SKILLS UTILISATION

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

• Francis Green

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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
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Degrees Increasingly Required
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Short Learning Times Have Shrunk
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Changes in Computing Skills, 1997-2001
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Changes in other generic skills 1997-2001
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Skills are Valued in the Labour Market 1
Batchelors Degree Wage Premium (over 2 A-Levels)
Men 22 Women 35
No trend 1996-2003
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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.
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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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Individual Mismatch
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Sustainability of College Premium?
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

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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