The restrictive measures that came into force in March to stem the tide of virus transmission have thrown the UK labour market into a rapidly induced period of turmoil. And with ongoing uncertainty as to how long these measures will remain, there are of course many unknowns as to what the medium to long-term impacts are likely to be on an economy that has in many places been deliberately put into hibernation or largely shut down of its own accord.
During this challenging time, we at Emsi are seeking to provide clarity through interrogating the wealth of labour market intelligence we have at our disposal, in order to inspire our customer communities to work through their own specific challenges. We recently provided a summary of job posting activity that showed us that whilst hiring activity has fallen significantly in general terms, there have actually been some occupations showing some short-term growth in hiring demand. We also produced a series looking at the potential impact of the shutdown of the restaurant and pub industries — arguably one of the sectors most directly affected by social distancing rules, highlighting the key job roles that are being directly impacted.
Whilst both analyses paint a largely challenging picture for the UK workforce, there are some small crumbs of comfort to be found if we dig a little deeper — especially if we consider how one industry’s challenge could be another industry’s solution through redirecting labour market activity.
On one hand, our analysis of the restaurant and pub industries flagged up that the top occupation employed before the crisis was Kitchen and catering assistants, representing some 320,000 jobs. Unsurprisingly, this role has seen a significant drop in job posting activity in the last month, with a decline of over 30%. Although we are awaiting the upcoming unemployment claimant count data to truly understand the impact on this workforce, I think it’s safe to assume this could become a high unemployment or furloughed occupation. But on the other hand, we have observed that amongst current in-demand roles are Food, drinks and tobacco process operatives with over 1,100 unique postings in the last 30 days, up 10% on the previous 30. Not only is this driven by the need to ensure that critical food production activities continue to feed the nation, but this role would typically have relied on a migrant workforce that is now unavailable to fulfil such work, and which therefore needs to be replaced from a locally-based workforce (although reports in the last few days have suggested that some Romanian fruit pickers are being flown in to do some of the work).
So, is there a chance to repurpose available labour from the job where demand has fallen to the job where demand is rising in the short term? To answer this, we need to consider two key dimensions:
- The skills transferability (and gaps) between the two roles.
- Whether the demand for labour is found in the same localities as the newly available labour, given restrictions on people’s travel.
We can turn to a number of different data strands to explore these key dimensions.
The skills transferability dimension
One headline approach to testing the skills compatibility and proximity between two occupations is to harness a dataset called O*NET. This is a project funded by the US Department for Labor that quantifies (and updates) knowledge, skills and abilities at an occupational level. At Emsi we have translated this from US occupations to equivalent 4-digit Standard Occupation Classification (SOC) codes to connect to our UK data.
What is particularly interesting is that a headline comparison using this data suggests a 93% compatibility when considering a transition from Kitchen and catering assistants to Food, drinks and tobacco process operatives. The table below sets out the top 10 knowledge requirements based on their importance to the Food, drinks and tobacco process operatives occupation, flagging where the knowledge required for Kitchen and catering assistants typically does not meet the same threshold — basically a potential skills gap that might need to be filled through specific training or induction activity:
Whilst the headline compatibility is promising, we can dig a little deeper to understand skills transferability and gaps at a more granular level, by observing the skills employers have been demanding in recent job postings. Harnessing our open skills library (Emsi Skills), which is connected into our Job Posting Analytics data, we can see the top in-demand skills from employers hiring Food, drinks and tobacco process operatives throughout the month of March. The chart below shows the Top 25, with the light red columns indicating those skills that are also in the Top 25 skills employers require when hiring Kitchen and catering assistants:
Whilst it’s not entirely a given that the key in-demand skills which are not found across both roles represent a true skills gap (employers often assume certain “obvious” skills are held by candidates and don’t necessarily advertise them in postings), such specificity should help employers and skills providers target short-term training and competency interventions to the areas that could have the greatest and quickest impact in transitioning workers.
What’s more, this could prove a fruitful shift to make for workers, as Food, drinks and tobacco process operatives typically earn more than kitchen and catering assistants, as the graph below shows:
The location dimension
Whilst analysing skills transferability can help identify potentially available pools of labour to meet short-term demand and assess potential skills gaps that need plugging, the specific challenges of the current crisis is one that has put strict geographic limitations on the flow of labour, both through restrictions on commuting and in moving house to seek employment. As such, it is critical to also understand whether the available labour pool (Kitchen and catering assistants) can be found in the same localities as employer demand (Food, drinks and tobacco process operatives).
Based on the geographic profile of job postings in the last 30 days, the table below picks out the top counties and unitary authorities in terms of demand for labour, whilst also showing the size of the potential available labour pool.
Clearly, the size of the Kitchen and catering assistant potential labour pool vastly outweighs local demand for Food, drinks and tobacco process operatives in these higher demand areas, suggesting that such a transition could be largely viable.
Although based on this specific example, sadly the scale of demand in the short term is a long way from solving all of the challenges faced by a significantly sized displaced Kitchen and catering assistants workforce. But hope is far from lost. Based on O*NET analysis, 47 other occupations sit within 90% skills compatibility, and there were over 112,000 unique job postings in the last 30 days for these jobs, with Van drivers, Cleaners and domestics, Security guards and related occupations, Routine inspectors and testers, and Cleaning and housekeeping managers and supervisors accounting for over two thirds of that total.
Labour markets work in very flexible ways, but in “normal times” transitions often happen over long time periods. The rapidity of the Covid-19 impact shines a brighter light on the issues of labour market flexibility, provides us with the opportunity to focus thinking and activities on supporting specific cohorts of the labour market, and reinforces the need for a skills infrastructure and learning culture that works flexibly with a rapidly changing labour market and economy. A situation that is far from uniquely a Covid-19 challenge for the UK!
Make sure you keep up-to-date with what is happening in the labour market at this time by checking out our Employment Data Dashboard and requesting a free labour market report for your area.