It’s no secret that Britain has a productivity problem. As the chart below shows, productivity (output per worker) was on a largely upward trajectory from the 1960s, until it fell quite sharply during the recession of 2008. Since then, the trajectory has once again been upwards, yet the rise has been much more gradual than it was before 2008:
The problem can be seen even more clearly if we compare the UK with other developed nations. As the following chart shows, in 2016 UK productivity was almost 18% below the G7 average:
There are many different factors causing this productivity puzzle, but perhaps number one is the issue of skills, and especially ensuring that the skills that are most needed by employers are being supplied. As the Education Secretary, Damian Hinds, stated in a major speech in December 2018:
“Clearly, there is more than one factor associated with low productivity…but today I want to focus on a critical one that I believe underpins everything else…Skills.”
He went on to talk about a systemic failure to match skills with labour market need, and spelled out the need for a plan to better ensure supply matches demand. At the heart of this plan are LEPs and Combined Authorities, and in particular the role of Skills Advisory Panels in setting out what skills are needed in their local area. But how can this be achieved?
Building your skills strategy on solid evidence
The key to developing an effective strategy for tackling skills shortages lies in basing it on robust evidence. This means not only being able to identify the occupation and skills needs that employers in your region have, but doing so at the most granular levels for the smaller local economies within the region.
For instance, the chart below uses our data to show projected demand for STEM occupation clusters over the next few years within the Greater Manchester Combined Authority (GMCA) as a whole, as well as three of the Local Authority areas within the region – Manchester, Rochdale and Wigan:
As you can see, there is a lot of variation between these areas. For example, whereas the demand for Engineers across the GMCA region as a whole is projected to grow by 3.6%, in Manchester it is double this at 7.2%, whereas in Rochdale it is set to fall slightly by 0.4%. What this shows very clearly is not only the need to dig deep into the specifics, but also the great value in data that allows you to do this.
Identifying industry demand
Along with identifying occupation growth, data can also be used to identify the occupational make up and demand within particular sectors. This is especially useful in terms of better understanding employer demand within industries that you have marked out as a priority to focus on. For instance, in the chart below, we have shown the Top 10 occupations within the Digital industry cluster in GMCA, and have identified a number of metrics about these occupations that are of interest:
As we saw in the Nuts and Bolts of LMI section, looking at the occupational mix of an industry reveals that it is not only occupations that we might directly associate with the sector that are employed in it. The Digital industry cluster, for example, not only employs “digital” occupations, but also sales teams, marketing teams, human resources teams and accountants, to name but a few. Identifying what these occupations are is a vital piece of the skills puzzle.
Identifying skills demand
In addition to looking at occupations and industries, by using Job Postings Analytics, we can also identify really specific skills needs that an area has. For instance, the chart below shows the Top 10 hard skills for STEM occupations requested by employers in Hackney between November 2017 and October 2018. The percentages next to each skill represent the percentage of unique postings these skills appeared in:
Comparing skills supply to demand
One of the issues that Skills Advisory Panels (SAPs) are tasked with is identifying how well skills supply in their region aligns to skills demand, with particular emphasis on ascertaining whether education providers are delivering the courses needed to meet employer demand. The examples we have given above are all concerned with demand, but as well as allowing users to identify this, our data also allows a comparison to be made with skills supply.
For example, completions data from local Higher and Further Education providers can be loaded into Analyst, and a comparison of this skills supply against against employer demand can be made. SAPs can therefore use the data to identify areas of over and under supply of local skills provision, and this can be used to partner with education providers in the area to target provision, work to plug skills gaps, and monitor change.
How South East LEP are using the data in their skills strategy and Skills Advisory Panels
The examples given above are just a snapshot of the vast array of insight available to form an evidence-base for a skills strategy. The really exciting thing, however, is seeing this sort of data and analysis in action.
One example of this is South East Local Enterprise Partnership (SE LEP), the biggest LEP in the country, covering a population of 4.2 million across 32 Local Authorities. They invested in Analyst after their Skills Lead, Louise Aitken, recognised its potential to help in the development of an evidence-based approach to skills planning, particularly given its ability to identify skills trends and future projections at both the LEP level and at the level of the 32 Local Authorities.
The LEP has used the data to provide a solid evidence base for their 2018-2023 Skills Strategy, such as the number of jobs in the area; average earnings, and the number of job vacancies being advertised. More specifically, they have also used it to shed light on priority sectors within the LEP area – including Health & Care; IT, Digital & Creative; and Transport & Logistics – with the identification of a number of key metrics associated with skills demand for these industries and the key occupations they employ.
Analyst data has also been used to produce a series of skills reports, which are available on the SE LEP website, and which include:
Sector Overview Reports – A series of reports focused on different industries in the region, featuring a general overview of the industry, regional employment trends, the occupations they employ, and a breakdown of the age and gender of the sector’s workforce.
District Economy Overview Reports – A series of reports looking at all 32 Local Authority areas, giving details of its population, industry and occupation mix, average wages, regional imports and exports, and the area’s growing and declining industries and occupations.
SE LEP is now using Emsi data as part of their Skills Advisory Panel, to identify and develop a supporting robust analytical toolkit within their area. As Louise says, Analyst has quickly become an essential part of the organisation’s planning:
“Discovering the sheer breadth and depth of the data in Analyst has been fantastic. Not only did we get massive value from it with the Skills Strategy, but we’re continuing to find new and exciting ways of using it in a number of other key areas. It really has become a critical part of enabling us to fulfil our vision of bringing prosperity to our region.”
Get in touch to find out how we can help you build a solid evidence-base for your skills and industrial strategy.