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Improving Skills for Employment

There is an inarguable connection between skills and employment opportunities, both for the individual and for the wider workforce. Enhancing skills significantly improves the ability of the unemployed to find work. At the same time enhancing skills helps those in lower paid jobs to progress within the labour market. As the skills base of the local workforce increases, the area becomes more attractive to prospective investors looking to bring in new business[i].

A fast pace of change in the national and world economy coupled with rapidly evolving technology means that the modern workforce needs to be more skilled than ever before. These skills need to be flexible, adaptable and portable between jobs and even between employment sectors. The continuing move away from a production to a service based economy also means the workforce is increasingly having to develop its social skills, as employment becomes much more customer focussed.

Compared to the Welsh averages, the working age population in both Conwy County Borough and Denbighshire is better qualified. We have fewer people with no/very low levels of qualification, and more people qualified at degree level or above (NVQ4+). Women are generally more qualified than men.

Table: Highest qualification levels held by working age population 2015
Source: Annual Population Survey, ONS

Conwy CB Denbigh-shire Wales UK
No qualifications 6.7 7.7 9.5 7.9
Below level 2 13.1 13.3 13.4 13.6
NQF level 2 20.2 20.2 19.6 18.8
NQF level 3 21.6 20.5 21.4 20.2
NQF levels 4-6 28.9 30.2 27.4 –
NQF levels 7-8 9.6 8.2 8.6 –
NQF level 4 or above 38.4 38.3 36.1 39.5

Definitions
Examples of highest qualifications at each level include:
Below level 2: NVQ level 1, Entry Level qualifications, Basic Skills
Level 2: NVQ level 2 or equivalent, 5 or more GCSE A*-C, 2 AS levels
Level 3: 2 A level passes, 4 AS level passes, NVQ level 3, Advanced Welsh Baccalaureate
Levels 4-6: First degrees, Foundation degrees, NVQ level 4
Levels 7-8: Postgraduate qualifications, NVQ level 5.

Included within the suite of skills for employment are a whole range of academic and work related qualifications. The route to higher education and a university degree are not suitable for all school leavers or adult learners, and apprenticeships and other work based learning opportunities form a large part of the local skills base. As well as educated graduates a resilient mixed economy will require skilled technicians, administrators, retail operatives and so on. On-the-job learning, apprenticeship schemes and formal higher education all have significant roles to play in providing skills within the employment market.

Compared to the national rate, Conwy County Borough and Denbighshire are both better provided for apprenticeships than the national averages, particularly in the 16-24 age group. Overall rates for work-based learning are comparable to the Wales average.

  • Both areas have high proportions of programmes within the health and public service sector – 35% and 39% apprenticeships respectively (33% for Wales) and 29% and 33% of all programmes respectively (24% for Wales).
  • Other sectors which have a higher proportion of learning programmes than the Wales average are hospitality (both Conwy CB & Denbighshire); business administration, retail & customer services (Conwy CB only); and manufacturing (Denbighshire only). This reflects the area’s employment structures, and is also influenced by the courses available at local further education institutions.
  • Work-based learning programmes in the management & professional and construction sectors are under-represented when compared to all-Wales figures.

There are more women than men taking up both apprenticeships and other work-based learning – 63% of apprenticeships are filled by women in Conwy CB and 56% in Denbighshire (Wales = 57%).

Work-based learning programmes 2014/15

skills-1

Source: Learning Network analysis, Welsh Government (StatsWales)

As well as providing people with the skills they need for employment, apprenticeships may be an attractive alternative to university education for young people who cannot afford or are wary of taking on the debts formal higher education can place on students. This has been recognized by government, who introduced legislation that schools must promote apprenticeships as well and as much as they promote the higher education route.

As part of its push for increasing apprenticeships the government announced a new Apprenticeship Levy in late 2015, which is a new ‘payroll tax’ to help fund an increase in apprenticeships. Set at 0.5% of the employers wage bill and due to be collected through PAYE, the levy has already had a significant impact in the industry, with a lot of larger employers creating new apprenticeship programmes as a result.

For those young people who are less interested in going to university and keen to earn as they learn, the levy is set to create another attractive route into employment. Whilst the levy is generally well received by employers, getting the information across to other key stakeholders is more difficult. There is a stigma surrounding apprenticeships – both parents and young people see university as a measure of success.

Skills outside of the formal education system are also important in gaining and retaining employment. This includes basic life skills like time-keeping, building self-confidence, developing interpersonal skills, and personal hygiene. Schools must play a big part in equipping their pupils with these skills, particularly for those children who come from disadvantages backgrounds which may not equip them with the social tools needed to operate successfully in the workplace and wider society. Support is also needed for many people on in-to-work training programmes. A qualification or work placement on its own is not enough to secure long term employment and enhance an individual’s confidence in their ability to cope with the world of work. People and the organizations they are employed by may need ‘hand holding’ for some time after the official scheme or placement has ended to help avoid drop-off.

[i] The Role of Skills from Worklessness to Sustainable Employment with Progression – UK Commission for Employment and Skills September 2011

The chart below displays the recent trends.

Data


Source: Annual Population Survey, ONS

* NVQ 4 equivalent and above = HND, Degree and Higher Degree level qualifications

Qualification levels in Conwy CB and Denbighshire have generally been improving year on year, and figures for those with NVQ4 level qualifications or above are now well above the Welsh average for both unitary authority areas. Figures for those with no qualifications show a particularly positive trend, showing a sustained decline, and both authorities below UK levels in the most recent data [ii].

Both Conwy CB and Denbighshire have been successful in increasing skills through work based learning and apprenticeship programmes.

Chart: Work-based learning programmes, rate per 1,000 population*

Source: Learning Network analysis, Welsh Government (StatsWales)

However, despite all these improvements in qualification levels over the past two decades, a June 2011 survey in Conwy County Borough found that 31% of the 200 local businesses who responded identified problems with recruiting sufficiently skilled staff[iii]. A similar survey in 2015 survey undertaken by Conwy County Borough Council showed that 50% of businesses who employed school leavers found them unprepared for the world of work. Over 35% found college leavers unprepared and the figure was 21% for university graduates. A survey of 400 businesses in Denbighshire found that 15% of businesses reported having difficulty finding staff with the right skills. However, the vast majority of businesses (79%) reported not having any of the listed recruitment problems[iv].

These surveys covered a number of different employment sectors and confirm national research that there is a gap between the skills education provides and those that employers are looking for The main difficulties identified were a lack of basic communication skills, customer service awareness, an inability to work on own initiative and resolve simple problems, poor numeracy skills and poor team working skills[v].

The surveys also showed that employers in the area are concerned about a shortage of IT skills among their workforce. Technology is changing at a rapid pace and the need for local business to adapt to this change will need to be addressed.

[ii] The National Strategic Skills Audit for Wales 2011 & ‘The Employability Challenge’, UK Commission for Employment & Skills, 2009

[iii] Denbighshire Business Survey 2015, Denbighshire County Council

[iv] Conwy business survey 2015, Conwy County Borough Council

[v] Annual Population Survey, Office for National Statistics

For the public sector, as well as contributing to the apprenticeship levy they will also be required to meet the legislative requirements contained within the Enterprise Bill. This legislation will stipulate that all public sector organisations will be required to make sure that 2.3% of their workforce are apprentices at any one time. This will potentially be a significant change to the way public sector organisations recruit and train staff.

UK Commission for Employment and Skills produced a series of insight reports in 2015 which highlight the challenges facing key employment sectors [Vi]

  • Health and social care – Increased demand for care, growing patient/service user expectations, improvements in treatments and technologies and the political and social push for resource efficiency means the health and social care sector is expected to be much more flexible than in the past. This can be seen, for example, in physiotherapists’ growing role in delivering reablement support in community settings, and nursing auxiliaries’ increasing specialisation and growth from providing primarily a support function to increasingly taking on additional clinical duties. There are also recruitment concerns for the future. The current workforce is predominantly female, has an older age profile, and is more highly qualified than the economy as a whole.
  • Retail sector – New technology requires workers to have up-to-date IT skills, which can be a challenge for older workers who are less likely to have good IT skills than younger workers. The wholesale and retail sector has a comparatively low-qualified workforce, with only 22% holding a qualification at or above QCF level 4. Predictions suggest that by 2022 holding qualifications at this level will be a pre-requisite for 34% of wholesale and retail jobs and half of jobs across all industries. In order to meet the predicted skills demand retailers will need to upskill existing workers and attract appropriately skilled new entrants. The UK Commission’s Employer Skills Survey 2013 show that 55% of retail establishments with skills gaps identify gaps in the customer handling skills of their existing staff. 60% of sector employers with skills shortage vacancies have difficulty recruiting employees with these.
  • Energy sector – Evolving energy policy, the emergence of new technologies and the transition to a low carbon economy are prompting radical changes in energy consumption, management and storage. The skills mix required by sector employers is expected to evolve in the future, to include soft skills, technical skills such as data analytics, as well as knowledge of new technologies as they emerge. This is a high skill sector with a limited supply of skilled and experienced workers due to strong competition for skills between sub-sectors, other sectors and countries; uptake of the most sector-relevant STEM qualifications not meeting employer demand; poor visibility of (and consequently interest in) the energy sector as a career prospect among young people and potential new entrants from other industries.
  • Digital and creative sectors – The greatest recruitment challenges are currently experienced by those seeking workers with digital skills. Graduate recruitment is an important source of workers for the sector, but there are concerns that many graduates leave university without up-to-date technical skills, or the softer skills required to be effective in the workplace. Rapid technological advances are leading to skills gaps amongst the existing workforce. At the same time, employers encounter fewer difficulties recruiting to some more creative roles which are extremely attractive to potential employees. However, it would be wrong to draw a simple distinction between the digital and creative sub-sectors. The boundaries between digital and creative are becoming increasingly blurred and employers increasingly seek a fusion of creative and technical skills, combined with business and softer skills. Significant technological trends will include: strong growth in demand for technology from across the economy; the growing importance of cyber security; the convergence of content across platforms; mobile and cloud computing; big data and analytics; the automation of routine tasks; new applications of social media; and new business models and collaborative platforms. The future development of the sector could also be influenced by regulatory changes.
  • Advanced manufacturing – Broadly described as manufacturing that is intensive in its use of capital and knowledge and requires a high level of technology utilisation and Research and Development. Although manufacturing employment as a whole is expected to decline up to 2022, recent forecasts have predicted that advanced manufacturing is expected to grow significantly in the coming years. The role of production managers is expected to see an increasing workload, and will require enhanced business skills as well as keeping pace with production technologies. An increase in the role within the industry of biochemists and biological scientists is anticipated. Production is expected to become more complex and require higher skill levels across the board. Software skills will be required to maintain machinery. Assembly line roles are expected to decrease in number but increase the skills levels – particularly in IT – that are needed by operatives. Across the UK the sector is expected to need 1.2 million new workers between 2012 and 2022, to both support growth and replace those leaving the sector.

Responding to growth in the energy sector, in particular in response to the new nuclear power facility on Anglesey is of specific interest to the area at the moment. Skills in the area need to be up to the challenge of the construction, running and maintenance of the new power station. This is not just about specialist engineering skills, but manufacturing and construction benefits as well. The demand will be high for competent and experienced staff and we need to make sure that the local workforce is prepared for that demand so that the economic benefits are realized locally.

Investment through enterprise zones in neighbouring authorities mean that both counties should prepare for growth in the energy sector, in particular in response to the new nuclear power facility, and a further growth in advance manufacturing in the Deeside Area.  Likely requirements will include specialist engineering skills, and new jobs in manufacturing and construction.

[vi] https://www.gov.uk/government/collections/ukces-sector-insights-reports-2015

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