UK Skills Mismatch in 2030. Industrial Strategy Council. Research Paper. October 2019[1]. A few comments and observations.

A recent report by McKinsey for the UK’s Industrial Strategy Council explored which qualifications, knowledge and workplace skills are likely to face greater or lesser mismatch by 2030 as a result of the changing nature of work.

The key findings of the UK Skills Mismatch in 2030 study are:

  • The analysis finds that by 2030, 7 million additional workers could be under-skilled for their job requirements; this could currently constitute about 20% of the labour market with 0.9 million additional workers could be over-skilled.
  • The most widespread under-skilling is likely to be in basic digital skills; which are likely to look increasingly advanced, compared to what we might consider ‘basic’ to look like at present. In total, 5 million workers could become acutely under-skilled in basic digital skills by 2030.
  • 1 million workers are likely to be acutely under-skilled in at least one core management skill (leadership, decision-making or advanced communication), of which 400,000 are also projected to be acutely under skilled in basic digital.
  • 5 million workers are likely to be acutely under-skilled in at least one STEM workplace skill.
  • 800,000 workers are likely to face an acute shortage in teaching and training skills; the ability of those in the working environment to upskill others. This under-skilling needs to be addressed or the delivery of broad-based reskilling efforts are likely to be significantly hampered.

As with all McKinsey’s contributions to the skills debate national and globally, there is much of real value in this latest contribution. There are however several points which need making to ensure the estimates and forecasts made in the report are placed in context, and these can be divided into six broad categories.

  1. Nature of the occupation change

Ease of transition: When viewing skill mismatches, it is important to consider the distance (in training and experience times) between the current and target (future) occupation.

 Occupational volatility and drift: Some occupations are changing faster than others and so the churn of the tasks being performed are more rapidly changing. In any such analysis it is useful to split the occupations into differing forms of stability and how they drifting to form emerging and new ones. This occupational transition needs to be built into the forecasting models seeking to capture how current and future skills change at the occupation level.

  1. Scale

Geography and City Regions: The report looks at the whole UK picture and it will probably be very different around the country and across the key city regions which make up the UK economy.

  1. Methodology

Splitting the total range jobs considered: Rather than take all of the jobs in the economy, it should be possible to split the total number down and exclude, for example, those occupations which are licensed and so are by definition matched as regards skills. You can enter a licenced occupation without appropriate skills, and these must be maintained.

Skills half-life: Apart from skill mismatches, it is also important to take account of the half-life of specific skill sets which are currently lasting as little as two years in some areas e.g. software.

Predicting future capability to acquire skills: Once a person is in the labour market and has acquired a series of skills, they have developed a capability of acquire future skills. It should be possible to calculate the probabilities to predict the likelihood someone in succeeding in the acquiring of a new skill.

  1. Individual

Individual: How are the skill mismatches viewed from the job holder point of view, and what are they seeking to do to ensure they can master the demands of their current role. Incentivising the individual is vital rather than just focusing on employers.

Career Pathways: While skill mismatches exist in current roles, how well placed are incumbents to make further progress? What is their capacity (potential/trainability) to grow and improve? Assessing skill mismatch by role relevant qualification and not recognising those acquired through informal, non-credentialed routes means under-recording the potential to adapt to new occupational roles.

  1. Employer focused factors

Design of roles and jobs: How far can skill mismatches be reduced by re-designing the role? By setting the individual role in the context of a team and/or across a whole process, does this help reduce the impact of the skill mismatch? Does it also provide a means for skills development and mastery?

Induction and staged development: Where the degree of the skill mismatch is relatively small (say a few weeks training and experience), it is possible to reduce the impact of the mismatch by re-designing how job holders are inducted and equipped to learn effectively on-the-job.

Recruitment and fit: Skill mismatch is a difference the skills possessed by an individual and the role they hold, but will a combination of role re-design, induction re-design and more effective recruitment for the candidate’s potential and capacity to learn-at-speed can all greatly help to reduce the skill mismatch.

Reward, recognition and retention: In addition to reducing the potential and real skill mismatch, there are also all the usual factors around pay and rewards and attracting and then retaining appropriately qualified staff.

  1. Data

Data, information and tracking: Highlighted in the report is the use of detailed, task level and related elements of an occupation, and these data are crucial in the on-going monitoring and forecasting of occupation change and the development of plans to ensure sustainability of employability going forward. These data also support the re-definition based on their changing content and relating them back to traditional standard occupation classification systems.

Notes

[1] For a copy of the report and the background to the project see: https://industrialstrategycouncil.org/20-cent-workers-could-be-under-skilled-2030-new-analysis-finds