Category: Research

THE SKILLS IMPERATIVE 2035: ESSENTIAL SKILLS FOR TOMORROW’S WORKFORCE.

The National Foundation for Educational Research (NFER) has published a report looking at the skills people will need for the future world of work.

The current world of work is in a state of transformation due to technological advancements, environmental changes, demographic shifts, and the impact of Covid-19. Calls are intensifying for workforce reskilling and a re-engineering of education and training to meet the demands of the future.

Current policy in England focuses on technical, digital and green economy skills, underpinned by strong literacy and numeracy and a knowledge-rich school curriculum. There is currently limited understanding of the combination of essential employment skills which will be needed, their relative importance, and how to develop them.

To fill this evidence gap, the NFER research study, ‘the Skills Imperative 2035: Essential skills for tomorrow’s workforce’ looks at:

  • Which essential employment skills will be most needed in 2035;
  • What will their likely supply be and where the gaps will be;
  • Which occupations and workers are most at risk of not having these skills;
  • Which skills will affected workers need to develop to transition into new employment opportunities, and
  • The role of educators and employers in helping to prepare young people and workers for the future labour market.

There seems little doubt that the labour market will change and evolve over time.  The report suggests that some sectors will develop while others will decline: –

  • Growing sectors are predicted to be health, social & personal care roles; education; professional services; sales/business development; creative, digital & design; green economy; information & communication; and natural & applied sciences.
  • Declining sectors are predicted to be administrative/secretarial; manufacturing/production; and retail/cashier work. Agricultural and business administration/finance sectors are also widely expected to decline.

The report also found that in addition to literacy & numeracy and technical / digital skills, that transferable and interpersonal skills will become ever more important in the face of technology. These are categorised as: –

  1. Analytical/creative;
  2. Interpersonal;
  3. Self-management; and
  4. Emotional intelligence skills.

While self-management skills and social and emotional strengths are generally found to be better predictors of income at the age 25 than cognitive skills, well-developed essential employment skills have also been linked to a higher level of academic performance. However, there is little doubt that there will be significant challenges in the forthcoming years for both educational institutes, training providers and employers, who will all need to respond quickly to address future need.

The full report can be accessed here.

OPPORTUNITY FOR ALL.

The Department for Education (DfE) launched a White Paper at the end of March which outlines government plans to level up education and make sure every child realises their potential.

The paper titled ‘Opportunity for all: Strong schools with great teachers for your child’ sets out the government’s vision for the school system by 2030, focused on world-class literacy and numeracy.

The White Paper also sets out four pillars to deliver on this vision:

  1. An excellent teacher for every child.
  2. High standards of curriculum, behaviour and attendance leading to calm and collaborative environments.
  3. Targeted support for every child who needs it.
  4. A stronger and fairer school system ensuring all children benefit from being taught in a strong family of schools.

There will also be: –

  • 500,000 teacher training and development opportunities by 2024
  • Specialist training to drive better literacy through a new National Professional Qualification for Leading Literacy; and
  • £30,000 starting salaries to attract and retain the very best teachers – with additional incentives to work in the schools with the most need.

The full White Paper can be accessed here.

YOUNG PEOPLE AREN’T STAYING IN THEIR JOBS AS LONG AS THEY USED TO.

The Institute of Student Employers (ISE) has found that young people aren’t staying in their jobs as long as they used to before, and this is a looming threat for employers.

Graduate turnover during the pandemic climbed to the highest level since the ISE started collecting the data in 2011, while high inflation and stagnating salaries could further heighten this issue.

Turnover rates for graduates have been on an upward trend since 2011. Companies are now retaining 72% of their graduates 3 years after they join, down from 79% in 2011.

More young people are citing dissatisfaction with pay as a reason for moving on, increasing to 40% in 2022 compared to 28% in 2021.

Staff turnover is highest in the legal sector with just 28% of graduates retained after three years. This is in stark comparison to health and pharmaceuticals, which has an 80% graduate retention rate.

The turnover of staff straight out of school or college – typically those recruited onto apprenticeships – has also been rising. Retention has sunk to the lowest point with only 71% retained after 3 years, a similar level to graduates.

A third of respondents said that the pandemic had increased the turnover of young people in their business, with employers facing a particular challenge in retaining young people with Black and Asian heritage, and those experiencing mental health issues.

As a result of retention issues, the majority (63%) of employers have implemented initiatives to try to improve the situation, but it now seems that salary may be the main determining factor.

To read the full article please access this link.

THE YOUTH EMPLOYMENT INDEX.

According to recently published research by PwC and the Youth Futures Foundation (YFF), a significant proportion of young people risk being stranded in low-wage work, or outside education or employment, in the coming decades, unless the UK creates a more inclusive and resilient labour market.

The Youth Employment Index research is a collaboration between PwC and YFF which measures, benchmarks and monitors youth employment and the access of young populations to education and training across OECD countries.

The UK labour market has performed in the middle-of-the-pack for many years in terms of its opportunities for young people, with many of the most vulnerable remaining inactive for long periods of time,  The latest published research shows that the UK has improved its ranking to 18th amongst other OECD countries, but has moved up from 20th overall.

Existing trends in the UK labour market were exacerbated by the Covid-19 pandemic, widening existing inequalities affecting young people, especially from minority groups.  At the start of the pandemic, youth unemployment increased by over four percentage points more than the rest of the workforce, with young people being over-represented in shut-down sectors who were more likely to already be employed in temporary jobs and zero hours contracts anyway.

The research recommends a wide range of policy areas to support the development of adaptable, resilient skills, empowering young people to find productive, rewarding work and promote their wellbeing.

The report has developed 13 separate policy proposals – including the development of existing policy and novel policy suggestions. These are policies are categorised under four key areas to help build a comprehensive youth policy strategy, namely: –

  1. Developing skills through investing in better vocational training, improving skills matching, encouraging a more flexible education system and increasing emphasis on place-based policies;
  2. Supporting people by providing proper career guidance and mentorship, promoting well-being in young people, and addressing inequality;
  3. Supporting incomes through improving social safety nets for young people, using targeted fiscal policy during economic downturns and supporting those negatively impacted by technological innovation; and
  4. Shaping labour demand by investing in high productivity sectors, improving legal and regulatory protections for all workers and developing appropriate measures of job quality.

To read the full PwC / YFF research report please access this link.

RISHI SUNAK TO REVIEW THE APPRENTICESHIP LEVY.

The Chancellor has announced that he will review the apprenticeship levy.

In his spring statement, he said said a review of the apprenticeship levy will be part of a new Treasury tax plan, which will be finalised in the autumn.

Sunak said:

“We lag international peers in adult technical skills. Just 18 per cent of 25-64 hold vocational qualifications, a third lower than the OECD average,”

“And UK employers spend just half the European average on training their employees,”

“So we will consider whether the current tax system including the operation of the apprenticeship levy is doing enough to incentivise businesses to invest in the right kinds of training.”

Treasury documents published just after the speech outline the government’s new ‘Tax Plan‘. The plan has four themes; cost of living, capital, people and ideas.

Under ‘people’, the Treasury states that “the government is increasing skills funding significantly over the parliament. We want businesses to do the same.”

Calls for flexibilities of the apprenticeship levy have come from employer representatives for years, with various sectors wanting to use funds for other training courses and associated apprenticeship costs like travel and wages.  It would now seem that the Treasury has finally acknowledged these calls for reform.

To read the full FE Week article please click here.

HAPPY NEW TAX YEAR.

The Resolution Foundation reports that the new tax year 2022-23 brings a number of immediate changes that will affect household incomes. Most benefits are rising by only 3.1%; the National Living Wage is rising by 6.6% to £9.50 an hour; while the energy price cap is rising by 54%.

Council Tax will rise by about 3.4% but around four in every five households will receive a £150 rebate in April through the Council Tax system; a 5p Fuel Duty cut has already taken effect; and VAT on hospitality has now returned to its pre-pandemic rate of 20%. But there are also a number of direct tax changes:

  1. The four-year freezing of Income Tax thresholds begins, alongside a freezing of Inheritance Tax, Capital Gains Tax and VAT thresholds. This will not mean a nominal jump in anyone’s tax bills, but means that the personal allowance will remain at £12,570 rather than rising to £12,960. Additionally, the higher-rate threshold will remain at £50,270.
  2. Tax rates for dividend income are rising by 1.25%, as part of the ‘Health and Social Care Levy’ package. This only affects people with over £2,000 of dividend income.
  3. Most significantly, all National Insurance (NI) rates will rise by 1.25% in April. This effects employers, employees and the self-employed, and means that the basic NI rate for employees will rise from 12% to 13.25%.
  4. Working in the opposite direction, however, the starting point for paying non-employer NI is rising in April from an annual equivalent of £9,568 to £9,880 – in line with the rate of inflation last autumn – but will then, as announced in the Spring Statement, jump to £12,570 in July.

The overall impact of these policy choices on people’s incomes will be complex, as changes in allowances and thresholds interact in complicated ways with changes in rates. However, in isolation they are more straightforward and can be characterised as follows:

  • The freezing of the Income Tax personal allowance will leave almost all of the 33m people who pay Income Tax each year around £80 worse off. The freezing of the higher-rate threshold will leave higher (and additional) rate payers an extra £160 worse off.
  • The personal NI rate rise will only affect earnings but, as an extra 1.25% tax on annual earnings above £9,880 (in April), it will mean additional tax of around £200 a year for someone earning £27,000, and around £1,100 for someone earning £100,000.
  • The significant increase in the NI threshold will mean a tax cut of £270 across 2022-23 (accounting for the fact that it does not take effect until July) for employees earning above the new threshold, and will also take around 2 million workers out of direct tax altogether.
  • Those affected by these changes and also receiving Universal Credit (UC) will only get 45% of any tax cut (or pay 45% of any tax rise), as the benefit is tapered against net earnings, so higher net earnings lead to a reduced UC award.

To full research article can be found here.

NATIONAL INSURANCE RISE STARTS TO HIT PAY PACKETS.

The burden of tax falling on workers and employers has increased as a hotly-debated rise in National Insurance payments takes effect.

In September, the government announced the rise in contributions from April 6th, in part to help ease the burden on the NHS.  Employees, businesses and the self-employed will pay an extra 1.25p in the pound. The extra tax is earmarked for government spending on social care.

Earnings levels at which people start to pay income tax have been frozen, increasing the chances of employees being dragged into a new band, with a higher rate of tax, if they receive a pay rise.

Employees pay National Insurance on their wages, employers pay extra contributions for staff, and the self-employed pay it on their profits.

From now on, employees will pay National Insurance contributions on earnings above £9,880 a year. From July, it will be paid on earnings above £12,570 a year.  Taken together, the measures mean that, over the next 12 months, anyone earning less than about £34,000 a year will pay less in National Insurance than they did the previous year, while those earning more will see their payments rise.

It means that, instead of paying National Insurance contributions of 12% on earnings up to £50,270 and 2% on anything above that, employees will now pay 13.25% and 3.25% respectively. The self-employed will see equivalent rates go up from 9% and 2% to 10.25% and 3.25%.

To full article can be found here.

PAVING THE WAY.

According to Sutton Trust research, pupils say that they are four times less likely to have received substantial guidance on Apprenticeships than they do about University.  Additionally, more than a third (36%) of secondary school pupils in England don’t feel confident in taking their next steps in education and training either.

Previous research by the Sutton Trust highlighted a postcode lottery of careers advice across the country. Since then, the government has set targets for schools built on the Gatsby benchmarks for good careers guidance and established the Careers and Enterprise Company.

The latest research finds that while progress has been made, there is still variation across schools, with the research identifying gaps between state schools with more and less deprived intakes, and between state and private schools.

The research asked teachers and pupils about the careers activities on offer at their school, including sessions with careers advisers, employer talks and trips to careers fairs. However, 36% of students said that they had not taken part in any of the activities listed, with state school pupils more likely to say this as those in private schools (38% vs 23%).

Schools in more deprived areas are also less likely to have access to a specialist careers adviser, with 21% of teachers in the most deprived areas reporting non-specialists delivered personal guidance, compared to 14% in more affluent areas.

The research also highlights differences in guidance given to students on academic and technical routes. Nearly half (46%) of 17 and 18-year olds (Year 13) say they received a ‘large amount’ of information on university routes during their education, compared to just 10% who say the same for apprenticeships.

COVID-19 has also had an impact on careers provision. 72% of teachers think the pandemic has negatively impacted their school’s ability to deliver careers education and guidance, with teachers in state schools being more likely to report this than teachers in private schools (75% vs 59%).

To further improve careers provision across schools, the Sutton Trust make a number of recommendations:

  • Every young person should have access to a professional careers adviser and a set minimum number of interactions with employers, including work experience.
  • Students should receive more information on apprenticeship options, with better enforcement of the Baker Clause, requiring schools to give information on a range of pathways.
  • More time should be earmarked in the curriculum to deliver careers education and guidance.

A link to the full Sutton Trust report can be found here: – Paving the Way.

HOMESENSE REACHES £1M FUNDRAISING LANDMARK.

Hundreds of young lives have been transformed as Homesense reaches the £1 million fundraising landmark according to the Prince’s Trust.

Lifestyle brand Homesense, which is part of TJX (known as TK Maxx and Homesense here in the UK), has raised this money to help young people build a better future for themselves since it first partnered with the Prince’s Trust in 2016.

Through a mix of support from Homesense customers, who bought products launched by the brand to help raise funds for the Trust, alongside till point donations and employee fundraising, has all contributed to Homesense being able to raise this staggering sum to support the work of the Trust.

The money raised has helped us to fund the education programme Achieve and has supported more than 1,500 school-aged young people who have struggled in the traditional school environment to build their confidence and skills.

A link to the Prince’s Trust article can be found here.

THE UK GOVERNMENT WILL NOT INTRODUCE MANDATORY ETHNICITY PAY GAP REPORTING.

The UK government will not introduce mandatory ethnicity pay gap reporting despite widespread calls for it to do so.

Sharing the update as part of its response to last year’s controversial Sewell report, the government has said it will help organisations undertake reporting, as well as discouraging use of “unhelpful” terms such as ‘BAME’.

Published on 17th March, the action plan, entitled Inclusive Britain, sets out more than 70 actions that aim to reduce racial disparities across the country.

While the action plan does not introduce mandatory ethnicity pay gap reporting, it outlines that the government will publish guidance at a later date that will assist organisations planning to provide voluntary reporting.

However, experts have expressed dismay at the government’s refusal to commit to mandatory ethnicity pay reporting.

The People Management article can be found via this link.