The UK has just posted another set of dreary employment figures. With public sector job losses hitting the market as local and central government departments adjust to last year's spending review, unemployment is up. Now over 2.5m people are unemployed and youth unemployment is very high. In the US, job figures have continued to disappoint and both economies are suffering from flat growth.
At the same time, reports in the US and UK continue to identify skill shortages as a challenge in recruitment and growth. Recent reports from the US and UK cite both a lack of specific industry skills as well as general entry level and basic skills. Interestingly if you also look at European youth unemployment and the challenges in India and China around rural skills training similar issues emerge.
A common thematic globally is the mismatch between the skills requirements of employers compared with the supply of those skills from education and learning providers. Often the responsibility for these areas of policy sits in two or three different parts of government, and then is split between central/federal and state/local government. At the same time business tends to talk about immediate skills shortages and is often less effective at identifying what it needs over the next 3-6-12-24 months.
It is very difficult to plan for an economy's skills requirement. You do need to have a view on emerging industries that may require upfront investment such as green technologies. Similarly, there are specific geographies where it may be clear that investment in particular skills or retraining is required. However these are the exception and not the rule. More important is designing a system that provides for resilience in the labour force and a more dynamic policy approach which allows the suppliers of training and employers of labour to broker the right skills at the right time.
Internationally, from my work there are four crucial approaches that enable this, In my view, these are essential in dealing with global recession/growth and inequality in the match of skills to business needs where there is relatively higher growth.
1. Integrate employment and skills provision. Too often skills provisions are supply driven with too little focus on what employers need. Employers can be poor at articulating positively what they will need next year as opposed to what they need tomorrow. This requires better advice for individuals and businesses and a dynamic not static education and learning system interfacing with business.
2. Pay for results. Funding needs to be linked to progression, outcomes and impact. This is both in employment and also in skills/accreditation of the individuals but within the world of work. Again, governments have divorced these issues and as a result we have employed, unqualified people and qualified, unemployed people.
3. Personal budgets/vouchers/coupons. Where people re-skilling do not just have access to funds providers by suppliers, they tend to be able to make better and more informed decisions. This requires some bravery and it is difficult in policy terms, however, personal budgets secure ownership and in many cases people are prepared to make their own financial contribution. This last point is essential in the link to work, because the thought is 'how do I pay it back?' it is linked to employment. Where this is used with quality advice on real employment it has a positive impact on closing the mismatch on skills availability and unfilled jobs.
4. Intervene earlier to prevent crisis. re-training and utilising flexible skills is critical in avoiding skills atrophy. At the same time, people acquire lots of other 'challenges' if they are out of work for a long time - debt, mental health, loss of confidence, loss of housing, family breakdown. Too often the access to employment and skills support is 'too late'. By using payment by results, utilizing savings from future spending reductions and tackling the issues earlier rather than waiting for crisis, better, cheaper and higher performing services can be developed.
Predicting recession is hard. Improved resilience of flexible and transferable skills in communities is crucial to lessening the impact of recession and enabling economies to recover. Learning across boundaries is vital. Increasingly this needs to be done by deliverers such as further education, school providers, higher education operators, welfare and employment organisations. Governments have to set up a policy context but the hard yards on the ground are the responsibility of the operators in the public, private and voluntary sector.
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