The news that BAE Systems is to stop shipbuilding in Portsmouth in 2014 and scale down operations in Scotland with a combined loss of 1,775 jobs was perhaps not wholly surprising. The company had been conducting a maritime defence review for over a year-and-a-half off the back of defence cuts announced by the government in the Strategic Defence and Security Review 2010 and as long ago as November last year, the UK chief executive of BAE, Nigel Whitehead, had warned that the company was expecting “a reduction in footprint”, and hinted that manufacturing could well cease at one of its sites.
Yet the fact that this news had been hanging in the air for months beforehand won’t have made the bitter pill any easier to swallow for those who are set to lose their jobs. They have mouths to feed and may well wonder what the future holds.
There is some possibility that some of the jobs may yet be saved. BAE Systems have a contract to build the Type 26 Global Combat Ship, but as yet there is no confirmation regarding which shipyard these will be built in. Another potential lifeline, at least for those affected in Portsmouth, is the vote on Scottish independence to be held next year. If Scotland votes yes, this would mean that, as the leader of Portsmouth council, Gerald Vernon-Jackson pointed out, “what would remain of the UK would have no ability to build advanced warships.” It is possible in such a scenario that steps might be taken to restart shipbuilding in Portsmouth, although as Mr Vernon-Jackson also commented, “we’d have to spend a huge amount of public money re-employing people, re-skilling people here in Portsmouth”.
But assuming that the majority of these job losses do take place, what next? Whenever there is a major loss of jobs, especially in industries like shipbuilding, which tends to be a long-term “job for life”, it is very easy for a sense of despair to set in, not just for those losing their jobs, but for the area as a whole. If shipbuilding is all you have ever known, what do you do? And what can education and training institutions do to help?
Before answering these questions, let’s just take a look at the general trends of employment specifically in shipbuilding in Portsmouth. The following graph shows the situation from 2003 to the last data set available, which was 2012:
As you can see, in the years immediately following 2003 there was a steep growth of more than 40% in the numbers of people employed in shipbuilding in Portsmouth, but this was followed by an even steeper decline from 2007-2008. Although this fall was bucked slightly in 2008, the trend from 2007 onwards has been in a downward direction. In terms of absolute numbers, in 2003 there were 1,771 people employed directly in shipbuilding in Portsmouth (many more employed in the supply chain), falling to 1,241 in 2012 — a drop of 530 or almost 30%. So what we can say is that even without the recent announcement, shipbuilding in Portsmouth has declined over the past decade.
Another aspect that is worth noting is the concentration of jobs in the Portsmouth area compared to other areas. It comes as no surprise that Portsmouth has a higher concentration of people employed in this industry than in other parts of the country, but our Labour Market Information shows that in 2012 the concentration of shipbuilding jobs in Portsmouth was nearly 15 times higher than the national average, with shipbuilding accounting for 1.2% of all jobs in Portsmouth. All of which means that — to perhaps state the obvious — BAE’s decision to cease shipbuilding in Portsmouth is set to have a major effect on the local economy.
But if Portsmouth is about to see almost 1,000 people currently employed in this industry suddenly finding themselves out of work, what hope for the future? One way of looking at this is to find out which occupations are set to go, and then to find out if there are any other industries in the area which employ people in these same occupations. The following chart identifies the ten key occupations within the Portsmouth shipbuilding industry:
|Occupation||Employed in Industry (2012)||% of the Total Jobs in Industry (2012)|
|Metal plate workers, shipwrights, riveters||93||7.5%|
|Production, works and maintenance managers||76||6.1%|
|Metal working production and maintenance fitters||58||4.7%|
|Design and development engineers||54||4.4%|
|Carpenters and joiners||51||4.1%|
|Electricians, electrical fitters||49||4.0%|
These ten occupations together account for 50% of jobs within Portsmouth shipbuilding. Assuming that these displaced workers do not move out of the area, in order that they do not end up in long-term unemployment the best solution would be either to find other industries that employ the same occupations locally, or to find other local occupation openings that require similar skillsets. The following table shows the local openings for these same ten shipbuilding occupations within other industries throughout Portsmouth:
|Occupation||Employed in Industry (2012)||Employed in Industry (2016)||Change (2012 - 2016)||% Change|
|Source: EMSI Covered Employment - 2013.1|
|Production, works and maintenance managers||1624||1787||163||10.04%|
|Design and development engineers||544||611||67||12.32%|
|Metal plate workers, shipwrights, riveters||40||48||8||20%|
|Metal working production and maintenance fitters||582||634||52||8.93%|
|Electricians, electrical fitters||879||946||67||7.62%|
|Carpenters and joiners||206||214||8||3.88%|
From this table — especially the predicted trends up to 2016 — it can be seen that there may well be opportunities for at least some of the displaced shipyard workers to find employment in other industries. However, from these figures it is also clear that the local economy will not be able to absorb all those made redundant. So the next solution, short of an exodus of workers from this area or people retraining in something else from scratch, is to use the transferrable knowledge and skills that the redundant workers already have, and then find other occupations which have a similar knowledge and skillset and to upskill where necessary.
The O*NET occupation classification system is a US-based system which EMSI have adapted for Britain, which helps us see how this can be done. O*NET basically matches the knowledge and skills in one occupation with knowledge and skills in other occupations, showing which alternative occupations best match a person’s existing knowledge and skill set.
So let’s take one of the occupations mentioned in the table above: pipe fitters. Take a pipe fitter who has been working in the shipbuilding industry for 20 years and is now set to lose their job following BAE’s decision. Their first option would perhaps be to find work as a pipe fitter in another industry within Portsmouth. But supposing they are unable to find employment – which is highly likely when seeing that the numbers likely to be unemployed from shipbuilding outweighs annual openings for the occupation across all other industries. Does that mean they have to start all over from scratch and retrain as something completely different? Not necessarily. The following table shows which other occupations within the Portsmouth area most closely fit with the transferrable knowledge and skills set that the pipe fitter already has:
|O*NET Occupation||Median Hourly Earnings||2012 Jobs||2011-2016 Change||2011-2016 Estimated Annual Openings||Compat. Index|
|* Top Compatible Occupations - Settings|
|Heating and air conditioning mechanics and installers (5314.02)||£14.83||215||19||10||95|
|Scaffolders, stagers, riggers (8141.00)||£11.91||91||15||6||94|
|Vehicle body builders and repairers (5232.00)||£10.22||79||1||3||93|
This tells us which other occupations pipe fitting is most similar to, in terms of transferrable knowledge and skills, with Heating and Air Conditioning Mechanics and Installers being the closest match. Yet this is not all. We can go further by delving a little deeper to find out exactly which areas of knowledge and skills a pipe fitter would need in order to perform one of these other occupations.
So taking the closest occupation according to O*NET — Heating and Air Conditioning Mechanics and Installers — the following chart shows just which areas a pipe fitter would need to upskill and retrain in order to perform this job:
In this case, the two biggest areas differentiating pipe fitters from heating and air conditioning mechanics and installers are in the areas of physics, and customer and personal service. No doubt additional technical skills will also have to be factored in as well.
This is where colleges especially can play a big part. If Portsmouth is about to see a mass redundancy of those employed in shipbuilding, as seems likely, colleges in the area have both a responsibility and an opportunity to take a lead on helping the redundant workforce to upskill and retrain, so that they are able to get back into work and back into productivity as soon as possible. Colleges in Portsmouth, and indeed the surrounding region, with access to good Labour Market Intelligence, can play an essential part in helping both the workers affected by this announcement, and the area as a whole, get back on the road to recovery — sooner rather than later.
Data for this post comes from Analyst, our web-based labour market data tool. For more information about EMSI data, please contact Andy Durman (email@example.com). You can also find us on Twitter and Facebook.