23/02/2016

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NI Skills Barometer

KESS

Presentation

Mark Magill

February 2016

Agenda Background to the NI Skills Barometer

Overview of approach

Demand for skills

Supply of skills

Supply/ demand (im)balance

Policy comments

Annex 1: What else is the evidence telling us about the existing labour market?

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Background to the

NI Skills Barometer

Background to the NI Skills Barometer

DEL sponsored 3 year project

Broad number of stakeholder groups/ users including:

− young people, parents and careers advisors

− employers

− education institutions

− DEL

Skills forecasting ‘tool’

Economy wide and across a broad range of skills/ qualifications

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Overview of Approach

Quantitative analysis

Demand side

indicators

• Demand for jobs (by industry and occupation)

• Expansion demand

• Replacement demand

• Demand for skills

• Current and Projected skills mix

• HE and FE skills (by subject area and NQF level)

Supply side

indicators

•Supply of people

• Demographics (by industry and occupation)

• Immigration

• Supply of HE and FE skills (by subject area and NQF level)

• Attainment

Supply/ Demand

(im)balance

• Identify the annual average supply gap

• by HE (JACS) and FE (SSA)

• by NQF Level

Identify demand and supply factors

Plan for

high growth

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Sectoral insight also essential

Consulting with a wide range of sector/ industry organisations

Quantitative AND qualitative input is critical:

to review and enhance our quantitative analysis

provide sector insight

Demand for skills

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Employment projections by sector

Total employment change by 1 digit SIC (2015-25)

Source: UUEPC

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

Baseline Scenario

High Growth Scenario

Overview of demand Total employment

831,000

(2015)

918,400

(2025)

Annual average Gross demand

85,200

(2015-25)

Filled from within the

existing labour market

55,900

(2015-25)

Net requirement from

education & migration

29,300

(2015-25)

Replacement

demand

20,200

Expansion

demand

9,100

Focus of the

Skills Barometer

Source: UUEPC

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20,433

9,595

11,861

5,045

8,934

4,582

7,278

6,063

3,036

8,379

0 5,000 10,000 15,000 20,000 25,000 30,000

Below NQF 2

NQF Level 2

NQF Level 3

NQF Level 4-5

NQF Level 6+

Number of people

Filled from within existinglabour market

Net requirement

Gross demand by level of qualification Annual average gross demand for skills (2015-25)

• This charts sets out the annual average gross

demand (i.e. 85,200) by skills level.

• The largest net requirement (i.e. from

education) is at the graduate level, followed by

NQF L2 and then NQF L3.

• Overall large demand for low level skills (below

NQF L2) but a very significant proportion of

that demand will be met from within the

existing labour market. Demand for people

with low/ no skills from education is small.

55,900 jobs filled from within the existing

labour market

29,300 jobs required from education and

migration Source: UUEPC

Annual average net requirement from education and migration (2015-25)

Current forecast: 16%

2009 forecast: 22%

Net requirement by skills level

0 2,000 4,000 6,000 8,000 10,000

Below NQF 2

NQF Level 2

NQF Level 3

NQF Level 4-5

NQF Level 6+

Number of people

8,380

3,030

6,060

7,280

4,580

Total = 29,300 p.a.

28% job opportunities

require NQF L6+

Source: UUEPC

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-2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000

Public admin & defence

People employed by households

Water supply & waste

Mining

Elect' & gas

Real estate

Agriculture

Other service activities

Finance & insurance

Arts & entertainment

Transport & storage

Education

Information & communication

Health & social work

Professional scientific & technical

Construction

Admin' & support services

Restaurants and hotels

Manufacturing

Wholesale & retail

Number of people demanded

Expansion

Replacement

Demand by industry sector Annual average net requirement (2015-25)

29,300 p.a.

Source: UUEPC

Public sector contains almost half of the higher

skilled population

Source: UUEPC

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Sectoral demand (net requirement) by skills level Which sectors recruit high (L6+) and medium skilled (L4-5) people?

18%

11%

10%

10%8%8%

9%

6%

4%

5%

5%5%

2%

-1%

High level skills requirement (Level 6 and above)

Professional scientific & technical

Information & communication

Health & social work

Manufacturing

Admin' & support services

Education

Wholesale & retail

Restaurants and hotels

Finance & insurance

Construction

Arts & entertainment

Other

Real estate

Public admin & defence

18%

25%

15%

9%

8%

6%

4%

3%4%

3%

2%2%

Sub-degree level skills requirement (Level 4 and 5)

Admin' & support services

Health & social work

Information & communication

Education

Wholesale & retail

Manufacturing

Professional scientific & technical

Restaurants and hotels

Other

Construction

Other service activities

Arts & entertainment

Source: UUEPC

Sectoral demand (net requirement) by

skills level

Which sectors recruit medium to lower skilled (L3 and below) people?

22%

14%

13%12%

10%

5%

5%

3% 3%

3%

3%3%

2%

Mid to low level skills requirement (Level 3 and below)

Wholesale & retail

Restaurants and hotels

Manufacturing

Construction

Admin' & support services

Transport & storage

Professional scientific & technical

Health & social work

Other

Agriculture

Information & communication

Other service activities

Arts & entertainment

Source: UUEPC

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Supply of skills

Based on current trends NI continues to supply a

pipeline of low skills

Highest qualification of school leavers

Source: DE, DEL, UUEPC

81,000 pupils projected to leave

school without achieving at least

5GCSE’s including English and

Maths over the coming decade

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But a smaller proportion of low achievers enter the labour market

immediately Number of school leavers becoming economically active after qualifying

Source: DE, UUEPC

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

20

15

/16

20

16

/17

20

17

/18

20

18

/19

20

19

/20

20

20

/21

20

21

/22

20

22

/23

20

23

/24

20

24

/25

Nu

mb

er o

f sc

ho

ol l

eave

rs e

nte

rin

g th

e la

bo

ur

mar

ket

No qualifications Level 1 Level 2 Level 3

Low school achievement feeds FE supply

Number of individuals qualifying from FE by NQF levels

Source: DE, UUEPC

0

5,000

10,000

15,000

20,000

25,000

30,000

Entry Level 1 2 3 4 5 6 7

Nu

mb

er o

f in

div

idu

als

qu

alif

yin

g fr

om

FE

68% below level 3

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Economy wide supply of skills

Source: DEL, DE, UUEPC Supply of skills

Supply/ Demand (im)balance

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Supply Gap – NQF Level Annual average labour market supply gap (NQF L1 to L8)

Source: UUEPC

NQF level 6+ Supply Gap – Broad subject area Annual Average Supply Gap NQF L6+ (JACS 1 digit)

Under-supply

Over-supply

STEM mainly Public Sector

-500

-400

-300

-200

-100

0

100

200

300

400

500

600

Nu

mb

er

of

Gra

du

ate

s

Source: UUEPC

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Top 15 Annual Average Undersupply (2 Digit JACS)

NQF L6+ Undersupply – Detailed subject area

0 50 100 150 200 250 300 350 400 450

Others in technology

History by period

Design studies

General engineering

Physical geographical sciences

Marketing

Chemistry

Physics

Mathematics

Mechanical engineering

Information systems

Electronic & electrical engineering

Civil engineering

Nursing

Computer science

Annual supply

Source: UUEPC

NQF L6+ Oversupply – Detailed subject area Top 15 Skills Annual Average Oversupply (2 Digit JACS)

0 50 100 150 200 250

Others in social studies

Architecture

Media studies

Pharmacology, toxicology & pharmacy

Law

Sport & exercise science

Others in subjects allied to medicine

Nutrition

Sociology

Anatomy, physiology & pathology

Politics

Academic studies in education

Psychology

Training teachers

Social work

Annual supply gap

Source: UUEPC

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Annual Average Supply Gap NQF L4-5 (SSAs 1 digit)

Under-supply

Over-supply

NQF L4-5 Supply Gap – Broad subject area

-100

0

100

200

300

Nu

mb

er

of

Gra

du

ate

s

Source: UUEPC

0 50 100 150 200 250

Hospitality & Catering

Building & Construction

Sociology & Social Policy

Law & Legal

Manufacturing Technologies

Creative Arts

ICT Practitioners

Engineering

Nursing & related

Science

Annual supply gap

NQF L4-5 Undersupply – Detailed subject area

Top 10 Skills Annual Average Undersupply (2 digit SSAs)

Source: UUEPC

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Policy comments

Policy Comments The following policy comments have been made from the analysis:

High levels of job creation is required

Lower economic growth could create over-supply.

Large numbers of skilled people will leave NI if employment opportunities are not available for them.

This is preferred to an under-supply of skills

Skills implications of austerity

lower levels of government spending and recruitment levels will reduce demand for skills.

BUT Government spending and demand will increase in the medium to long term, therefore care must be taken with the policy response so as not to lose the capability to deliver this training in the interim.

In the short term, more skilled people for the private sector.

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Policy Comments There is a need to over-supply

Employers indicate that not all qualifiers have the skills required to work at level equivalent to the qualification achieved.

How do we deal with this issue?

Potentially linked to the need for employability skills

Strong need for employability skills such as: team working; good communication; people management; problem solving and critical/ objective thinking, initiative, commercial acumen.

Education institutions must integrate the development of these skills into course delivery.

Students must get appropriate exposure to meaningful work experience, typically through placement and/ or internship.

Balancing the responsibility of the education institution and the responsibility of the employer.

Policy Comments Policy response to areas of oversupply – avoid an initial (knee-jerk)

response to simply reduce provision (and this may be necessary), but alternatives exist:

Selling NI as a FDI location to industries requiring those skills

Education institutions could sell over-supplied courses to international students

Conversion courses

The image of FE

The image of FE must be considered the equal of HE, if all young people are to match their career choices with their abilities.

Setting appropriate funding incentives

If Government want to encourage improved outcomes (e.g. higher employment outcomes), then the funding regime should incentivise and reward those outcomes.

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Policy Comments

Sector attractiveness

Some sectors need to work harder to make their industry attractive to potential recruits.

Companies should broaden their search criteria

Employers should consider the skills developed across a broad range of qualifications. Do not focus solely on traditional sector qualifications

Annex 1: What else is the

evidence telling us about the

existing labour market?

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Work readiness is a problem Number of school leavers becoming economically active after qualifying

Source: DE, EPC

Employability skills crucial

Source: DE, UUEPC

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Work readiness is a problem Number of school leavers becoming economically active after qualifying

Source: LFS

How skilled are we? Employed - >35 Employed - <35

NQF level 2: 5+ GCSE’s

NQF level 3: 2+ A-Levels

NQF level 4-5: Sub-degree

NQF level 6: Undergraduate degree

NQF level 7: Masters degree

NQF level 8: PHD

Source: Labour Force Survey

No qualifications,

13%Other

qualifications, 4%

Below NQF 2, 11%

NQF Level 2, 15%

Trade apprenticeshi

ps, 6%

NQF Level 3, 11%

NQF Level 4-5, 16%

NQF Level 6, 13%

NQF Level 7, 9%

NQF Level 8, 1%

No qualifications,

6%

Other qualifications,

4%

Below NQF 2, 8%

NQF Level 2, 18%

Trade apprenticeshi

ps, 4%

NQF Level 3, 22%

NQF Level 4-5, 11%

NQF Level 6, 21%

NQF Level 7, 6%

NQF Level 8, 1%

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How skilled are we? Employed Unemployed

NQF level 2: 5+ GCSE’s NQF level 3: 2+ A-Levels NQF level 4-5: Sub-degree NQF level 6: Undergraduate degree NQF level 7: Masters degree NQF level 8: PHD

Source: Labour Force Survey

No qualifications,

10% Other qualifications,

4%

Below NQF 2, 10%

NQF Level 2, 16%

Trade apprenticeshi

ps, 6%

NQF Level 3, 15%

NQF Level 4-5, 14%

NQF Level 6, 16%

NQF Level 7, 8%

NQF Level 8, 1%

No qualifications,

18% Other qualifications,

4%

Below NQF 2, 16%

NQF Level 2, 24%

Trade apprenticeshi

ps, 9%

NQF Level 3, 17%

NQF Level 4-5, 2%

NQF Level 6, 7%

NQF Level 7, 2%

NQF Level 8, 1%

How skilled are we? Employed Inactive excluding students

Source: Labour Force Survey

NQF level 2: 5+ GCSE’s NQF level 3: 2+ A-Levels NQF level 4-5: Sub-degree NQF level 6: Undergraduate degree NQF level 7: Masters degree NQF level 8: PHD

No qualifications,

10% Other qualifications,

4%

Below NQF 2, 10%

NQF Level 2, 16%

Trade apprenticeshi

ps, 6%

NQF Level 3, 15%

NQF Level 4-5, 14%

NQF Level 6, 16%

NQF Level 7, 8%

NQF Level 8, 1%

No qualifications,

40%

Other qualifications,

5%

Below NQF 2, 12%

NQF Level 2, 14%

Trade apprenticeshi

ps, 5%

NQF Level 3, 9%

NQF Level 4-

5, 8%

NQF Level 6, 5%

NQF Level 7, 3%

NQF Level 8, 0%

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Thank you

Mark Magill

Senior Economist

T: 02890 366245 E: md.magill@ulster.ac.uk W: www.ulster.ac.uk

Twitter: https://twitter.com/MarkMagill1982

LinkedIn: http://uk.linkedin.com/pub/mark-magill/14/62a/296/