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Demand for Skills

Report Segment: Demand for Skills

The demand for skills is more complicated than it may first appear, and calls for demand led training often lack clarity about whose demand it is they’re talking about. “Demand” is a multi-faceted term – sometimes referring to individual demand (the student), at other times demand as anticipated by government as a proxy for macro demand for the nation; and occasionally, it has meant the actual demand for skills from employers – based on their individual company need. But as we have seen above, employers perceived ‘demand’ does not always translate into recruitment ‘action’.

There is a further problem with demand in connection with skills shortages and perceived recruitment difficulties; employers naturally seek a labour and skills market where both the labour and skills required are in abundant supply. This not only improves choice and depresses labour cost, but also keeps existing labour ‘on their toes’. Intervention based on ‘perceived employer demand’ may simply create a dis-equilibrium in the market – an oversupply of specific labour or skills.

In terms of skills gaps, the 80/20 model is helpful because it demonstrates the distinction between ‘generic technical’ and ‘upskilling specialist’ skills. The former is a key part of mainstream pre-work provision whereas the latter is usually a company training issue.

These two paradigms offer an interesting way of looking at the skills economy which is explored in the table below. This suggests that skills can be analysed by determining whether the need is an 80 or 20 gap or whether it’s a 80 or 20 shortage. The four boxes provide different solutions. This is a simple framework which could be adopted in planning sessions to help clarify objectives.

80%20%
Skills Gaps Raising standards – ensuring that learners are aware of the need to have relevant skills. This is more about encouraging individual responsibility than long range planning. Taking advantage of upskilling opportunities to ensure one’s skills profile continues to meet company needs.
Skills Shortages Increasing the ‘flow’ of skills into industry. This involves strategic decisions about which courses to fund. But of course the student demand cannot be coerced.Identifying critical skills needs – and working with industry to provide organic/local solutions as opposed to simply importing the necessary skills.