Graduate labour market update: decline of workplace training

In his latest graduate labour market update, Charlie Ball takes a look at two reports on workplace and work-related training and the latest data on job vacancies

Monthly real gross domestic product (GDP) is estimated to have shown no growth in February 2023, where falls in services and production were offset by growth in construction.

The total number of online job adverts grew by 1% on 6 April 2023 compared with the previous week. The number of online job adverts increased in five of the 12 UK countries and English regions, was unchanged in six and decreased in one when compared with the previous week. The increases were seen in the East Midlands, London, Northern Ireland, North East and South West, each of which grew by 1%. The data strongly suggests little recent change in the labour market.

28% of businesses reported a shortage of workers in the fortnight to 2 April. This rose to 44% of health and social care employers. 31% of education employers and 28% of manufacturing employers also reported shortages. Half of businesses reporting shortages reported that their existing employees are working extra hours to keep up with demand.

The Recruitment & Employment Confederation's (REC) latest Report on Jobs shows only modest movement in the UK labour market over the last month:

• Recruiters recorded a marginal fall in permanent staff placements across the UK, while temp billings growth quickened.
• Candidate availability rose for the first time in just over two years, driven by a combination of relatively improved confidence among a number of jobseekers, but also redundancies in some areas. The rising cost of living and efforts to attract and secure suitable staff drove further marked increases in starting pay. Total vacancies continued on an upward trend, though growth edged down from February's four-month high.
• Increases in demand for staff were registered across both the private and public sectors. The steepest increase in vacancies was seen for permanent workers in the private sector, where growth eased only fractionally from February. The softest expansion in demand was meanwhile signalled for temporary workers in the private sector.

The Resolution Foundation have released their Q1 Labour Market Outlook. They have focused on the decline in workplace training:

• Under-employment rose significantly during COVID, likely due to employers making hours reductions in the face of weak demand and supply constraints, but has since fallen very rapidly to its lowest level on record as the labour market has tightened.
• The proportion of workers voluntarily moving job (a good indicator of worker confidence) fell by 3% on the year but still remains above pre-pandemic levels.
• There has been an overall year-on-year decline in the amount of training happening since 2001, and low-paid workers are consistently less likely than higher earners to get training. However, low-paid workers' training levels have stayed relatively constant while training among higher earners has declined significantly. In 2003, the highest paid were 2.4 times as likely to receive training as the lowest paid. This had fallen to 1.9 times by 2019, and 1.6 times by 2022. Similarly, over the same period workers with a degree went from being 2.0 times as likely to receive training than those without a degree to 1.7 times as likely.

In a similar vein, a very impressive list of authors at the London School of Economics (LSE) have written this piece on training:

• The OECD reports that 38% of working-age adults in England are qualified to tertiary level (above the OECD average of 34%), and 25% have below upper secondary level qualifications (slightly higher than the OECD average of 24%). England stands out for having relatively few adults with middle-level qualifications. This gap is related to the lack of funding for advanced vocational qualifications, leaving UK adults a quarter as likely as adults from the US to have undertaken an advanced vocational qualification.
• The UK has seen changes in the labour market over recent decades, in common with many advanced economies. Manufacturing has declined, but the use of information technology and offshoring have led to a change in workplace skills. Social and abstract skills have increased in demand, as the employment shares of occupations that are intensive in routine and manual skills have fallen. For example, occupations that use social skills intensively (such as directorial positions in marketing and sales, human resources, and customer services) have become a larger part of the set of jobs done in the UK, whereas those that have little need for social skills have declined in importance. Alongside these changes, wages have grown particularly strongly for jobs that require a significant amount of abstract reasoning: occupations that use abstract skills intensively have seen average wage growth of 30% since 1994, compared with wage growth of below 15% for occupations that involve below-median levels of abstract skills.
• In general, these shifts are relatively good news for workers with high levels of education and those in high-paying occupations, as they are most likely to utilise social and abstract skills while in the workplace.
• The proportion of workers who report that they have received work-related training in the past three months has fallen from 29% in 2002 to 24% in 2020, and has fallen the most for workers aged under 25. The number of days training received per employee or per trainee is lower than a decade ago, as are the proportion of employers who report they are providing training, and the amount of money spent on training by employers. Only 13% of the unemployed received training. This is a particular issue as training is a crucial way for individuals to improve their labour market position and appears to be especially effective for those with lower levels of formal education.

IDA Ireland have published their April Labour Market Pulse. This has a focus on AI:

• The hiring rate slowed through the end of 2022, ending 27% lower in December 2022 than the previous year. This trend continued in early 2023, with rates sitting 27.2% lower in January and 34.7% lower in February year-on-year.
• The labour market stabilised in 2022 following rapid hiring during the reopening of the economy post-pandemic. Employees seem to be prioritising stability and job tenures have increased.
• IDA Ireland, Enterprise Ireland, and the Local Enterprise Offices all reported strong jobs growth in 2022. Unemployment stood at 4.4% in December and GDP grew 12.2% annually
• Demand for AI skills continues to outstrip supply. Skills availability has been identified as the most important obstacle to the adoption of AI for firms both in Ireland and across the EU.
• Machine Learning, AI Applications, and Data Processing & Management were identified as key technical AI skills needs by the DETE.
• Irish companies are responding to the AI skills shortage by focusing on upskilling and reskilling of employees and there has been strong growth in AI work permit applications.

Written by

Charlie Ball

Head of labour market intelligence

Jisc