Approaches & methods of understanding occupations in high demand: A review of the evidence and recommendations for moving forward

Transcription

1 Approaches & methods of understanding occupations in high demand: A review of the evidence and recommendations for moving forward Marcus Powell &Vijay Reddy Presentation to LMIP Policy Roundtable 30 September 2014

2 Framing the issue The shortage of appropriate skills is a constraint to development. From a planning perspective it is important for a country to know where the greatest shortages exist and thus which occupations in high demand Estimating occupations in high demand is complex and there is no common methodology to calculate occupations that are scarcer than others This presentation outlines a methodology to develop this list.

3 LMIP integrated model to skills planning i. improved levels of education and training for the population; ii. improved workplace skills training and iii. emphasis given to a demand driven approach to planning in which strategies for skills development are linked with those for economic development.

4 In this presentation we will: Current definition of a scarce skill Understanding what causes scarce skills What lessons can we gain from international best practice Experience of SA in developing scarce skills list Recommended methodology for developing a revised scarce skills Moving forward with the operational plan

5 Definitions A scarce skill is defined as a situation in which the demand for a specific occupation outstrips the supply of this occupation at a specified price (or wage). Scarce skills occur in the external labour market where employers attempt to recruit for vacancies. A critical skill is primarily concerned with measuring the skill or competencies that a worker needs to perform his job in the light of recent changes in his job, such as the introduction of new technologies, innovative management practices or legislative reforms. This demand occurs in the internal labour market Global skills needs In the past labour markets operated within national boundaries, but now one needs to think in terms of regional and global labour markets.

6 Reasons and causes of skills shortages Type of skill shortages Market Failures Inadequate HR practices in companies Structural skill shortages Institutional failures in government Global shortages Temporary shortages Historically induced shortages Causes of skill shortages Examples Lack of LMI Underinvestment by individuals and employers Not enough time for supply to adjust Inadequate staff development Poor retention and motivation practices Failure of companies to investment in skills as a result of changes to business strategy Failure to coordinate supply & demand Failure of providers to delivery quality of skills Demographic and industrial restructuring in other countries and global demand for particular skills Introduction of a new employee to an organization and the need to adjust to new conditions The historical legacy of the past in which apartheid excluded people from access to skills How to track skill shortages Evidence on hard to fill vacancies Rising wage rates for specific occupations Information on enterprise investment in skills Evidence of HR policies Type of HR practices Survey of employers and whether employees have the skills to perform their jobs adequate Data on the degree to which providers and enterprises support the development of scarce skills Annual reports produced by the large recruitment agencies Scarce skills lists produced by other countries Data on the number of new employees and whether they receive training Data on the number of previously disadvantaged groups gaining access to skills

7 Past South African scarce skills lists Principal causes of South African skills shortage is the pre-1994 apartheid policies and structural shifts in the economy from inward focus to being a diversified and global economy. Early 2000 DoL provided an indicative scarce skills lists basis for investments in skills development and Immigration Act of Formalised attempts through the Human Resource Development Strategy (2001); ASGISA (2007) and JIPSA. DoL National Master Scarce Skills List (2007) SETAs identification of PIVOTAL skills to guide skills development

8 Other countries to develop scarce skills lists Country/Issue Sweden United Kingdom Australia Canada USA What term is used to Labour Skill shortages and skill Skill gaps and skill Skill shortages and skill Skill shortages and define scarce skills shortages/recruitment difficulties gaps shortage (both used for immigration purposes) gaps recruitment difficulties How many scarce skills There is a single scarce There is a single scarce A skills occupational list A skills list based on a Skill shortages are lists exist skills list skills list and a consolidated list points system identified What are the scarce skills lists used for? The scarce skills list are used for foreign workers in Sweden who are entitled to apply for jobs (instead of being overseas) The list should be used to guide how providers invest in skills programs, but it has mainly been used for immigration visas The skills occupational list identifies skill areas likely to contribute to meeting medium and longer term goals. The other is based on skills nominated by employers A point based list was used for migration. Now attempts are being made to link the list to areas of high demand Skill shortages are identified at the national level by the Bureau of Statistics. Individual states produce their own lists and undertake their own planning What methods or approaches are used to develop such lists and track shortages What specific calculations are performed to develop the lists? Interviews with a large section of employers in the private/public sector The employer survey is used to develop an index with a scale of 1 to 5 Reliance on quantitative data, particularly Labour Force Survey (LFS), employer survey and wage survey A number of indicators are constructed to measure shortages. Use of household survey data and also enterprise survey & employer vacancies An index is developed to help track qualifications that are in oversupply and undersupply Business pay-roll survey, records of job vacancies, sector skills plans & various surveys Canadian occupational projection system forecast on 140 occupations National household surveys, LFS and enterprise surveys Calculations on replacement demand, labour projections, turnover etc. How often are lists updated? What role do employers and other stakeholders play in putting together the lists? Once a year, but a labour market survey is conducted twice a year and this provides an input The employer plays a key role in determining scarce skill areas Once a year, but there might be plans to maintain the occupations on list for 4 years Employers have an input into the list, but the main decision is made by the government The list is updated on an annual basis Employers play a key role in identifying shortages through the state & territory governments The projection takes place on an annual basis Employers perceptions and the sector plans play an important role in determining skills Most of the surveys are updated on a quarterly basis Employers determine skill shortages in the confines of number specified by legislation

9 Lessons gained from how to identify scarce skills Geographical location & time period Levels of demand: e.g. institutional, sector, national, global Different dimension of scarce skills Type of skills: intermediate or higher? Purposes of scarce skills lists: e.g. DHET, DHA, employers Skills biased govt. initiatives

10 Assumptions for a scarce skills list Must capture different dimensions and levels of scarce skills Look at how long the scarce skill is likely to last (temporary or over the longer term) Other partners must recognize their role Appropriate MoUs and legislation must be put in place New procedures/systems are required Must be updated annually For education and training emphasis must be given to intermediate level skills Process must be provided for input, but not too bureaucratic A phased approach (I, II, III) will be required for this process

11 Phases in the collection and analysis of data to produce a list of occupations in high demand ing of job advertisements Understanding the demand for occupations Understanding the supply of occupations Strategic Integrated Projects Occupations required to support SIPS House-hold survey Understanding: wage trends. Occupational shifts Other indicators Workplace skills plans Enterprise training and investment in skills SETA priority/pivotal lists Enterprise survey Graduate enrolment and output by subject area and gender Phase I Top 10 occupations in demand based on SETAS SSP A representative survey of employers skill needs Tracer studies of graduate output from FET and HE institutions Job Opportunity Index Tracking of job advertisements Regional Demand Pilots Understanding regional demand Immigration and migration to and from South Africa Phase II Government input Draft consolidated list of occupations in high demand circulated for consultation Stakeholder input Final list of occupations in demand Phase III

12 Data sources and calculations to produce indicators to inform an index to measure occupations in high demand Data sources or methods to collect data Global surveys of occupations in high demand What data is required Calculations required to develop indicators What will the indicator measure Look at global talent lists or index produced on what occupations are in demand across the global Only broad data will be available on the demand for occupations. The indicator will help understand the global demand for skills. Household or Labour Force Survey Occupational structure of labour force Numbers employed and unemployed Wage levels of people in different occupations Absolute growth in employment by occupation/industry Changes in the relative share of occupations to employment and unemployment Changes in the wage level by occupation and sector These measures provide an indicator of the volume of demand for a specific occupation at the national level The wage indicators helps understand where price rises occur due to a perceived increase in demand for an occupation Employer based survey Response to question about hard to fill vacancies and also vacancies, as well as turn-over Analysis of hard to fill vacancies Analysis of hard to fill vacancies as a percentage of total employed Analysis of turn-over Provides an indication of imbalances in the labour market at the national level for specific occupations SETA top 10 list of occupations Data collected from Work Place Skills Plans Analysis of hard to fill vacancies Analysis of hard to fill vacancies as a percentage of total employed Provides an indication of imbalances in the labour market at the sector level for specific occupations JOI Regional Pilots /SIPS Data collected on vacancies and also on hand to fill vacancies Data on hard to fill vacancies at the regional level/sips Analysis of hard to fill vacancies Analysis of hard to fill vacancies in SIPS WSPs Data on firm training Analysis of employer commitment to train in specific occupational areas HE/FET levels (HEMIS) Data on enrolment levels and graduation by subject area Analysis of graduate completion rates in specific subject areas Provides an indication of imbalances in the labour market at the national and sector levels Provides an indication of imbalances in the regional labour market /SIPS Provides an indication of the volume of skill formation in the workplace Provides an indication of the volume of skill formation in formal providers

13 Moving forward with implementation To develop the operational plan we need to: Confirm with stakeholders over which indicators should be utilized to track progress of scarce skills (how should this happen) Determine the precise type of data that needs to be analyzed to produce the indicators Assess whether the data is already available Confirm what format is require for the data and whether an MOU is required Where data is not available identify how it could be collected, what instruments are required and who should be responsible for this process. Determine the procedures for disseminating the scarce skills list for feed-back Confirm which government department should be involved in the production of the final scarce skills list/ Should there be one or more lists? Identify the format and the way in which the final list should be disseminated Determine a strategy for how the list will be updated over the next 12 months

14 How the scarce skills list could be used? Group/ Responsibility Learners, young people and the unemployed DHET guidance Career SETAs/ Provincial Premiers offices DHET Education and Training providers DHET Employers DHA How the list will be used Inform learners, young people and the unemployed about the most appropriate programmes to study and those likely to result in productive employment Identify those skill areas that are likely to be targeted in sector and provincial level skills strategies To inform providers about the allocation of scholarships To inform the allocation of work visas Format/ media required Identify appropriate learning programs that will help learners develop scarce skills that are in high demand This information will need to be placed in a pamphlet and on suitable web-pages List of occupations contained in the scarce skills list Programs of studies linked to scarce skill areas will have to be identified This also rests on the assumption that a new scholarship fund will be established using the levy fund An identification of visas that can be allocated based on the scarce skills list (and employers needs)