Labour force flexibilityand skills mobility –right person, right skills,

right place, right time

Anne GreenIER, University of Warwick

A.E.Green@warwick.ac.uk

Scope of presentation

• Context

• What is a healthy labour market?

• Regional and sub-regional variations in:- quantity and quality of employment- demand and supply

• Skill shortages and gaps

• Skill utilisation

• Mobility- migration- commuting

• Implications

Context

• Shift in concerns from ‘quantity’ to ‘quality’• Greater emphasis on demand• Concern with stocks and flows

• Labour market change: Decrease in unemployment Concerns about inactivity – and concentration in

particular sub-groups and areas Rise in employment → ‘tightening’ labour markets Matching supply and demand – issues of mobility and

accessibility

• Skills as a key driver of regional competitiveness (within context of overall regional development)

‘Healthy labour market’ concept

• Goal: a labour market which produces desirable results, both socially and economically, and which is sustainable over time

• 3 dimensions: strong DEMAND side – in terms of quantity and

balance /quality of jobs that the labour market generate strong SUPPLY side – relates to the numbers and

characteristics of people able to take those jobs efficient and equitable FUNCTIONING to bring together

demand and supply sides of the labour market

• appropriate supporting conditions – education, training, workforce development, benefits and welfare, housing and transport infrastructure

Mobility, flexibility and balance:scope for tension

Mobility and flexibility • Healthy labour market

emphasises movement up the skills and value chain

• Implies existence of progression routes

• Need for flexibility to adjust to change – but how much?

Fine dividing line between ‘healthy’ and ‘unhealthy’ mobility and flexibility

Balance• Job opportunities at all

levels• Success in one part of

the labour market not achieved at the expense of another part – geographical dimension

Imbalance can be ‘healthy’ as well as ‘unhealthy’: it may be a driver of desirable change

% of employment in K1-K4 categories(source: LFS, 2004 [via emda])

0

10

20

30

40

50

60

NE Y&H EM WM SW NW E SE UK L

% t

ota

l e

mp

loy

men

t, 2

004

K1K2K3K4

Employment rates, 25-49 yearsHighly qualified No qualifications

Highly qualified% 25-49 in w ork

90 to 99.999 (54)80 to 89.999 (322)70 to 79.999 (13)

No qualifications% 25-49 in w ork

80 to 89.999 (4)70 to 79.999 (142)60 to 69.999 (150)50 to 59.999 (74)40 to 49.999 (13)30 to 39.999 (6)

Skill deficiencies Skills utilisation (NESS, 2003)

• Issues of interpretation

Typology of regions on skills deficiencies

• YH and WM:> average skills deficiencies &> average non-employment

• EM, E, SE and SW:> average vacancies &< average non-employment

• L, NE and NW:< average vacancies &> average non-employment

• under-education• over-education

• ‘signalling’ function of qualifications

do industries / employers have capacity to absorb and utilise high level skills?

are high level skills used effectively?

‘move on up’ – to create openings for others

Role of mobility

• right person, right skills, right place, right time implies occupational, industrial and geographical flexibility and mobility

• ‘jobs to people’ and/or ‘people to jobs’?• MIGRATION and COMMUTING

- brain drain (training for export?)- brain strain- skills circulation

• competing for skills – context of tighter labour market, ageing population, lower fertility, international migration

• What is the capacity for mobility in the labour market?• What are the constraints on mobility?

Understanding migration in the UK

• The Greater South East is the motor of the UK economy and the driver of the UK migration system

• An “escalator region”: it offers the largest quantity and greatest range of employment opportunities (particularly higher level occupations) in the UK

• London attracts young people at the start of their careers from the rest of the UK and loses population to all other regions except in the 20-29 age group

• It attracts full-time workers

• It attracts international migrants – from all parts of the world (‘global reach’)

Migration of 20-29 year olds, 2000-2001(source: 2001 Census)

-10

-5

0

5

10

15

20

25

30

35

NE NW YH EM WM E SE L SW Sc Wa NI

% o

f p

op

ula

tio

n,

2000

in-migration rate

out-migration rate

net migration rate

international migrants

International migration:towards a ‘managed migration’ policy

Role of migration in addressing labour market deficiencies

• migrants over-represented at both ends of the skills hierarchy:- highly skilled - less skilled

• refugees and asylum seekers

• skills utilisation – evidence for occupational downgrading

• labour market integration

Factors associated with employment rates of migrants:

• gender & family status

• ethnicity

• qualifications

• area of residence

• year of arrival /nationality

• language

• discrimination

Competing for people and skills:the example of Fresh Talent (Scotland)

Countering population loss through:

• retaining home-grown talent

• encouraging Scots who have moved away to return

• attracting new people to Scotland

Policies:• closer working with Work

Permits UK• visa extensions for

students staying after graduation

• support to universities in recruitment

• improving visitor impressions

• establishment of relocation advice service

Fresh Talent (Scotland):questions and issues

• Welcoming all comers?

• Do migrants go where you want them to go?:- the success and attractiveness of Edinburgh- is it desirable/possible to create other magnets?

• Importance of non-economic (environment, leisure, schools, etc) as well as economic factors

• Limits to the role of interventions at Scotland level:- UK level policy (e.g. Home Office on immigration)- Scotland tied into UK migration system

Commuting

• trend to longer flows, but most commutes are short distance

• local areas play different roles - characterised by:- high in-commuting- high out-commuting- ‘transit camps’: high in- and out-commuting

• complexity of commuting flows in some areas

• sub-group differences

Constrained mobilitySpatial barriers to employment

physical: accessibility especially in 24/7 economy

social – information flows, social divisions, perceptions

• ‘bounded rationality’ –unwillingness to venture into terra incognita (mental maps)

• labour market opportunities my be restricted because jobs in accessible yet unfamiliar locations are not considered

Permeability of spatial labour markets

• job growth does not necessarily ‘trickle down’ to local residents – even if local residents have the required skills higher-skilled workers can bump down’ in the labour market and compete for lower-skilled jobs: processes of mobility and job competition leave behind the weakest

Example of workforce mobilityin construction

(from IFF with University of Warwick)

4%

30% from outside UK

5%

Base: 993 workers on sites in London 30% from outside the UK

26%14%

7%

5%

1%

3%2%

3%

1%

Workers in London – where from originally

57%

Base: 993 workers on sites in London

4%4%

2%

2%2% 10%

14%2%

2%

2%

Workers in London: where permanently resident

1%

1%

0% from outside UK

1%

Base: 378 workers on sites in NE

1%1%

1%

91%

2%

1%

1%

Workers in NE – where from originally

% of workers on sites in region with permanent residence in same region

98%

100%

57%

68%

73%

75%

81%

87%

88%

95%

90%

89%

0% 20% 40% 60% 80% 100%

London

East

South East

East Mids

North West

South West

Y & H

West Mids

Wales

North East

Scotland

N. Ireland

Construction workers living in temporary accommodation

• 8% of construction workers live in temporary accommodation – but ranges from:

• 19% in London – of whom 67% have permanent address elsewhere in England, 10% in Scotland, 7% in Wales, 16% outside UK (4% Irish Republic)

• 9%-10% in NW, SW and N Ireland

• < 4% in NE and YH

Reasons given:• No / little work in home

area (27% nationwide, more often cited by workers on sites in London)

• Sent by company (27% nationwide)

• Better pay (21% nationwide, more often cited by workers on sites in London)

• Better job opportunities (11% nationwide, more often cited by workers in London)

ImplicationsCreating a ‘healthy labour market’

vision of the desired result

processes that might bring about that result

how processes may be influenced by intervention – scope and limitations of regional-level intervention

importance of advancement in work

capacity for mobility

Possible policy interventions

public procurement cluster policy role of public sector

Inter- and intra-regional disparities

• use of ratio measures and floor targets - for geographical / sub-group differences and setting minimum standards