How well are the skills needs of employers in Northern Ireland being met?

Lesley Giles, Deputy Director UK Commission for Employment and Skills How well are the skills needs of employers in Northern Ireland being met? DEL lunchtime seminar 16th January 2014

Our Commissioners

What does the UK Commission for Employment and Skills do? Our ambition is to transform the United Kingdom’s approach to investing in the skills of people as an intrinsic part of securing growth

Skills matter, skills play a vital role in performance What’s the value of skills?Firms in the UK that don’t invest in training, are on average... 2x Likelihood of business failure Manufacturing Twice as likely to fail 2x Retail and Wholesale And this varies by sector... Transport and Comms 2x 4x Construction 9x Hotels and Restaurants

Are businesses investing wisely in skills?Are skills needs being met? There are 59,700businesses with a headcount of 1+ across Northern Ireland. Of which... 41% do not train (0.9 million) 63% train 37% do not train Of those who do train: Of those who do not train: 9% 31% 22% 15% 23% Do not know if they want to do more Would like to do more training Do sufficient training to meet needs No training need Perceived need but met barriers Key Challenge: Training investment is declining in real terms, and only 19% of UK businesses are adoptingHigh Performance Working practices, is this ambitious enough? Source: UKCESS 2011; Note: Figures relating to whether those who train and would like to do more training come from the skills equilibrium follow up survey, this survey covers employers with 2 or more working proprietors and no employees as well as employers with 1+ employees.

Is skills investment of sufficient quality?What’s the shape of the training market? Across Northern Ireland £1.36 BILLION is spent on training, however: £558 million is the wages of those being trained £805 million is on direct costs of training these direct costs include… £76 million was counted as fees to external providers for courses £228 million was spent on training management £221 million was spent on training centres* £235 millionwent on the wages of trainers providing on the job training *Training centres either on-site or off-site within the same company Source: UKCESS 2011, Investment in Training Survey

Pockets of skills deficiencies persist and are growing Number of vacancies per employee by employer size in Northern Ireland Percentage of vacancies that were skills shortage vacancies by employer size in Northern Ireland Between 2008 and 2011 there was a small increase in vacancies in Northern Ireland. This was primarily driven by micro businesses (1-4), where the number of vacancies per employee increased almost three-fold. However, while larger businesses (50+) experienced a fall in their vacancies, their skills shortage vacancies increased. Source: UK Employer Skills Survey 2011, Northern Ireland Skills Monitoring Survey 2008; Vacancy base: all establishments in Northern Ireland within each size band; Skills-shortage vacancy base: all establishments with vacancies within each size band.

Persistent skills deficiencies impact on NI firmsThere are opportunities to exploit business benefits Source: UKCESS 2011; Base: Employers in Northern Ireland with skills shortage vacancies (124 unweighted), Employers in Northern Ireland with skills gaps (618 unweighted)

Are skills programmes being sufficiently used? From two markets for skills to one Proportion of all employers using public or private training providers 22% Of employee’s trained were training towards a qualification Source: UK Commission’s Employer Perspectives Survey

Are skills programmes being sufficiently used? In total 6% of employers in Northern Ireland have apprentices currently on site and a further 7% offer them but don’t currently have any Source: UKCEPS; Base: All Northern Ireland employers

Are there sufficient career opportunities for young people? Across Northern Ireland, 28% of businesses had recruited education leavers in the past 2-3 yrs. 16 yr olds 53% 47% 17-18 yr olds leaving school 65% 35% 17-18 yr olds leaving FE 74% 26% Young people leaving HE 80% 20% Most businesses found education leavers well prepared for work (with preparedness increasing with age) • The minority of employers report issues with education leavers. • The two key issues were: • Experience of world of work • Poor attitude/ Personality

Work experience – a rare commodity The extent to which placements are offered to young people by size and sector By size Base: 2 to 4 (221), 5 to 9 (230), 10 to 24 (224), 25 to 99 (219), 100+ (106) By sector Source: UKCEPS; Base: Primary (55), Manufacturing (67), Construction (84),Trade (341), Business (208), Non-market services (245)

When we look at investment in training provided by employers across different sectors, there is considerable variation: Sectors matter to skills investmentA key basis to develop strong collaborations Sector Percentage doing training

Future skills considerationsInforming plans for growth in the economy Our latest Working Futures report shows that businessservices are expected to continue to be a key engine of growth in Northern Ireland Forecast output and employment by broad sector for Northern Ireland 2010 - 2020 Source: Working Futures

Leveraging investment: Employer Ownership of skills Investment Funds • Employer Investment Fund (UK) • Growth & Innovation Fund (England) • Employer Ownership Pilot (England) EIF & GIF Investment so far ... • 124 investments • £111m UKCES • £103m employer • EO Pilot investment so far ... • 36 investments • £102m UKCES • £98m employer “We want to encourage employers to take the lead in designing, developing and delivering the training and employment solutions they need.” Charlie Mayfield, Chairman UK Commission for Employment and Skills

LMI for All Data sources will be pulled or pushed into LMI for All LMI for All will be an online portal where the data is stored Developers will access LMI for All to get data to build websites and apps

Thank you! • Find out more… www.ukces.org.uk @UKCES

How well are the skills needs of employers in Northern Ireland being met?