In this week's labour market update, Charlie Ball covers reports looking at the UK's skill shortages and the skills that will be needed in a net zero economy
Student Services at Jisc have released our Early Careers Survey 2022, examining the career plans and experiences of 5,255 Prospects users over the previous 12 months.
- 55% of respondents said taking care of their mental health was their biggest challenge of the last year.
- Sixth form/college students (64%) and university students (63%) also struggled to stay motivated in their studies and job search.
- School students were particularly reliant on their families for careers advice (65%) but a significant proportion of university students also turned to their families too (40%).
- 79% of student respondents managed to complete some form of work experience in 2021.
- 40% of 2021 graduates said they planned to leave their current employer this year.
- Higher education students were more open to a mix of online/on campus teaching than further education learners.
- One in ten respondents indicated that they didn't do an apprenticeship because their parents were against it.
The latest rapid indicators of economic and social change are now available from the Office for National Statistics (ONS):
- The number of online job adverts fell by 2% in the week to 29 July 2022, and was 123% of its February 2020 pre-coronavirus level. Total online job adverts were 91% of the level in the equivalent day of 2021.
- Of the 28 job categories, 19 decreased in the latest week, with the greatest fall in marketing, advertising and PR (10%). The categories with the largest weekly increase were construction and trade (9%) and travel and tourism (8%).
- The regions with the highest number of online job adverts relative to their February 2020 average are the North East and Northern Ireland at 152% and 145%, respectively.
- Scotland has the third highest number of adverts relative to its February 2020 average, at 138%. In the latest week, however, Scotland was the only region in which online job adverts were higher compared with the previous year, at 102% of the equivalent day of 2021. The regions where they were lowest relative to the previous year were the East Midlands (78%) and the East of England (80%).
- Company incorporations were broadly unchanged from the previous week in the week to 29 July 2022, while over the same period, voluntary dissolution applications increased by 19% following three consecutive weeks of decreases. Compared with the equivalent week of 2019, incorporations and voluntary dissolution applications were 12% and 10% higher, respectively.
- Small business sales recorded by Xero were broadly unchanged in June 2022 compared with May 2022 and were 127% of the level seen in June 2019. Small business jobs fell by 3% in June 2022 when compared with the previous month and were 97% of the level seen in June 2019.
- Potential redundancies in the week to 15 May 2022 were 55% of their pre-coronavirus (COVID-19) level, while the number of employers proposing redundancies are now 72% of their pre-coronavirus levels.
Any attempts to boost demand as a means to speed up recovery while there are labour shortages that cannot be filled will likely impact the economy negatively in the medium term.
The ONS have also released results from their fortnightly business survey:
- Of businesses not permanently stopped trading, 26% reported input price inflation as their main concern for August 2022, and 20% reported energy prices. The percentage of businesses reporting no concerns was down from 24% for July 2022 to 21% for August 2022.
- Of businesses not permanently stopped trading, 12% reported that their employees hourly wages had increased in June 2022 compared with May 2022. This percentage was highest in the human health and social work activities industry, at 24%.
- Of businesses not permanently stopped trading with 10 or more employees, 35% reported that they were experiencing a shortage of workers in mid-July 2022, broadly stable with early June 2022 (36%). For businesses with fewer than 10 employees, these percentages were lower at 13% and 12%, respectively.
The Recruitment & Employment Confederation (REC) have released their most recent Jobs Outlook:
- In April to June 2022, employer confidence in making hiring and investment decisions for their own business hit net: -13. This is the same level as April to June 2020, at the height of the pandemic. Meanwhile, business confidence in the economy fell by 40 percentage points from January-March 2022 to net: -50.
- Despite this, labour shortages mean that many firms are still trying to hire new staff. The hiring outlook stayed positive, although it slowed slightly from the first quarter of this year. In the short term, hiring intentions for permanent staff decreased by 5 percentage points to net: +23, while demand for temporary workers fell by 4 points to net: +12.
- In the medium term (the next four to 12 months), hiring intentions for permanent staff and temporary agency workers both declined by two percentage points from the previous quarter, to net: +25 and net: +13, respectively.
REC have also published a report with CBI Economics on the impact of skills shortages:
- Modelling analysis demonstrates that any attempts to boost demand as a means to speed up recovery while there are labour shortages that cannot be filled will likely impact the economy negatively in the medium term. For example, a temporary and hypothetical 10% increase in demand in the economy would need to be accommodated by 1.7 million new jobs. Without this employment increase, real UK GDP would fall by between £30billion and £39billion every year from 2024 through to the end of 2027, equivalent to 1.2% to 1.6% of GDP, or the size of the UK recruitment sector in 2019.
- Modelling also shows that a demand boost in the face of shortages leads to higher earnings and inflation, and an overall fall in real disposable income, which in turn means restricted growth in public sector receipts.
- International benchmarking analysis highlights that, in Canada, businesses are proactively working with educational institutes as well as investing heavily in technology and automation to alleviate the impacts. The Canadian government meanwhile has identified the key sectors afflicted by skills shortages, and is actively seeking to attract migrants to these areas, as well as committing to these sectors funding for training and apprenticeships.
- In Germany, there has been extensive collaboration across a large number of public sector agencies in implementing labour market policies to alleviate the most pressing issues: boosting the low participation rate (the number of people working or actively seeking work), and shortages in skilled and vocational workers.
The Skills and Productivity Board commissioned RAND Europe and the Institute for Employment Research (IER) to undertake research looking into changing skills needs within a select group of occupations in four priority areas:
- science and technology
- skilled trades
The skills that are already in demand are those likely to be (even more) needed in future, namely:
- ability to adapt to new technologies (including the specific technical skills unique to each sector and occupation).
- basic skills (such as numeracy, literacy, digital literacy, interpersonal skills) that are needed as a foundation for any new or more specialised and advanced skills.
Another skill rooted both in the present and future is the ability to work in a team, make connections and collaborate with others. There will be a growing emphasis on flexibility and more inter-disciplinary and collaborative approaches to work in all four priority areas.
Among the key changes that can be expected in the future across most roles are data handling, and knowledge on data storage and data security. Major changes are likely to affect the number of roles and skills required: from climate change and 'greening' of the occupations through to technological developments, the future of workplaces and working patterns. Perhaps most clearly, the evidence points to the shifting culture on equality, diversity, and inclusion with the need to move from awareness-raising to action.
80% of young people surveyed stated that it was either very or quite important that they work for an organisation that is committed to tackling climate change.
Indeed have updated their figures and, as always, are well worth a look. Many employers continue to face staffing gaps amid a tight labour market. But it's not a case of 'stale' vacancies; the inflow of new job postings remains high.
Vacancies remained high at just under 1.3 million in the three months to June. With unemployment remaining low at 3.8%, there continues to be less than one unemployed jobseeker per vacancy.
Broadly speaking, Indeed observe five groups in terms of recent job posting trends:
- pandemic winners still growing or stable, including retail, loading & stocking and therapy.
- pandemic winners experiencing a correction or normalisation, including several healthcare categories, food service, cleaning, manufacturing and tech.
- stable active hirers, including care, driving and finance.
- pandemic laggards still catching up as hiring remains challenging, including nursing, legal and childcare.
- beauty & wellness is in its own category, having done poorly during the pandemic and now slumping again
The software development category (which includes titles such as software engineer, developer and product manager) peaked in February at 48% above the pre-pandemic baseline, but has now slipped to 24%. IT operations & helpdesk (which includes IT support, network engineers and data administrators) and information design & documentation (which includes business analysts, IT security specialists and user experience designers) have also cooled.
Employment regains some lost ground and inactivity falls, but real wages are compressed further. Redundancy notifications remain low, suggesting no plans for widespread layoffs.
The Learning and Work Institute (LWI) discuss the skills needed for a net zero economy:
- 80% of young people surveyed stated that it was either very or quite important that they work for an organisation that is committed to tackling climate change. But 63% told the LWI that they had never heard of green skills and didn't know what they were.
- The most common barriers preventing young people from pursuing a green career were cited as a low understanding of what green jobs are available (44%), a low understanding of the green skills that employers require (41%) and a low understanding of how to acquire green skills (40%).
- 59% of employers currently require green skills or expect to in the future, only 40% of employers surveyed agree that the education system is equipping young people with the necessary green skills.
- 59% of employers that currently or expect to require green skills feel there are green skills gaps within their organisation. These gaps are negatively impacting their ability to meet net zero targets (29%) and manage rising energy costs (26%).
And outcomes data for Italian graduates from 2021 is now available, mainly in Italian, but with a tool you can use to examine institution-level data in English as well.
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