1 skills utilisation francis green prepared for the conference: regional skills partnerships in a...
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SKILLS UTILISATION
Francis Green
Prepared for the conference: Regional Skills Partnerships in a Global Economy, 22-23 June, 2005.
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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
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Degrees Increasingly Held
9.7
12.3 12.6
17.7
0
2
4
6
8
10
12
14
16
18
1986 1992 1997 2001
Degree Held
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Degrees Increasingly Required
9.7
13.214.1
17.3
0
2
4
6
8
10
12
14
16
18
1986 1992 1997 2001
Degrees Required
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‘Short’ Learning Times Have Shrunk
27.1
22.3 21.420.2
0
5
10
15
20
25
30
1986 1992 1997 2001
Short (<1 month) Learning Time for Job
6
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
Changes in Computing Skills, 1997-2001
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Changes in other generic skills 1997-2001
0
.05
.1
.15
change in skills
checkingclient
high-levelhorizontal
literacynumeracy
physicalplanning
problemstechnical
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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
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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 payThose 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 £17.12Other degree-holders’ jobs: £14.21.
Skills are Valued in the Labour Market 2
10
2
2.05
2.1
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2.5
All Men W omen
1992
1997
2001
Em
ploy
ee T
ask
Dis
cret
ion
Inde
x
Task Discretion Index: 1992, 1997 & 2001
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Skills Mismatches: Shortages and Under-Utilisation
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
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Figure 4.2 Trends in the Balance of Supply and Dem and for Qualifications
-5000
-4000
-3000
-2000
-1000
0
1000
2000
3000
4000
1986 1992 1997 2001
Exc
ess
Su
pp
ly (
+)
or
De
ma
nd
(-)
, '0
00
s
Level 4
Level 3
Level 2
Level 1
No qualifications
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Figure 3.2 Qualifications Dem and and Supply, 2001
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000Demand
SupplyJo
b D
eman
ds a
nd P
eopl
e S
uppl
y ('0
00s
)
Source: Table 3.6
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Individual Mismatch
3031.2
33
37
0
5
10
15
20
25
30
35
40
1986 1992 1997 2001
Percentage 'Over-Qualified'
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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).
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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
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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
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What can government do to raise skills utilisation?
• Influence demand
• Influence supply
• Influence the supply-demand match
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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
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Affecting demand as well as supply
• The state and the economy
• Advocacy
• Business advice services
• Industry standards/kite marks etc.
• State employment