010-2020)
415
Business & other services
1,195
Source: Working Futures

12. Incentivising Employer Ownership of skills
Improving employer engagement and skills development
Five guiding principals…
• Creating the conditions to allow employers to take
end to end responsibility for workforce development
will drive better outcomes
• A focus on outcomes in terms of better jobs for
people and a job done better for business.
• Greater alignment of public and private training will
leverage greater private investment and create a more
responsive system.
• Simplicity and transparency work best for individuals
and employers
• Encouraging and incentivizing more collaboration
between colleges / providers and employers will deliver
better vocational learning

13. Leveraging investment
Improving employer engagement and skills development
Investment Funds
• Employer Investment Fund
• Growth & Innovation Fund
• Employer Ownership Pilot
EIF & GIF Investment so far ...
• 124 investments
• £110m UKCES
•£108m employer
EO Pilot investment so far ...
• 36 investments
• £102m UKCES
• £108m employer
“We want to encourage
employers to take the lead
in designing, developing
and delivering the training
and employment solutions
they need.”
Charlie Mayfield, Chairman
UK Commission for Employment and Skills

14. Find out more…
www.ukces.org.uk
@UKCES

15. Where will future jobs come from?
Informing plans for growth
Most net job growth (2010-2020) expected in high level occupations but job
openings expected in all broad occupations due to replacement demands
Projected UK Job Openings 2010-2020
Occupation
Net Job
Openings
(‘000s)
Managers
1,850
Professional
3,184
Associate Professional
2,000
Admin & Secretarial
1,309
Skilled trades
1,153
Caring, Leisure etc
1,457
Sales
939
Operatives
633
Elementary
1,344
Net job growth
Replacement Demand
Source: Working Futures

16. ‘An inconvenient truth’
Opportunities for Young People
Across the UK, 24% of businesses
had recruited education leavers in past
2-3 yrs.
16 yr olds
In England, Wales
and Northern
Ireland, most
businesses found
education leavers
well prepared
for work
(with preparedness
increasing with age)
59%
41%
17-18 yr olds leaving school
64%
36%
Experience of
world of work
17-18 yr olds leaving FE
72%
The minority of
employers report
issues with education
leavers. The two key
issues were:
28%
Young people leaving HE
84% 16%
Poor attitude/
Personality

17. Types of policy levers to optimise investment
Raising Employer engagement
Source: Collective measures

18. Improving market signals and information
LMI for All
Data sources will be
pulled or pushed into
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