Higher Level Skills Needs in London

Alison Morris

Rachel Pinto

January 2013

About the UK Commission for Employment and Skills

More employers investing in the

skills of their people

More employers taking ownership of

skills

More career opportunities for

young people

More collective action by employers through stronger sectors and

local networks

Provide outstanding labour market intelligence which helps businesses and people make the best choices for them

Maximise the impact of employment and skills policies and employer behaviour to support jobs and growth

Work with businesses to leverage greater investment in skills

Impact

Investment

Intelligence

Aim: Transform the UK’s approach to investing in the skills of people as an intrinsic part of securing jobs and growth

Our Commissioners

Key LMI resources from the UK Commission

UK Commission’s Employer Skills

Survey87,500 interviews

To understand employer investment and skills challenges

Monitor employer investment

Assess employer skills needs

Understand recruitment practices

Working Futures

850,000 time series extrapolations

To understand labour market prospects for next ten years

Input to careers and skills advice

Inform policymakers at national & local levels

Inform curriculum strategies

Employer Perspectives

Survey15,000 interviews

To understand employer perspectives of recruitment and

young people development

Young People

Apprenticeships

Work placements

Are businesses investing wisely in skills?

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 holding up despite the recession overall. But with only 19% of businesses

adopting High Performance Working practices,

is this ambitious enough?

Establishments carrying out any training, 2011

6

Scotland

Northern Ireland

North East

North West

Yorkshire and The Humber

South East

South West

UK average

East of England

Wales

England

East Midlands

West Midlands

London

-10% 0% 10% 20% 30% 40% 50% 60% 70%

Source: UKCES, UK Commission’s Employer Skills Survey, 2011

Unless we transform the way we work, our workforce will not be world class

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We especially need to address the long tail of individuals with low skills

Low Skills Intermediate Skills High Skills

Current international skills position

21st 25th 13th

25th 26th 11th

Productivity and employment, UK nations and English regions

0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 1.700 1.800 1.900 2.000 0.90

0.95

1.00

1.05

1.10

North East

North West

Yorkshire and the Humber

East Midlands

West Midlands

East of England

London

South East

South West

Wales

Scotland

Northern Ireland

Sources: Employment: ONS, Annual Population Survey, Jul 2011 – Jun 2012;

Productivity: ONS, Headline workplace based GVA at current basic prices

Productivity (% of UK average)

Employment (% of UK average)

Employment by sector, London

Source: ONS, Business Register and Employment Survey, 2011

13 : Professional, scientific & technical (M)

14 : Business administration & support services (N)

17 : Health (Q)

7 : Retail (Part G)

11 : Financial & insurance (K)

16 : Education (P)

10 : Information & communication (J)

9 : Accommodation & food services (I)

18 : Arts, entertainment, recreation & other services (R,S,T and U)

15 : Public administration & defence (O)

8 : Transport & storage (inc postal) (H)

6 : Wholesale (Part G)

4 : Construction (F)

3 : Manufacturing (C)

12 : Property (L)

5 : Motor trades (Part G)

2 : Mining, quarrying & utilities (B,D and E)

1 : Agriculture, forestry & fishing (A)

-2% 0% 2% 4% 6% 8% 10% 12%

Proportion of total employment (London)

Employment by occupation, London

Source: ONS, Business Register and Employment Survey, 2011

Professionals

Associate professionals

Managers

Admin. & secretarial

Elementary occupations

Skilled trades

Caring, leisure and other services

Sales and customer services

Process, plant and machine operatives

0% 5% 10% 15% 20% 25%

Proportion of total employment (London)

Hard-to-fill vacancies and skill-shortage vacancies

Yorkshire & Humber

West Midlands

North West

South West

South East

East of England

East Midlands

North East

London

0 5 10 15 20 25 30 35

Proportion of vacancies that employers find difficult to fill for any reason, 2011

North West

West Midlands

Yorkshire & Humber

South East

East Midlands

London

South West

East of England

North East

0 2 4 6 8 10 12 14 16 18 20

Proportion of vacancies that are difficult to fill because of lack of skills or

qualifications, 2011

Source: UKCES, UK Commission’s Employer Skills Survey, 2011

Where are the future jobs?

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While growth will occur almost everywhere, the north-south divide will continue to be exacerbated.

Projected change in total employment across the UK: 2010-2020

6-8%

4-6%

2-4%

0-2%

Future employment needs - but where will the growth come from in London?

Projected UK employment change by sector (% change) in London and England between 2010-2020

Change(‘000s)

-13-137

-7-80

3-5

21194

73329

2791,083

Sector

Manufacturing

Non-market Services

Primary Sector & Utilities

Construction

Trade accommodation & transport

Business & other services

13

(Source: Working Futures)

% change

London

England

Where will future jobs come from in London?

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Net Job Openings

(‘000s)Occupation

Managers

Professional

Associate Professional

Admin & Secretarial

Skilled trades

Caring, Leisure etc

Sales

Operatives

Elementary

327

663

464

143

131

169

106

65

170

Projected England Job Openings 2010-2020

Job Creation

Replacement Demand

(Source: Working Futures)

High level skills in London

London

Scotland

South East

South West

UK Average

Wales

East

North West

East Midlands

Yorkshire and The Humber

North East

West Midlands

Northern Ireland

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

Proportion of working age population with high level qualifications

Source: ONS, Annual Population Survey, Jan-Dec 2011

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Young people prepared for work

Well prepared / very well prepared Poorly prepared / very poorly prepared

Source: UKCES, UK Commission’s Employer Skills Survey, 2011

(asked to all establishments that had recruited a young person from education to their first job)

58% 39% 61% 36%

67% 29%

Preparedness of 16 year-old school leavers Preparedness of 17-18 year-old school leavers

Preparedness of 17-18 year-old college leavers Preparedness of higher education leavers

82% 15%

How do London employers support young people?

Source: Employer Perspectives Survey 2012

32% of establishments in London have had someone on a paid or unpaid work experience placement or internship in the last 12 months compared to the UK average (27%).

A lower share of London establishments (12%) currently have or offer apprenticeships at their site compared to the UK average (15%).

Conclusions

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• London has high productivity and low employment compared to the rest of the UK

• Most net job creation is expected in high level occupations

• London has a higher proportion of people with high level qualifications than the UK average

• London has a lower proportion of hard to fill vacancies than other regions

• But a relatively high proportion of these are due to skills shortages

• A lower proportion of London employers train their staff than the UK average and a lower proportion arranged training that leads to a qualification

Discussion

• Do you recognise this picture of London?

• What could the data be used for?

• What are the challenges in using data?

• How can we support and increase use?

Links and contact details

Information about our LMIhttp://www.ukces.org.uk/ourwork/research/lmi

ESS Local Datahttp://www.ukces.org.uk/local-data

Employer surveyshttp://www.ukces.org.uk/ourwork/employer-surveys

Accessing the dataemployer.surveys@ukces.org.uk

Alison Morris – alison.morris@ukces.org.ukRachel Pinto – rachel.pinto@ukces.org.uk

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