Government growth and skills policies should target career-changers

This blog was first published in FE Week on Tuesday 10 September.

NFER’s latest research, funded by the Nuffield Foundation, says that over a million jobs could be lost from a set of ‘high-risk’ occupations in the next decade. Labour’s manifesto promised new policies, like the Growth and Skills Levy and the creation of Skills England, to “provide pathways to good prospects for all”.

Achieving this goal requires a focus on helping people get back into work quickly when they lose their jobs, by switching careers into growing occupations.

A changing labour market

Today’s workers are facing huge economic change, as highlighted in our latest paper. Our projections show that over one million jobs could be lost from declining occupations by 2035. This is driven by the adoption of technology and automation in the labour market, as well as longer-term trends in the economy.

Twelve million people work in the high-risk occupations that will see the bulk of these job losses. These include, for example, administrators, secretaries, retail workers, cleaners, and hospitality workers. They tend to be lower paid and less qualified.

Historically, workers who have changed jobs when in these high-risk occupations did not move too far. Over the last decade, 12 to 14 per cent of these workers changed jobs each year, but most moved to similar jobs.

However, given the number of jobs in these high-risk occupations will be declining over the next decade, many workers who are displaced may struggle to find a similar role. They may need to make a career change to get back into work.

The career-change challenge

The analysis suggests people looking for new jobs in growing areas of the economy are likely to face two main options.

Firstly, there are some growing occupations that are lower paid, such as care work or customer service jobs. Whilst some retraining is likely to be required for these jobs, many workers in high-risk occupations appear to have broadly similar Essential Employment Skills* and level of qualifications needed to do these roles.

However, there is unlikely to be enough new jobs in these growth areas to absorb all the jobs lost from high-risk occupations.

Secondly, there are likely to be more opportunities in better paid, professional or managerial occupations that require specific skills and qualifications. Examples include teaching or IT. We project larger numbers of new jobs in these areas, but workers in the high-risk occupations do not tend to have the Essential Employment Skills* needed to do these jobs.

There is also a clear qualifications gap; people who have tended to make these moves have higher qualifications than others, suggesting adult and further education will be critical to them in achieving these moves.

The challenge is therefore a big one, but the evidence shows there is untapped potential out there. An earlier paper in our project shows that some workers in lower-skilled occupations have higher level Essential Employment Skills than they use in their current jobs. The government, education providers, employers and career advisors should focus on ensuring people can recognise, describe and demonstrate those skills when applying for jobs.

Change is needed

Helping people realise their potential and stay in work by changing careers is vital for economic growth. Whilst Government will play an important role, a wider response is needed. That is why NFER is holding a roundtable to bring together stakeholders across the skills system and publish a recommended set of key actions later this year.

For now, the new government’s focus will be on Skills England and changes to the levy. There has been long-term decline in both state-funded and employer-funded training for workers in England. These new policies must be aimed at reversing that decline. That will help ensure that everyone who faces displacement from the labour market in future can get excellent training and overcome the career-change challenge.

* The Essential Employment Skills are communication, collaboration, problem-solving, organising work, creative thinking and information literacy. Analysis shows us that these skills are used most widely across the economy today and are set to grow in importance by 2035.