OECD Priority Setting Workshop - Norway

Lesley GilesUK Commission for Employment and Skills

Building an Effective Skills Strategy for Norway22nd to 23rd October 2013

2

Our Commissioners

About the UK Commission for Employment and Skills What levers do we deploy to strengthen the skills system?

CommissionerInsights

DeliveringInvestment

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

Why do skills matter? They play a vital role in performanceFirms in the UK that don’t invest in training, are on average...

Twice as likely to failAnd this varies by sector...

Manufacturing

Construction

Hotels and Restaurants

Retail and Wholesale

Transport and Comms

Likelihood of business failure2x

2x

2x

4x

9x

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)

41% do not train(0.9 million)

Of those who do train:

23%(0.5 ml)

29%(0.6 ml)

8%(0.2 ml)

Do not knowif they want to

do more

Would like to do more

training

Do sufficienttraining to

meet needs

26%(0.6 ml)

15%(0.3 ml)

No trainingneed

Perceived need but met

barriers

Of those who do not train:

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?

Is skills investment of sufficient quality?The nature of employer engagement

Across the United Kingdom

£49 BILLIONis spent on training, however:

6

£24.7 billion is ondirect 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

trainingSource: UKCESS 2011 * Training centres either on-site or off-site within the same company

Is skills investment of sufficient quality?Pockets of skills deficiencies persist

Increased workload for other staff

Struggle to meet customer services

Lose business to competitors

Delay developing new goods or services

48%

85%

47%

20%

44%

16%

45%

skills shortage vacancies

skills gapsKey:

9%

6%

85%

Have staff undertakingOffer but don't haveDo not currently have / offer

ApprenticeshipsThe nature of employer engagementIn total 9% of UK employers have apprentices currently on site and

a further 6% offer them but don’t currently have any

Source: UKCEPS; Base: All employers

0.270.17 0.19 0.15

0.21

0.310000000000001

0.51

Total 2 to 4 5 to 9 10 to 24 25 to 99 100+

0.270.2

0.280.35

0.47

0.670000000000004

Base: 2 to 4 (3373), 5 to 9 (3415), 10 to 24 (3326), 25 to 99 (3082), 100+ (1808)

Source: UKCEPS; Base: Primary (673), Manufacturing (1166), Construction (1033),Trade (4980), Business (4101), Non-market services (3051)

By size

By sector

Work experience – a rare commodityPlacements are offered to young people by size and sector

Sectors matter to skills investmentThe 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%Digital & Creative

UK Average59%

Source: UKCESS

Where will the growth come from?Informing plans for growth

Projected UK employment change by sector (000s) between 2010-2020

Change(‘000s)

-170

-103

-22

237

415

1,195

Sector

Manufacturing

Non-market Services

Primary Sector & Utilities

Construction

Trade accommodation & transport

Business & other services

Private services expected to be the main engine of job growth

(2010-2020)

Source: Working Futures

Incentivising Employer Ownership of skillsImproving 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

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

Leveraging investmentImproving employer engagement and skills development

“We want to encourage employers to take the lead in designing, developing and delivering the training and employment solutions they need.”

Charlie Mayfield, ChairmanUK Commission for Employment and Skills

Find out more…

@UKCES

www.ukces.org.uk

Where will future jobs come from?Informing plans for growthMost net job growth (2010-2020) expected in high level occupations but job openings expected in all broad occupations due to replacement demands

Net Job Openings

(‘000s)Occupation

Managers

Professional

Associate Professional

Admin & Secretarial

Skilled trades

Caring, Leisure etc

Sales

Operatives

Elementary

1,850

3,184

2,000

1,309

1,153

1,457

939

633

1,344

Projected UK Job Openings 2010-2020

Replacement DemandNet job growthSource: Working

Futures

‘An inconvenient truth’Opportunities for Young People

Across the UK, 24% of businesses had recruited education leavers in

past 2-3 yrs.

59%16 yr olds

64%17-18 yr olds leaving school

72%17-18 yr olds leaving FE

84%Young people leaving HE

41%

36%

28%

16%

In England, Wales and Northern Ireland, most

businesses found education leavers

well prepared for work

(with preparedness increasing with age)

The minority of employers report

issues with education leavers. The two key issues

were:

Experience of world of work

Poor attitude/ Personality

Types of policy levers to optimise investmentRaising Employer engagement

Source: Collective measures

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

Data sources will be pulled or pushed into

LMI for All

Improving market signals and informationLMI for All