Skills Utilisation: does it matter? A perspective from the UK Commission for Employment and Skills Lesley Giles UK Commission for Employment and Skills Deputy Director of Research and Policy Unionlearn Learning & Skills Policy Network Meeting Trade Union Congress 8 November 2010

The Skills and Jobs Challenge: A strategic framework to explore utilisation Skill levels not increasing at a sufficient rate relative to international competitors – need to raise individual aspirations: skills upgrading Is the system responsive enough? Matching supply and demand –mismatch –trust providers –‘Right skills’ economically valuable Is Employer Demand Ambitious enough? Raise demand and skills use –high value jobs –High Performance Working –Increase skills utilisation 2

We have a highly skilled workforce? Significant new growth but massive replacement demand 13,449 Over 100% of all expansion demand Over 50% of all job demand Source: UKCES, Working Futures , January 2009

But areas of significant mismatch? Growing under-utilisation and under-employment of skills 4 Policy (Ch 7) (Ch 3&4) (Ch 5) (Ch 6) (Ch 2)

A problem of demand? Changes in high skilled demand and supply ( ) Source: Ambition 2020, Chart 7.1, p OECD, Education at a Glance 2008, Table A1.3a and Table 1.6 Supply growing 7 times faster than Demand! 5

Is High Performance Working an answer? One means to encourage better skills utilisation ability: skills, training education application: OD product market strategy access: resourcing recruitment succession DeploymentDevelopment Individual capability Organisational capability attitude: employee engagement/ involvement

What we have found: Low take up, varying from a fifth to just over a quarter Strong sectoral variations e.g. higher take up in manufacturing, public sector Key influencing factors include: greater international competition/market pressures; advanced technology; greater consumer demand; high value goods and services; firm size. Wide range of barriers to take up: –Ignorance –Doubts & inertia (perceptions of costs vs benefits & pressures for short term financial returns) –Inability (capacity and capability of M&L) –Wider context – environment e.g. regulation How and where can we improve take up? Challenges for HPW & skills utilisation?

Developing a New Ambition for Employers: The need for a strong social partnership 8 Policy (Ch 7) (Ch 3&4) (Ch 5) (Ch 6) (Ch 2)

Thank you Questions Further Information: 9