1. LEEDS CITY REGION LABOUR MARKET ANALYSIS 2018: OVERVIEW OF KEY MESSAGES

2. Pipeline of Talent How we’re closing the skills gap APPRENTICESHIPS:
work with FE and HE to increase higher and degree apprenticeships; support businesses post reforms; and provide Apprenticeship Grants for Employers who employ their first apprentice.
ENTERPRISE IN EDUCATION:
support strategic links between employers and secondary schools to increase employer engagement and raise aspirations of future workplace opportunities.
ATTRACTING TALENT:
Discover Digital campaign which promotes digital careers in the Leeds City Region.
WORKFORCE DEVELOPMENT:
West Yorkshire Consortium of Colleges Skills Service supports SMEs to upskill staff.
LABOUR MARKET INFORMATION:
Share LMI with training providers, FE, HE to direct provision and support curriculum development.
CAREER CHANGES:
[re]boot initiative to support people to re-train and access careers in key sectors including digital.
DELIVERY AGREEMENTS:
Unique partnership with West Yorkshire colleges to realign £56m pa of Adult Education Budget spend with economic priorities.
IN-WORK PROGRESSION:
Career Learning Pilot and ESIF funded provision to support and address low pay and in-work progression.
CAREERS CAMPAIGNS:
#futuregoals campaign to raise awareness of careers within key sectors, inspiring careers choices and school resources.

3. Outline of the presentation
Background to the labour market analysis
Context: why skills are important
Selected key messages around:
Demand for skills
Supply of skills
Mismatches
Conclusions

4. Why do we analyse the labour market?
Support strategy and policy development, address market failure; measure progress against our priorities
Demonstrate to sponsors the evidence base for our interventions
Influence local learning provision in line with labour market demand
Inform careers choice by providing information on labour market opportunities
Inform action by local employers to address the skill needs of business.

5. CONTEXT: WHY SKILLS ARE IMPORTANT TO THE LOCAL ECONOMY

6. The City Region has seen a widening productivity gap with the UK average
Figure: Nominal output (GVA) per hour worked (£)
Productivity in the City Region is only 86% of UK average, as compared with 91% a decade previously
Source: ONS, Sub-regional Productivity

7. There is a strong correlation between skills and productivity performance at LEP level
Figure: High level qualifications and productivity by LEP area
Source: Annual Population Survey; ONS LEP level estimates of productivity

8. Lower proportions of workers in high skilled occupations in important sectors helps to explain low levels of productivity in City Region
Figure: Proportion of the sectoral workforce in higher skilled occupations
Source: Annual Population Survey, workplace analysis, Jan – Dec 2017
Note: Higher skilled occupations are SOC major groups 1-3; managers, professionals and associates professional / technical

9. 23 per cent of jobs pay below the LWF Living Wage across the City Region
Figure: % of employee jobs paying below the living wage (as defined by the LWF), 2017
2017 LWF Living Wage rate: £8.45
Source: Annual Survey of Hours and Earnings 2017
Note: Workplace-based

10. Skills deprivation is most prevalent in Barnsley, Bradford and Wakefield
Figure: Proportion of neighbourhoods in 10% most deprived nationally by domain of deprivation
Leeds City Region is ranked fifth out of 39 LEP areas in terms of % of neighbourhoods that fall among most deprived nationally on education training and skills
Source: Department of Communities and Local Government, Index of Multiple Deprivation
Note: The Education, Skills and Training Domain measures the lack of attainment and skills in the local population.

11. Neighbourhoods with the worst overall deprivation tend to also face skills deprivation
Neighbourhoods falling into 10% most deprived nationally in City Region
Overall deprivation
Education, skills and training
Source: Department of Communities and Local Government, Index of Multiple Deprivation

12. WHAT SKILLS ARE NEEDED, NOW AND IN THE FUTURE?

13. Overall demand for labour continues to strengthen
Figure: Trend in employment level and rate (% of working age population) Leeds City Region
Source: Annual Population Survey

14. Main sources of demand are higher skilled occupations and lower skilled caring occupations
Figure: Trends in occupational employment, Leeds City Region
Source: Annual Population Survey and Annual Survey Hours and Earnings, 2017
Note: Pay data is for Yorkshire and the Humber; bubble size reflects employment level in each occupation

15. Variety of occupational areas represented among jobs with greatest recruitment need
Figure: Top occupations in greatest demand overall, Leeds City Region, August 2017 to July 2018
Source: Labour Insight
Note: Analysis limited to management, professional and associate professional occupations

16. Communication is the most widespread “baseline” skill requirement
Figure: Top “baseline” skill types in greatest demand in three priority areas, Leeds City Region, August 2017 to July 2018
Source: Labour Insight
Note: Analysis limited to management, professional and associate professional occupations

17. Online job postings suggest that demand is greatest for digital workers
Figure: Top occupations in greatest demand in three priority skill areas, Leeds City Region, August 2017 to July 2018
Source: Labour Insight
Note: Analysis limited to management, professional and associate professional occupations

18. Skills like project management and teamwork / collaboration feature alongside core technical skills as the most in-demand
Figure: Top specialised skill types in greatest demand in three priority areas, Leeds City Region, August 2017 to July 2018
Source: Labour Insight
Note: Analysis limited to management, professional and associate professional occupations

19. Priority skill areas have differing exposure to automation
% of employment at high risk of automation by priority skill area, Leeds City Region
Estimates based on Frey and Osborne analysis, 34 per cent of jobs in City Region are at high risk over next 20 years, similar to national average – equates to 430,000 jobs
Source: LEP estimates based on Frey and Osborne (2013) and EMSI

20. Routine and lower-skilled occupations are at greatest risk of automation in City Region
% of employment at high risk of automation by occupational category, Leeds City Region
Source: LEP estimates based on Frey and Osborne (2013) and EMSI

21. Across wider economy agriculture, hospitality, distribution and manufacturing at greatest risk
% of employment at high risk of automation by industry sector, Leeds City Region
Source: LEP estimates based on Frey and Osborne (2013) and EMSI

22. WHAT SKILLS ARE AVAILABLE AND WHAT IS BEING PROVIDED THROUGH THE LOCAL LEARNING SYSTEM?

23. 2017 saw an improvement in % qualified at level 4 and above
Profile of highest qualification held by working age (16-64) population by district, Leeds City Region residents
Source: Annual Population Survey, Jan – Dec 2017

24. Qualification profile is highly variable at district level
Profile of highest qualification held by working age (16-64) population by district, Leeds City Region residents
Source: Annual Population Survey, Jan – Dec 2017

25. Participation in FE and Skills programmes continues to fall
Participation on FE and Skills programmes, Leeds City Region
Source: Department for Education

26. Apprenticeship starts declined by 3 per cent in 2016/17 following two years of growth
Figure: Trend in apprenticeship starts, Leeds City Region
Source: Education and Skills Funding Agency

27. Intermediate and young (<25 years) apprenticeship starts fell
Figure: change in apprenticeship starts between 2015/16 and 2016/17 by type, Leeds City Region
Source: Education and Skills Funding Agency

28. Engineer and construction starts fell but ICT remained steady
Figure: Trend in apprenticeship starts, Leeds City Region
Source: Education and Skills Funding Agency

29. Apprenticeship achievement rates remain similar to national average but with variations between apprenticeship types
Figure: Overall achievement rates by apprenticeship type, 2016/17
Source: Education and Skills Funding Agency

30. Disadvantaged pupils are less likely to participate in apprenticeships
Figure: % of pupils entering apprenticeships following completion of key stage 4
Source: Department for Education. 2015/16 destinations for the 2014/15 cohort (state-funded mainstream schools)

31. There has been a reduction in HE qualifiers in priority subjects
Figure: Number of qualifiers by subject area from Leeds City Region HEIs
Engineering and technology saw growth in qualifiers but computer science and built environment subjects both declined
Source: Source: Higher Education Statistics Agency
Note: UK domiciled students only

32. Disadvantaged pupils less likely to participate in higher education
Figure: % of pupils entering higher education by free school meal status
Source: Department for Education

33. Many employers would like to invest more in skills
Figure: Training equilibrium summary, Leeds City Region
65% Train
35% Don’t train
41% wanted to train more
54% do sufficient training
Don’t know 5%
28% wanted to train more
72% no training needed
All employers
59% in training equilibrium
41% wanted to undertake more training
Source: Employer Skills Survey Base: all establishments in Leeds City Region (3,943)

34. WHAT ARE THE AREAS OF SKILLS MISMATCH

35. Shortages most acute in primary, construction and manufacturing
Figure: Density of skill shortage vacancies by industry sector, Leeds City Region
Source: Employer Skills Survey 2017
Note: Density measure shows skill-shortage vacancies as a proportion of all vacancies

36. And in professional, skilled trades and machine operative occupations
Figure: Density of skill shortage vacancies by occupational major group, Leeds City Region
Source: Employer Skills Survey 2017
Note: Density measure shows skill-shortage vacancies as a proportion of all vacancies

37. Digital and engineering professionals face acute shortages
Figure: Occupational minor groups with highest density of skill shortage vacancies, Yorkshire and the Humber
Source: Employer Skills Survey 2017
Note: Density measure shows skill-shortage vacancies as a proportion of all vacancies

38. Admin and sales and customer service staff most prone to skills gaps – but managers also affected
Figure: Incidence of skills gaps by occupational major group
Source: Employer Skills Survey 2017
Note: incidence measure shows the % of employers skills gap(s) who report a gap in a given occupation.

39. Operational, analytical and digital skills need to be improved to address technical skills gaps
Figure: Technical / practical skills that need improving in occupations with skills gaps
Source: Employer Skills Survey 2017
Base: All skills gaps followed up

40. Self-management, management and leadership and sales / customer service are key areas for soft skills deficits
Figure: Soft / people skills that need improving in occupations with skills gaps
Source: Employer Skills Survey 2017
Base: All skills gaps followed up

41. Financial services prone to skills gaps in City Region
Figure: Density of skills gaps by industry sector
Source: Employer Skills Survey 2017
Note: density measure shows skills gaps as proportion of total employment in each sector.

42. Mismatches in profile of HE and local market demand
Figure: Comparison of profile of HE achievements versus projected job openings in related occupations, Leeds City Region
Source: HESA achievements data for 2016/17; Working Futures

43. Nonetheless many workers in medium / lower skilled roles are notionally over-qualified for their job
Figure: Medium and lower-skilled occupations with the greatest proportion of workers (aged 25+) qualified at level 4+; Yorkshire and the Humber
11% of workers in region are high qualified but employed in medium / lower skilled occupations
Source: Labour Force Survey, Oct – Dec 2017

44. Brexit poses potential labour supply challenges
Figure: Occupations with the highest level of EU migrant employment, Yorkshire and the Humber
Source: Labour Force Survey, Oct – Dec 2017

45. Conclusions 1 Priorities
Digital, engineering / manufacturing and construction confirmed as skills priorities
Project management, team working and collaboration and budget management skills important
General need to maintain supply of people with high level skills across most areas including health, business etc but less evidence of market failure
Management skills gaps a key priority in view of business performance and productivity context
Considerable recruitment need for care roles – less about skills deficit than general attractiveness of these roles
Replacement need across all occupations, some of which face acute shortages currently – but what are longer term prospects for young people?

46. Conclusions 2
Issues
Higher apprenticeships key element of response to rapidly changing higher level skill needs but current availability is limited
Does local skills system have capacity to respond to reskilling challenge presented by automation?
Impact of Brexit on labour supply could also stimulate demand for workforce development support
Progress on graduate retention relies on increase in demand for high level skills in the local economy
Ensuring that investment in high level skills generates best economic returns
Improved outreach mechanisms key to increasing the contribution of skills development to inclusive growth