Former Royal Eye Hospital Development: Web viewIn 2011 key partners. New Economy, North West...

Making the Transition Beyond the Public Sector:Are we doing enough to support the transition to private sector jobs?

A report commissioned by

The North West Learning Provider Network and New Economy

Researched and written by

New Economy and InclusionNW

CONTENTS

1...................................................................................EXECUTIVE SUMMARY

.............................................................................................................3

2 INTRODUCTION.......................................................................................6

PART A: RESEARCH

3 MAKING THE PUBLIC-PRIVATE TRANSITION.......................................7

4 KEY MESSAGES FROM THE RESEARCH............................................22

PART B: ECONOMIC OUTLOOK

5 PUBLIC SECTOR CHANGES.................................................................27

6 THE NORTH WEST LABOUR MARKET IN 2010...................................30

7 THE NORTH WEST LABOUR MARKET OUTLOOK..............................37

8 EMPLOYER SKILL REQUIREMENTS BY SECTOR...............................46

9 CONCLUSIONS.......................................................................................51

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1. EXECUTIVE SUMMARY1.1 In 2011 key partners1 in the North West (NW) met to discuss the issue of public

sector redundancies and the challenge this posed to the region in the years ahead. The group’s main concerns were:

the scale of the challenge for the NW region;

the attitudes of private sector employers to employing former public sector workers.

how public sector workers are responding on an individual basis; and

the extent to which agencies, stakeholders and providers are ready to meet the needs of people exiting the public sector.

1.2 This research and report was commissioned by New Economy and the North West Learning Provider Network to address these concerns. InclusionNW (part of the Centre for Economic and Social Inclusion) conducted the research and, in conjunction with New Economy (who provided the economic data and assessment), wrote the report.

1.3 The key messages of the report are as follows.

The NW depends to a significant extent on the public sector for employment. Public sector redundancies will pose a challenge to the region’s economy in the years ahead. With some 76,000 public sector redundancies predicted between 2011 and 2013, the impact on the region’s economy, communities, families and individuals is likely to be substantial.

Growth sectors over the next five years include financial and professional services, hospitality and tourism, retail, construction, and creative / digital / media. Manufacturing and public sector employment will both markedly decline in employment. Job opportunities will not be distributed evenly across the NW, with high concentrations likely to be seen around Greater Manchester (GM), Lancashire and Liverpool.

Public sector employees are faced with negative perceptions of their ability to transition from private sector employers. Many employers have misconceptions of the skill and motivation level of public sector employees. However, employers with real experience of hiring from the public sector are positive about it and are likely to do so again in the future. Feedback from employers identified “commercial awareness” as the main skill shortage from public sector workers followed by “appropriate attitude and working culture”.

There is limited hard evidence that public sector employees are seeking work in the private sector or are actively preparing for the transition. The

1 New Economy, North West Learning Provider Network, Union Learn, Jobcentre Plus, Skills Funding Agency, North West Employers’ Organisation, and InclusionNW

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number of public sector employees interested in employment in the private sector is approximately equal to those who wish to continue working in the public sector.

Public sector employees have received limited support from their employers to help them find new jobs, the majority of support is provided externally. Support is being developed as part of strategic growth plans in regions across the UK. This includes specific support for public sector workers seeking transition into the private sector. Across the UK many Local Enterprise Partnerships (LEPs) are taking a leadership role in this area.

1.4 Key messages for key groups that this research is of relevance to are set out below.

Public sector employers should take steps to ensure workers at risk of redundancy have the opportunity to improve their understanding of the current and future labour market. Access to information about the local labour market, growth sectors and training that will assist them to gain a new job in the future is key. Public sector employers should also link with providers and partners to identify opportunities to link people to support and jobs that are coming in to the area. Support should be provided in diverse ways, helping people move into self-employment, time off for training, coaching, mentoring, job search, career guidance, confidence building, and volunteering, and forging links with business to encourage work trials, secondments and work experience. There is also a need to recognise that stress related absences may increase especially as the threat of redundancy lingers over people for months or even years.

Education and training providers. Good quality Information, Advice and Guidance needs to be a given. Labour market information should be used to make informed curriculum choices that are designed to train people for job growth and sectors that are hiring. Better communication of the support that is already available is also key. Providers should capitalise on the flexibilities in the adult skills budget, including the use of the Innovation Code. New support packages could be developed that utilise existing adult skills funding for this agenda, as well as exploring the potential to charge a fee to individuals for training or career development. Support with plugging skills gaps, such as commercial awareness and sales skills training, should be prioritised.

Private sector employers. Whist not suggesting private sector employers need to change their practices, there may be merit in considering adapting recruitment processes, for example through greater use of work trials. Employers should not be overly concerned about whether the candidate is from the public sector or not, public sector workers are a source of huge potential and are often highly skilled and experienced. Private sector employers who have focused on what the candidate has done as opposed to where they have worked report that hiring them was a positive

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experience that they would be happy to repeat. Employers should communicate what business growth looks like for the future to providers who can attract people to re-train for the longer term.

Stakeholders should provide leadership for partners, providers and public and private sector employers. This could involve working collaboratively to make information as accessible as possible to public sector workers, communicating labour market information, using flexibilities through city deals and other mechanisms, ensuring strategic plans take account of the shift of jobs from public to private over the coming years, and learning from the best practice that has been tried and tested in coping with large scale private sector redundancies.

Public sector workers at risk of redundancy need to become more familiar with the types of sectors and jobs that are a realistic option for the future. Although there are many benefits to being employed in the private sector, a shift in expectations in some aspects may be necessary, especially around types of jobs, hours and flexibility. There are relevant skills that transfer from the public to private sector and people need to be comfortable in talking about their skills and experience in a language that applies to the private sector. The job search market has changed rapidly over recent years and all job seekers need to be open to new ways of getting a job (including through social media and networking).

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2 INTRODUCTION2.1 Public sector redundancies in the NW economy pose a significant challenge to

the region. Without a fundamental shift in the employer base and more jobs in the private sector in the years ahead, the impact of the 76,000 redundancies (34,700 in public administration and defence, 13,600 in education and 11,900 in health) predicted between 2011 and 2013 will be hard-felt.2 It will therefore fall to private sector employers to generate more employment opportunities in the coming years.

2.2 Part B of this report presents: a detailed analysis of the changes in public sector employment broken down by LEP area in the NW; an overview of the NW labour market in 2010; the outlook for the NW; and a summary of employer skill requirements. The analysis focuses on current employment opportunities and skills issues in the NW economy in order to inform the transition that must take place over the coming period.

2.3 However, behind every redundancy statistic is an individual who has to make a set of choices about his or her future. Part A of this report therefore focuses on the feedback gained from surveys and interviews with public sector employees (current and former) as well as stakeholders, agencies and employers. The aim was to find out more about individual’s experiences, explore how, or if, they found support, identify what their job aspirations and expectations are beyond the public sector, and determine what more, if anything, can be done to ease the transition. It provides insights in to how people affected by cuts are making a transition away from the public sector, how private sector businesses view ex-public sector workers as potential employees, and what can be done locally to smooth the transition.

2 Adam Crockett and Nicola Christie, Public Sector in the North West North West Regional Development Agency 2011

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PART A - RESEARCH

3 MAKING THE PUBLIC-PRIVATE TRANSITION

3.1 Primary and secondary research was conducted in order the determine attitudes towards the transition of public sector workers into the private sector, and to ascertain current best practice. Research included:

a review of evidence and practice in the UK;

surveys with public sector employees (past and present) in the NW and private sector employers; and

qualitative interviews with public sector employees (past and present), public and private sector employers, education and employment support providers and other relevant stakeholders.

3.2 The aim was to:

determine public sector workers views of finding employment in the private sector;

investigate private sector employers views on hiring private sector workers; and

highlight examples of support offered to public sector workers to help them transition into the private sector

Overall messages

Job aspirations and expectations

3.3 Public sector employees appear to be interested in the prospect of employment in the private sector. Survey results showed that more than two thirds of public sector workers would pursue a career in the private sector and nearly half (43%) of respondents working in the public sector are currently searching for a job. However, most are likely to want to continue working in the public sector.

3.4 Employees are generally under-informed about the reality of the jobs market – their expectation remains to get a job similar to the one they have/had.

Skills

3.5 Public sector workers tended to be well qualified, with over four fifths qualified to level four or above. They are generally older and have a lot of experience, with many having been employed in the public sector for over 20 years.

3.6 From the employers’ perspective (other than having technical skills, soft skills, people skills and experience) having the appropriate attitude, working culture

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and interest in and enthusiasm for the role are the essential qualities employers look for in prospective staff.

3.7 Employers who have received applications from public sector workers report that public sector candidates are better qualified but crucially lack commercial awareness.

Private sector perceptions

3.8 Public sector employees may be disadvantaged by the perceptions of private sector employers who have no previous experience of hiring from the public sector. There appears to be general concern across the private sector in regards to hiring former public sector employees. Many employers agree there is a stereotype of a public sector worker, and many employers think that public sector workers struggle to adapt to the culture of other workplaces.

3.9 However, the reality is somewhat different in that those employers with real experience of hiring from the public sector are positive about it and are likely to do so again in the future.

3.10 Only 19% of employers have hired someone from the public sector over the past two years, so experience (in our survey) is limited but may be reflective of the general trend.

Public sector employees’ views on transition

Existing evidence

3.11 There is a dearth of evidence to show that those moving out of the public sector are actually finding employment in the private sector, and limited evidence that public sector workers are actively seeking to move into the private sector (i.e. although our survey a high proportion said they were open to the idea, the actual evidence of this happening is limited).

3.12 A recent survey by a Hays recruiting (2011)3 showed that 36% of public sector workers viewed the private sector as a more attractive career option, however, an almost equal 35% wished to continue working in the public sector.

3.13 The survey results suggest that public sector workers are confident that they have the skills and experience to move into the private sector. A substantial 81% of public sector workers stated that they were quite or well equipped to work in the private sector. Despite this, the survey further showed that just over half (51%) of public sector workers believe a lack of transferrable skills would prevent them from making this transition.

3.14 Research by Hays and London Chamber of Commerce and Industry (LCCI)4

shows that many public sector workers have highly marketable experience, such as:

3 Hays Recruiting Experts Career Outlook Survey 20114 Hays and London Chamber of Commerce and Industry The Challenges of Transition: From Public to Private 2011

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management of multi-million pound budgets, including critical decision making;

identification and implementation of cost control and best-value initiatives;

compliance with complex regulatory or legislative requirements;

management and mitigation of risk;

development of people and teams;

management of complex, highly political stakeholder relationships; and

knowledge of how governmental organisations work and an in-depth understanding of their requirements.

Research findings

3.15 The research findings include perceptions gathered from survey data and telephone interviews with public sector workers. They provide an overview of experience, expectations and support needs in regards to moving out of the public sector and potentially moving into the private sector.

Workforce

3.16 Almost all our respondents (95%) work or worked full-time in the public sector and have typically been employed in the public sector for long periods of time, many for more than 20 years of their careers, primarily in management, senior or qualified professional and technical roles.

Figure 1 Public sector employees’ length of time employed in the public sector

0% 5% 10% 15% 20% 25% 30% 35%

More than 20 years

10 - 20 years

5 - 10 years

2 - 5 years

1 - 2 years

Less than 1 year

Source: Public sector workers in the North West – workforce survey, Inclusion (2011-12)

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Figure 2 Public sector employees’ occupation level in current / most recent public sector job

0% 10% 20% 30% 40% 50%

Other

Customer service occupations

Personal service occupations

Skilled occupations

Administrative and secretarial occupations

Qualified professional and technical occupations

Management or senior official occupations


3.17 The vast majority (88%) report that their employer has made staff redundant due to budget constraints or government cuts in the past 12 months and almost as many (82%) think that their employer is going to make staff redundant in the next 12 months.

3.18 Half of respondents think it is either quite likely, very likely or certain that they will be made redundant in the next 12 months.

Employment expectations

3.19 For those still in the public sector, nearly half (43%) of respondents are currently searching for a job. In line with findings from the review of existing evidence, many reported that they were searching for a similar role to their current position and admitted that this was because they did not know what else they could do:

“I don’t have a clear path to follow now and I don’t know what options are available to someone with my experience.”

3.20 In total, 74% of respondents working in the public sector report that they would like to change career or move into a new sector in their next job.

3.21 Many respondents have skills and qualifications, but when asked how these may be transferred into other roles, most admitted they didn’t know how these skills could be used. In addition, some report that they have undertaken internal training courses over the years that they perceive to be of little value to private sector employers as they were not accredited.

3.22 Of those who have already been made redundant or left the public sector for other reasons, there is a roughly equal split between those in work and not in work. Whilst small numbers, those who are working are, in general, earning less and working with less flexibility than they were in the public sector:

“I’ve done lots of training courses over the years, but I realise now that they are only internally recognised. I’m worried that they are not accredited and recognised as useful outside the public sector.”

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3.23 However, it is important not to lose sight of the fact that public sector job losses are part of a fundamental and structural change in the labour market. As one strategic partner said:

“This is akin to the changes we experienced with the closure of the mines…it’s as fundamental as that. There will not be more jobs in the public sector and people are experiencing the pain of that”

Job search

3.24 The survey results showed that public sector workers are most likely to want to continue working in the public sector should they be made redundant or leave their job for another reason. Other key sectors they are interested in are the voluntary and community sector and a fair proportion of people were actively considering self- employment or starting their own business. Very few were ready for retirement.

Figure 3 Employment options being pursued (or planned) by those working in the public sector

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

None of the above

Retirement

Voluntary work / unpaid internships

Starting my own business

Self-employment

A job in the voluntary and community sector

A job in the private sector

Another job in the public sector


3.25 When surveyed, most expect to secure approximately the same salary, hours, benefits package, work flexibilities and role and responsibilities in their next job as they have in their current job. Ideally for some interviewees, a future job would also offer a sense of “being able to serve the local community”. Some reported that job security would be sought in an ideal job, but there is a realisation that, in all sectors, this is not easy to find.

3.26 Many people under threat of job loss experience a level of ‘denial’ about needing to find another job. They often are reluctant to make a move for a variety of reasons – maybe in the hope that something will come up at the last minute with their employer (public sector).

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3.27 Linked to the existing evidence, there is also a mis-conception, or people under-estimate, the degree of skill they have that is transferable: many have been used to working in income-driven environments; managing tight resources; communicating with a wide range of people; dealing with constant change and uncertainty:

“People need to realise that their skills are valuable, they just need to present them differently”

3.28 Some of those interviewed said that coaching had helped them realise what they had to offer and also what they needed to change in order to move on to a new job.

Employment support

3.29 Those close to employees report that confidence and morale is at rock bottom:

“The constant ‘drip-drip’ from government that public sector workers are wasters and in-efficient doesn’t help to get peoples’ morale up at a time when they need to be positive as possible – they think the cards are stacked against them, especially older workers”

3.30 Unions offer support and Union Learn is effective at galvanising partner support (such as money advice, debt, resilience work, Citizens Advice) but their resources are limited and their role as protector of jobs and terms and conditions can put them in a difficult position:

“Union Learn do offer support but it’s a drop in the ocean compared to what is really needed particularly in areas of high social deprivation and high unemployment”

3.31 One HR manager reported that stress levels were on the increase and felt this was linked to the constant threat of redundancy but also low morale linked to negative messages about public sector workers

“The impact of being vilified is that the confidence of ex public sector workers in the job market is very low”

3.32 Most survey respondents (74%) are not receiving any support or training regarding their future career plans or job prospects – those that are mostly get this support from their employer. Employers are offering support including time off to meet employers or have interviews and time off to attend training and re-training. However, some HR staff have admitted to being under-informed themselves about what support is available, where to go for help and advice. One HR manager said “I wouldn’t know where to go if it was me; all the support mechanisms have changed since I last looked for a job”. Staff also felt that HR departments were under huge pressure too:

“HR staff are also at risk now, so there’s even less support available to help us move on.”

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3.33 Most (80%) think they would benefit from support or training regarding their future career plans or job prospects. Respondents rated a number of different kinds of support as potentially useful, which do not differ hugely from that available more widely for unemployed people: employability skills development; information, advice and guidance; accredited training and qualifications; and networking opportunities.

3.34 Interestingly, 62% of respondents would be willing to pay out of their own pockets for training or career development and some of those we interviewed said they ‘went private’ for support and found it helpful.

3.35 A number of those interviewed highlighted the benefits of paying for executive coaching or career coaching, but noted that this can be very expensive.

“I’ve heard very good things about executive coaching, but in my organisation this was only offered to senior managers.”

“I had one to one support from a coach. The benefits were great.”

“I had just one session with a coach used by senior directors. It was a tough, challenging session that gave me a reality check and highlighted things I needed to know.”

“A colleague ‘went private’ and paid to see a job counsellor. It was very useful and a good way to identify the skills you have and where you want to go next.”

3.36 One respondent, who was working in the public sector but has now moved to the private sector, recommended that anyone looking to do the same would benefit from training around private sector business models prior to moving.

3.37 Colleges are often among the first port of call for those looking to re-train. The range of services on offer is wide-ranging, from employability and job advice, to training. Much of this can be accessed and packaged in to support for people who are being made redundant as well as those who are unemployed.

3.38 Colleges report a lack of co-ordination of information, which has meant opportunities to provide support in some areas has been missed:

“There would have been ways to draw down funding to support people but no co-ordinated approach was taken.”

3.39 Most are aware of Jobcentre Plus (JCP), but don’t feel it is somewhere they would go for support. The services available via JCP are not widely known about in this group, for example the help available via JCP rapid response service.

3.40 There were no examples given from agencies or otherwise of how public agencies and providers had taken a co-ordinated approach to supporting public sector redundancies, as is the case when business announce large scale redundancy. It was pointed out that agencies know how to respond in these situations, but that it was not happening in the case of public sector job losses.

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3.41 There is a roughly even split between respondents who think they know what jobs are available in the region and what occupations and industries will create jobs in coming years, and those who don’t. Most respondents say that they don’t know what support is available for people regarding future career plans:

“I’ve heard about the National Careers Service but I expect they provide the kind of advice we had in school. I wouldn’t go to Jobcentre Plus because they don’t help people like me.”

3.42 Most people stated that they would benefit from support to identify suitable career goals. Interviewees would also like information on training they might need to undertake to reach their goals:

“I probably need to do some training, but I don’t know what I need to do and I don’t know what it might cost me.”

“I’d like to sit down with someone, go through my CV, get advice on transferable skills and identify some job goals. I need someone to say to me, ’Have you thought about this or that option?’”

“I’d like to speak to someone in the same boat – someone that’s been through this and has come out the other end – a mentor that understands and can help me work out my next steps.”

Respondents’ views on the private sector and the regional economy

3.43 Most respondents think that there is a real cultural difference between public and private sector workplaces. However, respondents think that they know what private sector employers are looking for and how best to present their own skills and experience to employers in the private sector, for example on CVs and in interviews.

3.44 For those that had worked in the public sector for many years, there was a recognition that commercial experience was lacking and that they may not ‘speak the same language’ as those hiring in the private sector.

“Public sector workers need advice on selling yourself and advice on how to use the right language.”

“Support is needed to help people understand what’s expected in the private sector and also how to find openings in the private sector.”

3.45 One respondent pointed out that, in order for public sector workers to move on, many don’t just need more information about jobs and the labour market. Instead, they need support to make the psychological shift: “People need to understand that the world won’t end – the private sector can look after you but in a different way. There is life beyond your current role; you just need to be confident enough to take the risk.”

Private sector employer views: Existing evidence

3.46 There appear to be widespread concerns from private sector employers about recruiting ex-public sector workers. A report by the British Chambers of

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Commerce5 found that over 80% of businesses were not confident in employing public sector workers. Further to this, the report stated that only 19.8% of employers were confident in recruiting ex-public sector staff, and smaller companies were least confident in recruiting from the public sector.

3.47 The findings of the report are supported by a survey by the Chartered Institute of Management Accountants6 which found that 74% of mid-sized businesses had no plans to hire ex-public sector workers in the coming year and 59% of small and medium enterprises (SMEs) do not anticipate a rise in recruitment levels during the first quarter of 2011.

3.48 Only 11% of businesses surveyed said that they expected to employ more workers from the public sector over the next 12 months.

3.49 Further evidence suggests that private sector employers have concerns about the transferability of skills and experience from the public sector. The Hays Career Outlook survey7 showed that 56% of employers in the private sector place importance on candidates having previous private sector experience. In addition, 15% of private sector employers say that experience in commercial work is an essential competence, and 51% stated that a lack of direct experience would prevent them from hiring someone from the public sector.

3.50 Although there is some evidence of growth in the private sector, there are concerns from some that this will not offset public sector cuts. In a survey of 500 private sector employers by Barclays Corporate and the Financial Times, half of those surveyed stated that they planned to create new jobs; however, three quarters did not believe they could combat public sector job losses.

3.51 The survey also suggested that private sector companies were wary of employing from the public sector. Over half (52%)of employers surveyed said they did not think public sector workers would have the right skills for their company and 57% stated that they were not interested in hiring former public sector employees.

3.52 Further research conducted recently by Hays and the London Chambers of Commerce and Industry (LCCI)8 indicates that the perception of public sector workers is likely to be an issue for those making the transition to the private sector. The survey conducted recently found:

88% of employers in the private sector said they were unlikely to take on more candidates from the public sector in light of public spending cuts; and

there was a view of private sector workers as “institutionalised”, used to “an easy life” and “in it for the benefits”.

5 British Chambers of Commerce Skills for Business: More to Learn? 20116 Chartered Institute of Management Accountant Mid-sized business confidence monitor survey

20107 Hays Recruiting Experts Career Outlook survey 20118 Hays and London Chamber of Commerce and Industry The Challenges of Transition: From Public to Private 2011

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3.53 Research shows these prejudices disappear when people from each sector gain exposure to the opposite sector. It is clear from this and other research that a lack of skills isn’t necessarily the problem, rather there is a perceived mismatch between the expectations of employees and their prospective employers.

3.54 The research concludes that while there are obstacles arising from perceived differences between public sector and private sector workplaces, these could be easily remedied and a great deal depends on all parties overcoming certain misconceptions.

3.55 Ensuring that both the public and private sectors are able to identify transferable skills and helping public sector staff to improve their self-marketing and develop their business awareness will contribute to a successful transition of skills from the public to the private sector.

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Private sector employer views: Existing evidence

3.56 In total the survey gathered 141 responses from private or voluntary and community sector (VCS) organisations, 18 of who agreed to be contacted for the qualitative research.

Organisational profile

3.57 Responding organisations cover a wide range of organisational sizes – some respondents employ one to five staff, others employ over 1,000. Over half of respondents operate in service industries:

Figure 4 Private and VCS employers’ primary industry

0% 10% 20% 30% 40% 50% 60%

Agriculture and fishing

Banking, finance and insurance

Distribution, hotels and restaurants

Transport and communications

Energy and water

Public administration, education and health

Construction

Other service industries

Source: Public sector workers in the North West – employer survey, Inclusion (2011-12)

3.58 Most responding organisations recruit between one and five new staff per year.

3.59 Almost all (95%) respondents report that their organisation regularly invests in staff training and development.

Approach to hiring staff

3.60 The businesses we spoke to and surveyed use a wide variety of methods to publicise and advertise vacancies:

Figure 5 Public and VCS employers’ methods for publicising and advertising vacancies

0% 10% 20% 30% 40% 50% 60% 70% 80%

Via trade associationsVia welfare to work providers

Via recruitment agenciesOn other websites and online job sites

Via word of mouthIn newspapers and magazines

Via Jobcentre PlusOn our own website

Internally (within the organisation)


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3.61 When interviewed, most people stated they were using internet job search sites to look for vacancies. However, there is competition when applying for roles via the open market:

“There are lots of us in the same boat and it’s difficult to get to interview stage.”

3.62 Other methods (including word of mouth), however, account for a large proportion of methods used to hire people. People in the public sector may not have been exposed to this for some time, if ever. Knowing how to network and gain exposure in the labour market is key. Some simple tips on how to use social media, on-line professional sites that link people and businesses up, and networking skills can be very useful:

“The traditional methods of applying for jobs doesn’t work in the private sector, it’s not what you know but who you know”

3.63 Organisations also use a broad range of methods to select candidates:

Figure 6 Public and VCS employers’ methods for selecting candidates for recruitment

0% 20% 40% 60% 80% 100%

Online tests

Assessment centres

Informal meetings

Face-to-face testing, exercises or presentations

Review of application forms

Review of CVs and/or covering letters

Formal interviews


3.64 More than half of respondents report that appropriate attitude and working culture, and interest in and enthusiasm for the role, are essential qualities in prospective staff. Other skills and qualities that employers report as being important are technical skills, soft skills, people skills and experience in previous jobs:

“Background in the private sector isn’t necessarily important – I just need the right person for the job. For me this means people that are confident decision makers.”

Experience of hiring from the public sector

3.65 Over the past two years, only 47% of respondents have received applications from people who were working or had most recently worked in the public sector. Respondents report that public sector candidates performed better than others in terms of relevant training and qualifications, but worse than others in terms of commercial awareness. On other skills and qualities they performed the same as other candidates. Respondents report that public sector candidates have been equally as successful as other candidates over the past two years.

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3.66 The most common skill or quality missing when public sector workers apply for jobs with other employers is commercial awareness. For instance:

“Staff tend to come in with the skills I require. Ex-public sector staff possibly lack sales skills.”

Figure 7 Skills and qualities that public sector workers lack when applying for jobs with private and VCS employers

0% 10% 20% 30% 40% 50% 60% 70%

Academic qualificationsAccredited training and qualifications

Technical skills and abilityKnowledge of the role and organisation

Soft skills and/or people skillsInterest and enthusiasm

Don't lack anythingRelevant experience

Appropriate attitude and working cultureCommercial awareness


3.67 Over the past two years, only 19% of respondents have hired staff that were working or had most recently worked in the public sector. All these employers rate hiring someone from the public sector as a positive experience. A few report that public sector workers had training or development needs that could have been addressed prior to joining the organisation – either technical (e.g. fork-lift truck licence) or soft skills (e.g. knowledge of the commercial environment that they are entering).

3.68 All employers report that staff joining their organisations from the public sector have performed in line with how they would expect a public sector worker to perform. On the basis of their experience hiring from the public sector, all these employers would be quite likely or very likely to do so again in the future.

Perceptions of public sector workers

3.69 In general, employers agree that there is a stereotype of a public sector worker, and many employers think that public sector workers struggle to adapt to the culture of other workplaces.

3.70 Those in the public sector were concerned about ‘negative press’ that emanates from the Government’s message that there is inefficiency in the public sector. Whether inadvertently or not, the message people think that potential employers will get is:

“If they got rid (of us) we must not be the best”

“The irony is that the demonising of ‘work-shy’ public sector workers is having a negative effect on the attitude of private sector employers…a bit like the govt shooting itself in the foot. The message is: all these people don’t do anything of any use”

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3.71 However, reassuringly, employers are reporting positive experiences:

“It’s an unfortunate stereotype as I’ve found ex-public sector workers to be diligent with good attention to detail, especially useful to me in compliance and audit roles. Those in sales roles tend to have a private sector background”

3.72 Most employers don’t think that public sector workers have unreasonable salary expectations when looking for jobs in other sectors; however, a larger proportion think that public sector workers have unreasonable expectations around hours and flexibility:

“Some don’t look beyond the job description and lack flexibility, but it is a generalisation and it does depend on the individual.

3.73 In general, employers don’t think that people coming from the public sector will form a greater part of their staff in coming years. A minority of employers would be willing to review recruitment practices, or provide specific training and development, in order to attract more workers from the public sector. Very few would be willing to review salaries or work hours and flexibilities for this purpose.

Transition support for public sector workers 3.74 There is evidence to suggest that a range of support available to public sector

worker seeking to retrain. Support is primarily being provided by LEPS, and is set out as part of wider plans for promoting growth. Some examples of support provision are provided below.

The South-West Regional Employment and Skills Partnership (RESP) is working in conjunction with Business in the Community to develop ‘Talent Retention’9, proposals include a rapid- match system (matching individual skill sets to work and training opportunities) and working with private sector employers to review recruitment and development policies.

The West of England LEP has worked with Hays to develop the Change Help Opportunities Information Career Employment Skills (CHOICES) guide for public sector workers seeking employment10. The guide gives information on how public sector workers can retain, search for, and find new employment. It also focuses on how to transition into the private sector.

In their Employment and Skills strategy11, Leeds City Region Employment and Skills Board set out their plans to boost employment in key sectors and increase investment in skills. This includes working with public sector employers increase investment in training.

9 South-West Regional Employment and Skills Partnership Alliance Talent Retention 201110 West of England Local Enterprise Partnership Change Help Opportunities Information Career Employment Skills (CHOICES): A guide for people leaving the public sector. 11 Leeds City Region Employment and Skills Board Leeds city region: intelligence driving growth. 2010

20

The North Eastern Local Enterprise Partnership has also set out plans to support enterprise and private sector growth12. They also outline plans to ‘support programmes that deliver the effective transition of people, skills and expertise from the public sector to the private sector, and which include initiatives that offer self-employment and enterprise skills’.

3.75 The Hays and LCCI report13 sets out the main challenges for public sector workers moving into the private sector and highlights the importance of government support to aid transition. The report sets out six key steps to successful transition. Whilst not necessarily endorsed by this report or supported in full by the research conducted in the north west, they are interesting to highlight.

Encourage better understanding. Coaching, mentoring and peer-support schemes for public sector workers prior to, during and after transition to the private sector should be encouraged. These would increase the retention of new employees and also enable the private sector to identify the skills available in the public sector.

Incentivise the private sector. The government should subsidise recruitment and training costs for private sector employers who hire public sector employees. One option would be to adapt the Redundancy Action Scheme in Wales, which gives employers a contribution to salaries and training if they hire someone who has been made redundant.

Identify regional skills gaps. LEPs and recruiters should work with Trade Associations and professional membership bodies to identify the skills shortages that will be created by future job vacancies and look at how former public employees can fill those gaps.

Review on-boarding procedures. Private sector employers should review their onboarding (induction programmes for new employees) in anticipation of recruiting people from the public sector to ensure successful transitions.

Enhance existing support programmes. Public sector employers should be more proactive in their support for workers facing the prospect of redundancy, with practical job seeking and career planning programmes specifically designed to equip them for the private sector.

Promote self-reliance and resourcefulness. Public sector workers should be encouraged to work with recruiting experts who understand both the private and public sector and can provide free advice on CVs, job applications and interviews.

12 North Eastern Local Enterprise Partnership A proposal to the Secretaries of State for Business, Innovation and Skills and Communities and Local Government. 201013 Hays and London Chamber of Commerce and Industry The Challenges of Transition: From Public to Private 2011

21

4 KEY MESSAGES FROM THE RESEARCH

4.1 What messages do we have for public sector employers and employees; providers and stakeholders about what more they can / should do to support the transition?

For public sector employers Take steps to ensure potentially redundant workers have the opportunity

to improve their understanding of the current and future labour market; have a realistic view and do not ‘hold out false hope’ of getting another job, somewhere else, just like the one they lost. Access to information about the local labour market, growth sectors and training that will assist them to gain a new job in the future is key.

A more joined up approach, working closely with providers and partners, to identify opportunities to link people to support and jobs that are coming in to the area. Colleges and training providers need to be better linked-in to connect people to training and employers for example.

Moving forward, a more joined up information, advice and guidance ‘offer’ could generate more voluntary redundancies – to encourage people to make an active transition as opposed to the need for compulsory redundancies.

Develop effective methods to signpost people to the right places for information, advice and guidance – people need to be linked up with organisations quickly who are equipped to provide information, advice and guidance in their area. Make use of Union Learn who can signpost to others (such as Community Learning Champions) as well as provide access to wide sources of advice and support.

Provide support in diverse ways:

o people moving in to self- employment or starting their own business may benefit more by being able to make plans whilst working their notice – for example using the desk / phone / email can assist greatly;

o provide time off for coaching, mentoring, job search, career guidance, confidence building, and volunteering, as well as recognised training; and

o encourage agencies and businesses in to the workplace to talk to groups of staff – for example how to set up your own business. Forge links with business to encourage work trials, secondments and work experience.

22

Union Learn (North West) have strategic protocols in place, for example with the Careers Service and Community Advocates (to support non-unionised workplaces). Employers should automatically engage in a timely manner (as soon as workers are deemed at risk) with Union Learn to ensure support is available in every case of redundancy.

Recognise that stress related absences may increase especially as the threat of redundancy lingers over people for months or even years. This takes its toll on individuals and communities. Explore ways to support people to manage their stress and provide workplace support. Consider signing up to the Health and Wellbeing Charter (championed in the NW, see http://www.wellbeingcharter.org.uk/).

For providers Good quality IAG is a given - communicating its existence to people who

are currently in work but at risk is vital. Better communication of the support that is already available is key. This includes, for example, the Careers Service as some still felt this was aimed at young people only as well as the support on offer for redundant workers who can access appropriate no cost skills training via Jobcentre Plus.

Capitalise on the flexibilities in the adult skills budget including the use of the Innovation Code where providers will now be able to use the six learning aims that make up the Code to respond quickly and innovatively to gaps in local employment and skills needs.

Develop new support packages by utilising adult skills funding for this agenda. Not only that, consider adding to this by exploring the potential to charge a fee based on the fact some 62% of respondents are willing to pay out of their own pockets for training or career development.

Recognise that the priority for people is to get a job not get a skill necessarily: one is a means to the other when people are facing redundancy. Use LMI data and intelligence to make informed curriculum choices that are designed to train people for job growth and sectors that are hiring. People are not well served by training that is not in demand by businesses in the north-west and this is especially the case in times of high unemployment.

Offer innovative ways of supporting people to make the transition through, for example, coaching and mentoring.

Whilst employability skills are generic there is a demand for some focussed support: people want information, advice and guidance; support with CVs; advice on training that will lead to jobs; to learn new skills such as using social media for networking; support with gaining confidence and dealing with change.

Support with plugging skills gaps such as commercial awareness and sales skills training; setting up a business, self-employment; and

23

http://www.wellbeingcharter.org.uk/

increasingly this will move towards setting up social enterprises, co-operatives and mutual; spin-outs from the public sector.

For private sector employers Whist we are not suggesting private sector employers need to change

their practices, there may be merit in considering adapting recruitment processes. For example: be prepared to ‘try people out’ perhaps as interims working on specific projects or using their transferable skills; use working interviews or taster days to confirm their ‘fit’ to the business. In this way employers can test out commercial awareness and sales skills for example.

Don’t be overly concerned about whether the candidate is from the public sector or not. Private sector employers who have focused on what the candidate has done as opposed to where they have worked report that hiring them was a positive experience that they would be happy to repeat.

The economy will start to grow again and public sector workers will continue to be made redundant: they are a source of huge potential and are often highly skilled and experienced. They can bring new ideas and working practices and they are used to change.

Public sector workers have demonstrated their ability to operate in commercial markets in the past and they continue to do so. For example, the creation of Housing Associations as a result of housing stock transfer (most employees running these enterprises are ex-public sector workers) and the creation of ‘spin-out’ social enterprises and mutuals today.

Explore whether new working arrangements adapted from the public sector could, in fact, help the business. This may be an opportunity to introduce more flexible working and encourage diversity in to the business.

Communicate what business growth looks like for the future to providers who can attract people to re-train for the longer term.

For stakeholders Provide leadership for partners, providers and public and private sector

employers and encourage them to work collaboratively.

Make information as accessible as possible to public sector workers (as well as all unemployed groups) and encourage public sector employers to communicate this to their workforce;

Better understand and communicate labour market information by sharing data in a useful and user-friendly way – most people and providers do not have a clear picture on job losses; job growth; skills gaps;

City Deals present huge ‘game-changing’ opportunities in the North West. Cities such as Liverpool and Manchester can play a bigger role in linking

24

business growth to local people; plugging skills gaps. For example the Greater Manchester deal will create and protect 6,000 jobs as the city signs an innovative deal with central government giving it new powers to create jobs and train local people with the right skills to fill them.

Ensure strategic plans take account of the shift of jobs from public to private over the coming years. This will affect everything from what careers advice is delivered in schools to how adults are supported back to work following lengthy periods of unemployment. The skills base needs to prepare people for the jobs that will exist in the future.

Promote positive messages that encourage private employers to hire ex public sector workers to redress some of the negative perceptions. Evidence shows that, once employers hire ex public sector workers, they have a positive experience on the whole.

Consider ways in which people can get involved in new sectors, for example the voluntary and community sector: the skills people bring to the sector would be useful to help capacity building with social enterprises for example who are looking to deliver public sector contracts of the future.

Explore how businesses could benefit from adopting good working practice from the public sector to encourage flexible working, family friendly policies, encourage diversity.

Learn from the best practice that has been tried and tested in coping with large scale private sector redundancies: efforts to co-ordinate partners when large numbers of job losses are announced would be equally useful to public sector workers.

And last but not least….for employees at risk of redundancy There is a need to become more familiar with the types of sectors and

jobs that are a realistic option for the future. Improved understanding of how the structural change in the very nature of the labour market affects the type of jobs set to go as well as those likely to be created in the future. Consider asking for time off not only for job interviews, but also to try out new workplaces, especially where there is a long lead in time before jobs are terminated. This could be for interim work or secondments, volunteering and mentoring.

The job search market has changed rapidly over recent years. All job-seekers need to be open to new ways of getting a job and that the internet is not a replacement for the jobs page in newspapers. Networking and social media are examples of new ways of communicating your skills to new audiences and employers.

There are relevant skills that transfer from the public to private sector. People need to be skilled in talking about their skills and experience in a language that applies to the private sector. For example ‘commercial awareness skills’ are used in business planning cycles,

25

income generation, creating efficiencies, management of multi-million pound budgets, critical decision making, cost control and best-value initiatives; people and team management; management of complex, highly political stakeholder relationships.

When considering paying for support people need advice on what they are buying is not something that is already available for free: much of the mainstream offer is relevant and very useful, for example the Careers Service, Union Learn, Jobcentre Plus and FE training providers and colleges.

Whilst working cultures differ, there are advantages of working in the private sector that are not usually available in the public sector, for example bonus payments. A shift in expectations in some aspects however may be necessary: especially around types of jobs, hours and flexibility.

Dealing with change can be very stressful for employees especially now when there is a constant and long term threat of job loss that can span years. Peoples’ health and wellbeing is an issue: seeking out support from Unions and other staff bodies is important to prevent lasting damage from stress and ill-health.

26

5.1% 6.1% 5.6%5.1%

14.1% 9.6%4.9%

21.4%

13.1%

84.9%

58.4%71.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MALE FEMALE TOTAL

Public administration and defence, etc. Education

Health and social work Private Sector

45.6%

26.8%19.0%

59.7%

54.4%

73.2%81.0%

40.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Publicadministration and

defence, etc.

Education Health and socialwork

Private Sector

MALE FEMALE

PART B – ECONOMIC OUTLOOK4.2 This section of the report deals in detail with the changes in public sector

employment by LEP area, the NW labour market (now and outlook), and employer skill requirements.

5 PUBLIC SECTOR CHANGESCurrent employment in the public sector5.1 The NW depends to a significant extent on the public sector for employment.

This is distributed between sectors:

public administration and defence – 167,800 (6% of total employment);

education – 287,300 (10% of total employment); and

health and social work – 393,400 (13% of total employment).

5.2 However some of the LEP areas are more dependant than others:

Cheshire and Warrington – 23% public sector employment;

Cumbria – 25% public sector employment;

Greater Manchester (GM) – 27% public sector employment;

Lancashire – 31% public sector employment; and

Liverpool city region (LCR) – 35% public sector employment.

5.3 The public sector also employs a greater share of women than men, and as a consequence constitutes a far greater proportion of total employment for women, as the two charts below show.

Figure 8 NW public/private sector employment by gender

Source: Annual Population Survey, ONS (2010)

27

5.4 The NW has a large presence of government departments, many of which face severe budget constraints. In total the civil service employs 61,620 people in the region distributed as shown in figure 9 (departments making up less than 1% of the total civil service employment has been excluded).

5.5 In addition, in the NW there are 295,000 local government employees, 216,000 NHS employees and 130,000 teaching staff (including part time workers).

Figure 9 NW civil service employment by department and % of total NW civil service – 2011

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

5,000

10,000

15,000

20,000

25,000

Work and Pensions

HM Revenue and Customs

Justice Home Office Defence Transport Attorney General's

Departments

% S

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011

Source: Civil Service Statistics, 2011 – Office for National Statistics

Impact of job losses by sector5.6 Experian have forecast the impact of the public sector job losses on the NW,

and calculate that the region will lose 76,000 local government and civil service jobs - 3,000 more than any other region.14 This constitutes 60,000 local Government jobs, 3,000 HMT and 6,000 Home Office.15 In terms of sectoral split, this breaks down as follows:

public administration and defence would lose about £1bn in GVA by 2015 or about 22% of the sector’s output in the NW. This amounts to almost 35,000 fewer jobs by 2015 or 23% of the sector’s total FTE jobs in the region. It is the sector with the highest proportion of direct job losses – 25% of total job losses;

education would lose about £0.4bn in GVA by 2015 or about 6% of the sector’s GVA. This amounts to almost 13,500 jobs by 2015 or 6% of the

14 Adam Crockett and Nicola Christie, Public Sector in the North West North West Regional Development Agency 201115 Experian Public Sector in the North West Experian 2011

28

sector’s total FTE jobs, accounting for about 10% of all job losses as a result of direct effect of public sector reductions; and

health would lose about £0.3bn in GVA by 2015 or about 3% of the sector’s GVA. This amounts to almost 11,900 jobs by 2015 or 3% of the sector’s total FTE jobs, accounting for around 8% of all job losses in the public sector.

LEP area impact16

5.7 Every area of the region is affected by public sector job losses. The breakdown of impacts by NW LEP area is set out below.

LCR is forecast to be the most affected part of the North West, losing around 3% of jobs. Liverpool is expected to lose 6,000 jobs, with over 3,000 loses forecast in Wirral and Sefton. All districts in Merseyside are expected to be more affected than the NW average.

Lancashire is forecast to be significantly affected losing 2.6% of jobs. Preston would lose the most jobs 3,600, followed by Blackburn 2,000 and Blackpool 1,700.

Cumbria is forecast to be the LEP area least affected after Cheshire losing just under 2.5% of jobs. There is very little residence based effect, with losses staying within the districts.

GM will be affected on a similar level to the NW average, losing around 2.5% of jobs. Largest losses are expected to be in Manchester (6,700), with 3,000 losses forecast in both Wigan and Salford, and over 2,000 in every other district except Bury.

Cheshire and Warrington is expected to be the least affected part of the NW, losing 2% of jobs, with just over 3,000 losses in each Cheshire district and 2,500 in Warrington. Jobs lost are expected to be higher level, with a surprisingly small residence based effect.

16 Crockett and Christie, Public Sector in the North West

29

6 THE NORTH WEST LABOUR MARKET IN 2010

6.1 Employment opportunity is distributed unevenly across the NW, with high concentrations around GM, Lancashire and the LCR as figure 10 below shows.

GM employs 39% of the region’s workforce and leads all other LEP areas in every sector apart from agriculture, with particular concentrations of Business & administration, Professional scientific & technical, Wholesale, Financial & insurance, Property and Information & communication sectors – accounting for more than 40% of the NW’s total employment in each.

Lancashire employs 20% of the region’s workforce and has a high proportion of jobs in Manufacturing, Motor trades, Wholesale, Construction, Arts and entertainment, Wholesale, Retail, and Accommodation & food services sectors.

LCR employs 19% of the region’s workforce and has its highest levels of employment in Transport & storage, Retail and Arts & entertainment sectors.

Cheshire and Warrington employs 14% of the region’s workforce and has particular concentrations in Motor Trades, Professional & scientific, Financial & insurance and Information & communication sectors.

Cumbria has the lowest number of jobs, making up 7% of the region’s total. However the area does contribute significant employment opportunities in certain sectors: 11% toward Manufacturing and 10% towards both Motor trades and Accommodation & food services.

Figure 10 Employment by industry and LEP as a proportion of NW, 2010

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

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Acc

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Cheshire and Warrington Cumbria Greater Manchester Lancashire Liverpool City Region

Source: Business Register and Employment Survey (2010)

30

6.2 The NW employs almost 3m people across all sectors, but has endured some dramatic changes in recent years, summarised in figure 11 below. The 5 largest (private) sectors (as of 2010) were:

financial & professional services occupations employed 457,000 people and the sector has grown by 105,000 between 2000 and 2010;

retail occupations employed 330,000 people, but the sector has shrunk by 9,000 people in the ten years since 2000;

manufacturing is still a large employer in the NW with 328,000 in employment, despite a fall of 204,000 in the ten years to 2010;

construction occupations employed 243,000 people and the sector has grown by 11,000 in the ten years to 2010; and

hospitality & tourism occupations employed 237,000 in 2010, and the sector has grown by 32,000 in the ten years to 2010.

Figure 11 Employment in 2010 and growth 2000-10 by sector

-300 -200 -100 0 100 200 300 400 500 600

EnergyEnvironmental Technology

AviationSport

AutomotiveICT Digital and Communications

LogisticsCreative / Digital / New Media

Public SectorHospitality and Tourism

ConstructionEducation

ManufacturingRetail

Financial & Professional ServicesLife Sciences (inc. health etc.)

2000-2010 2010

Source: Oxford Economics (2010)

6.3 There has been considerable change in the previous ten years – a firm indicator of trends in the years ahead. The largest (private sector) changes in terms of employment numbers were increases in: financial & professional services – gaining 106,000 jobs (+31.2%);

hospitality and tourism – gaining 32,000 jobs (+15.8%); and

sport – gaining 13,200 jobs (+31.9%).

6.4 As well as marked declines in: manufacturing – losing 204,000 jobs (-38%); and

automotive – losing 19,000 jobs (-20.7%).

31

Energy: 0.2% (+23.1%)

Life Sciences (inc. health etc.): 16.3% (+8.0%)

Environmental Technology: 0.2% (-15.0%)

Aviation: 0.7% (-2.5%)

Sport: 1.8% (+14.3%)

Automotive: 2.4% (-18.7%)ICT Digital and Communications: 2.9% (-

8.5%)

Logistics: 3.9% (-1.7%)

Creative / Digital / New Media: 4.4% (-7.6%)

Public Sector: 5.9% (-4.2%)

Hospitality and Tourism: 7.9% (-0.6%)

Construction: 8.1% (-4.0%)

Education: 8.8% (+6.7%)

Manufacturing: 10.9% (-20.5%)

Retail: 11.1% (-7.0%)

Financial & Professional Services: 14.6% (+7.8%)

High Growth Growth Decline High Decline(>10%, 05-10) (<10%, 05-10) (<-10%, 05-10) (>-10%, 05-10)

32Source: Oxford Economics, (2010)

Occupations6.5 There have also been some substantial changes in the types of occupation held

in the NW since 2002, summarised in figure 12 below. The largest occupations in 2010 were:

managers, directors and senior officials (479,000);

associate professional and technical occupations (435,000);

elementary occupations (387,000);

professional occupations (368,000); and

administrative and secretarial occupations (340,000).

6.6 The changes that have occurred since 2002 include significant rises in:

professional occupations (+71,000);

associate Professional and Technical Occupations (+57,000); and

caring, Leisure and Other Service Occupations (+50,000).

6.7 And substantial declines in:

process, plant and machine operatives (-72,000); and

skilled Trades Occupations (-53,000).

Figure 12 Employment in 2010 and growth 2000-10 by occupation

-100 0 100 200 300 400 500

Process, Plant and Machine Operatives

Caring, Leisure and Other Service

Sales and Customer Service

Skilled Trades

Administrative and Secretarial

Professional

Elementary

Associate Professional and Technical

Managers, Directors and Senior Officials

2010 2002-10


33

Skills6.8 There have been notable changes in the skills composition of the NW’s

workforce in the six years to 2010 also. In particular:

there have been sharp rises in those qualified to the equivalent of NVQ4 and above, with an increase of 297,000 from 975,000 to 1,271,000 (a 7% increase) – now making up more than 29% of employees;

there have also been increases in the number of employees with NVQ skill levels 1, 2, and 3; and

there was a significant decline in both the number and proportion employees holding no NVQ level skills, falling by 220,000 (29%).

Figure 13 Skills of NW employees 2004-10

-400,000 -200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

NVQ0

NVQ1

NVQ2

NVQ3

NVQ4

2010 2004-10

Figure 14 Skills of NW employees 2004-10 (%)

18.0%12.1%

17.8%

17.9%

21.9%

21.9%

19.2%

19.5%

23.2%28.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2010

NVQ0 NVQ1 NVQ2 NVQ3 NVQ4

34


SME focus6.9 Small and medium enterprises (SMEs) make up a substantial proportion of NW

employment. In 2008 44% of people were employed in a business with less than 50 employees, although larger businesses have increased their share marginally over the decade to 2008.

Figure 15 Employee share by business size

21% 20%

26% 24%

23% 24%

30% 32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 2008

1-10 employees 11-49 employees

50-199 employees 200 or more employees


6.10 In the ten years to 2008 there have also been significant increases in private sector employment amongst smaller employers in different sectors, summarised in figure 16 below:

businesses with 1-10 employees have seen substantial increases in employment numbers, notably in banking, finance & insurance (increasing by 35,000 employees) and construction (increasing by 11,000 employees).

businesses with 11-49 employees have increased employment numbers also in banking, finance & insurance (seeing a 14,000 increase) and, to a lesser extent, in the other services category (increasing by 10,000 employees); and

businesses with 50-199 employees have increased their employment in banking, finance & insurance (by 33,000) and in other services and construction (with increases of 11,000 and 5,000 respectively).

35

Figure 16 Growth in employees (1998-2008) by business size and sector

-150,000

-100,000

-50,000

0

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150,000

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1-10 employees 11-49 employees

50-199 employees 200 or more employees


36

7 THE NORTH WEST LABOUR MARKET OUTLOOK

Employment growth by location7.1 Growth in employment will not be distributed evenly across the NW over the

next decade. GM already employs significantly more than the other LEP areas and will by 2020 employ an even greater share of total employment in the region – largely but not exclusively due to strong growth in financial & business services. There will also be growth in the other LEP areas however, this is expected to be driven by growth in financial & business services and also in distribution & hotels.

7.2 Liverpool City Region

The strongest growth is expected to be seen in financial & business services, currently 17% of LCR’s employment; it is forecast to grow by 23% and will employ 24,500 more people by 2020, with 131,600 employed in the sector in total.

The distribution & hotels sector is forecast to increase in employment by 9% to 2020 and will employ 12,300 more people by this time.

Figure 17 Merseyside LEP employment growth by sector (000s)

020406080

100

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2000 2005 2010 2015 2020


7.3 Cheshire

The strongest growth in Cheshire is expected to be seen in the financial & business services sector, which has already grown by 51% since 2000 to account for 23% of the area’s employment at 120,800 jobs. This is forecast

37

to grow by another 23% and by 2020 will employ 148,200 – 27,400 more than in 2010.

Distribution & hotels is also a strong sector in Cheshire, currently the largest, employing 126,900 – 24% of the Cheshire total. This sector is forecast to grow by 11% to 2020, and will employ 140,500 people – 13,600 more than currently.

Figure 18 Cheshire employment growth by sector (000s)

0

20

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120

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7.4 Lancashire

Distribution & hotels is forecast to be the largest sector in Lancashire by 2020. Currently the sector employs 123,700 (23% of Lancashire’s total) it is expected to grow by 10% to 2020 and will employ 135,600 people – 11,900 more than in 2010.

Financial & business services will be the strongest growing sector to 2020: having grown by 21% since 2000, the sector is forecast to grow by another 25% and employ 93,200 by 2020 - 18,300 more than in 2010.

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Figure 19 Lancashire employment growth by sector (000s)

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7.5 Cumbria

Cumbria’s largest sector in 2010 was distribution & hotels – accounting for 20% of total employment. This is expected to grow by 7% to 2020 to employ 72,400 people – 4,600 more than in 2010.

Financial & business services is expected to also see strong growth, growing by 18% and employing 32,400, 4,900 more people than in 2010.

Figure 20 Cumbria employment growth by sector (000s)

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7.6 Greater Manchester

Financial & business services will see strong growth in GM, and overtake distribution and hotels by 2015, growing by 84,900 jobs (31%) between 2010 and 2020 and employing 357,400 people by this time.

Distribution & hotels is currently GM’s largest sector, and is also forecast to grow significantly, employing 34,200 (12%) more people in 2020 than in 2010 at 314,000 jobs.

Figure 21 GM employment growth by sector (000s)

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Employment growth by sector7.7 As in the years 2000-2010 some sectors are due to grow faster than others, and

many are likely to shrink significantly. In terms of net requirement (i.e. job opportunities for those currently outside the labour market) between 2010 and 2015:

financial and professional services will require 270,000 employees;

hospitality and tourism will require 124,000 employees;

retail will require 123,000 employees;

construction will require 123,000 employees; and

creative / digital / new media will require 57,000 employees.

7.8 In terms of expansion demand (i.e. net change in employment):

financial and professional services will increase by 50,000 employees;

hospitality and tourism will increase by 14,000 employees;

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retail will increase by 10,000 employees;

sport will increase by 8,000 employees; and

ICT digital and communications will increase by 57,000 employees.

Figure 22 Forecast net requirement and expansion demand by sector 2010-15

-100,000 -50,000 0 50,000 100,000 150,000 200,000 250,000 300,000

Environmental TechnologyEnergy

AviationPublic Sector

AutomotiveSport

ICT Digital and CommunicationsLogistics

ManufacturingCreative / Digital / New Media

EducationConstruction

RetailHospitality and Tourism

Life Sciences (inc. health etc.)Financial & Professional Services

NET REQUIREMENT EXPANSION DEMAND


Employment growth by occupation7.9 There will also be a change in the occupation composition of employment. In

terms of net requirement (i.e. job opportunities for those currently outside the labour market) between 2010 and 2015, there is a forecast requirement for:

301,000 employees in elementary occupations;

209,000 employees in sales and customer service occupations;

145,000 employees working as managers directors and senior officials;

124,000 employees in caring, leisure and other service occupations; and

117,000 employees in skilled trades occupations.

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Figure 23 Forecast net requirement and expansion demand by occupation 2010-15

-50000 0 50000 100000 150000 200000 250000 300000 350000

Administrative and Secretarial Occupations

Process, Plant and Machine Operatives

Professional Occupations

Associate Professional and Technical Occupations

Skilled Trades Occupations

Caring, Leisure and Other Service Occupations

Managers, Directors and Senior Officials

Sales and Customer Service Occupations

Elementary Occupations

NET REQUIREMENT EXPANSION DEMAND


7.10 There will also be changes in expansion demand (i.e. net change in employment) summarised below:

39,000 increase in managers, directors and senior officials;

18,000 increase in professional occupations;

17,000 in associate professional and technical occupations;

15,000 in caring, leisure and other service occupations; and

12,000 in sales and customer service occupations.

Growth in skills requirements7.11 Skills requirements are forecast to increase in level across all occupations, as

figure 24 and figure 25 show, although there are marked differences in net requirement between the occupations during the period 2010-15.

Those with no skills will be most required in elementary occupations, with 72,000 job opportunities estimated for new entrants to the occupation. There will also be significant demand in sales and customer service occupations with 30,000 employment opportunities.

NVQ1 skills will also be in high demand in elementary occupations with 72,000 employment opportunities and in sales and customer service occupations with 28,000 opportunities.

NVQ2 skills will be in quite high demand across most occupations, particularly in elementary occupations (80,000), sales and customer service

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occupations (72,000) and caring, leisure and other service occupations (38,000).

NVQ3 skills will be in high demand across almost all occupations, with requirements even in elementary occupations (56,000) and sales and customer service occupations (56,000), where 39% of employment at this skill level is concentrated. There will also be demand for this skill level in skilled trade occupations (51,000), caring leisure and other service occupations (36,000) and as managers, directors and senior officials (34,000).

NVQ4 skills will also be required at some level across all occupations; however they are particularly concentrated amongst managers, directors and senior officials (64,000) and in the professional (60,000), associate professional and technical occupations (46,000).

Figure 24 Skills net requirement by occupation 2010-15

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Figure 25 Skill net requirements by occupation 2010-15 (% of occupation net requirement)

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7.12 This requirement also differs by sector, and between 2010 and 2015 the requirement is as follows.

Those with no skills will be most required in hospitality and tourism (17,000), retail (16,000), financial & professional services (14,000), and construction (12,000).

NVQ1 skills will also be in high demand in hospitality (26,000), financial & professional services (25,000), retail (18,000), construction (16,000) and manufacturing (7,000).

NVQ2 skills demand will be in financial & professional services (52,000), retail (37,000), hospitality (32,000), construction (24,000) and logistics (12,000).

NVQ3 skills demand will be in financial & professional services (52,000), construction (41,000), retail (32,000), hospitality (31,000) and manufacturing (12,000).

NVQ4 skills demand will be in financial & professional services (117,000), construction (29,000), creative/digital/new media (24,000), ICT digital & communications (20,000) and retail (19,000).

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Figure 26 Skills requirements by sector 2010-15

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Figure 27 Skills requirements by sector 2010-15 (% of sector requirement)

0% 20% 40% 60% 80% 100%

Hospitality and Tourism

Retail

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Financial & Professional Services

Life Sciences

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8 EMPLOYER SKILL REQUIREMENTS BY SECTOR

8.1 Employers are encountering skills shortages and issues across all sectors, and particularly in the growing sectors there is an increasing demand for higher skills, experience, specialist and professional qualifications, as well as a requirement for more management, leadership and supervision skills and soft skills such as team-working and communication.

Business and Financial Services

8.2 The Financial Services Skills Council has identified four business critical skills issues that employers in the sector are facing:

management and leadership (the issue most often cited as the industry’s ‘first priority’);

new entrants, and the need to replace the numbers and expertise of departing staff;

increasing requirement for higher level skills; and

soft skills (in the main ‘work-readiness’ or the lack of it).

8.3 The Council found that where hard to fill vacancies occur, they have a significant impact on businesses in terms of increased costs, meeting customer service standards, quality and innovation. There were also weaknesses in softer core skills such as planning and organising, customer handling, problem solving and team working. Very small firms have higher rates of vacancies, hard to fill vacancies and skill shortages than larger firms and are also less likely than others to train their staff.

8.4 Based on research undertaken in 2008 with employers and employer representative bodies, the following key challenges for the Financial and Professional Services sector were identified:

ensure the successful further development of the regional Financial Services Skills Academy;

ensure a sufficient flow of Young People with relevant Level 3 skills from the Academy, Apprenticeships and full-time FE;

use Apprenticeships to address emerging sectoral needs;

continue to develop new provision to deliver Level 4 skills;

enable more of the region’s university graduates to move into the sector to fill vacancies, with the help of occupational training at Level 3 / 4 and better careers advice and guidance;

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introduce more provision to address the increasing demand for financial advice qualifications at Level 3+ and growing employment in credit control, debt collection and insolvency work: and

continue to develop and grow provision for the Legal sector and Architects, and business coaching training for SMEs.

Retail

8.5 The Skillsmart Retail UK Sector Skills Assessment offers an overview of the skills requirements in the sectors across the country and regionally. Its main insights are as follows.

UK retailing generally employs large numbers of people with low levels of formal qualifications, with 31% of staff having qualifications below the level of 5 A*-C GCSE grades. Despite this, employers feel that their staff are generally proficient.

The main skill gaps are technical and practical skills, customer handling and management. The main managerial skills gaps are in entrepreneurial skills, commercial acumen/awareness and leadership skills/vision.

Over time employers have begun to emphasise the need for technical, practical and job related skills over customer service skills. This is likely due to the increase in the use of IT-based skills in both interactions with customers and stock related tasks.

The majority of skills gaps are in the area of sales, with over 50% of the workforce employed in this area. However, in general there are fewer gaps in this sector than in other UK industries.

The other key area where skills gaps are an issue is with owner-operators in SMEs, where the owner frequently undertakes a large variety of tasks in the business. With a high level of competition in this area, cultivation of high quality management skills, as well as a wide range of core retails skills has become essential for successful business owners.

Many larger retailers also cite the need to improve the management and business development skills of their staff.

Improving the use of information technology in their day to day business is another key issue for many businesses in the sector, particularly through use of the internet and online trading. This requires increases in the levels of basic IT skills, as well as advanced and professional level skills in retail.

ICT Digital

8.6 Despite the pressure of the recession, businesses are still likely to find a shortage of applicants for positions. The E-Skills Sector Skills Council sets out the current skills environment as well as the key issues for the digital economy going forward are as follows.

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Posts involving programming, technical support and technology management roles tend to be the most difficult to fill.

The sector is also suffering from skills gaps among the current workforce as a result of globalisation and convergence.

The main skills gaps are in senior positions and relate to IT programme management, supplier management and service management and delivery.

Digital content companies have an oversupply of applicants, but a general lack of skills in several crucial areas when recruiting. In particular there is a need for more skills in management and leadership, monetisation of content, production of multi-platform content, broadcast engineering and visual effects. Multi-skilling is an important aspect for content companies to ensure efficiency and productivity.

There is a perception that the education system is not adequately preparing young people for the digital economy. The number of UK applicants for computing degrees is dropping, while there is a lack of teaching skills and adequate information to allow students to pursue careers in IT. Moreover, there is still a massive gender imbalance, with men making up over 90% of workers in IT.

Digital skills are now important for businesses in all sectors, with exploitation of technology a key aspect in maintaining competitiveness in the face of globalisation. However, smaller companies and older leaders are less likely to recognise the full importance of technology.

In the future, demand for IT skills is likely to see a significant increase across the board, with a 1.2% yearly growth in the number of employees in the sector forecast nationally from 2009 to 2019. Over half of these professionals are likely to come from other professions, with only a fifth provided by the education system.

The ability to produce and monetise multi-format content is likely to be of increasing importance in the coming years. Hybrid skills which are useful across sectors will become increasingly necessary, with the need to work across different technology platforms becoming more evident.

Content companies are seeing an increasing competitive environment and are likely to lose talent through redundancies and an increasing number of people working freelance.

Creative Media

8.7 Skillset, the Sector Skills Council for Creative Media, produced its latest Sector Skills Assessment in January 2011, outlining the crucial issues for the sector over the next year. These are set out as follows.

The sector is predominantly made up of small and medium businesses, with a large number of people in the sector working freelance.

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A large number of companies in the sector indicated that they have experienced an increase in their requirement for freelance labour over the last twelve months.

While employees and freelancers have high levels of desire for training and education, employers do not currently meet this demand.

Employers report a large number of hard to fill vacancies. Sales, marketing and technical development are particularly difficult areas to fill for companies in this sector.

There is a significant issue with mismatch of applicants’ abilities to the needs of the job. However, improvements in training and education are helping to rectify this issue.

Innovation is crucial to the industry and new developments in digital technology demands constant redevelopment of business plans and employee skills.

Key skills gaps include:

- multiskilling, including understanding of different technology platforms;

- multi platform skills;- management, leadership, business and entrepreneurial skills;- IP and monetisation of multiplatform content;- broadcast engineering;- sales and marketing; and- diagonal thinking, meaning the ability to create new, innovative

ideas and stories then monetise them using a variety of media on several platforms.

Logistics and Transport

8.8 The Skills for Logistics Sector Skills Assessment 2010 identifies the key issues currently affecting the sector. The most notable of these are set out below.

A significant link between a skilled workforce and competitive performance in the sector has been found. Trained workers are an average of 23% more productive than untrained workers. However, UK logistics employees tend to receive far less training than international competitors.

Smaller companies are far less likely to provide training than larger ones (100 employees or more). This is significant because the sector is dominated by small companies.

The sector prefers local training providers or specialist providers with bite sized courses.

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Driver CPC legislation will have a significant impact as nationally over 300,000 professional drivers will be required to take training in the next five years.

All occupational groups will experience a positive demand in employment by 2017, with considerable demand for managers, customer service positions as well as transport and machine operatives.

Sport

8.9 The Skills Active Sector Skills Assessment for 2010 identified the most pressing issues around skills provision in the Active Leisure, Learning and Wellbeing Sector in the UK, including key issues for Sports provision.

The sector is 54% female and 46% male, which is in contrast to the general pattern across sectors, where employment is 54% male.

In terms of recruitment, the main skills shortages in the sector included technical, practical or job specific skills. There were also shortages of team working skills, customer handling skills, problem solving skills and oral communication skills.

Skills gaps affect 16% of the sector in comparison to 15% of all sectors.

Future skill needs are likely to increase, as the sector is forecast to grow faster than the economy as a whole over the next 10 years. However, there is unlikely to be a shift in the type of work or the profile of people working in the sector. The industry will simply need more trained individuals than they currently have.

The one possible area of change is that employers seeking to increase competitive advantage may wish to concentrate more on developing the levels of management, communications, and customer handling skills of their employees

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9 CONCLUSIONS9.1 There is a significant issue in the region: public sector job losses affect all LEP

areas and the total job losses predicted are 76,000.

9.2 It has been shown that the public sector redundancies in the NW’s economy will pose a challenge to the region in the years ahead and that the uneven distribution of private sector opportunity across the NW could make it difficult to absorb public sector job losses.

9.3 Public sector employees, when asked, appear to be interested in the prospect of employment in the private sector but in reality there is no evidence that people are actively preparing for the transition. Public sector employees are generally under-informed about the reality of the jobs market. Many want to continue working in the public sector.

9.4 There is also a perception problem for public sector workers to deal with in making the transition from public to private, with many employers having misconceptions of the skill and motivation level of public sector employees. However, the reality is somewhat different in that those employers with real experience of hiring from the public sector are positive about it and are likely to do so again in the future.

9.5 Support is available in most agencies but there is a lack of awareness among public sector workers and employers about what is available and whether it is suitable for their needs. Most are unsure where to access information, advice and guidance. There is little evidence of joined up strategies to support public sector workers, as there is in the case of large scale private sector redundancies. There is a lack of specific support for public sector workers seeking transition into the private sector. Some LEPs are taking a leadership role in this area in the UK.

9.6 In order to inform the transition that many public sector workers must now make to the private sector, this report has identified particular locations, sectors and occupations where there will be high private sector growth in employment opportunity in the NW, and has assessed the skills disparities between outgoing public sector workers and the employment opportunities these expansions represent.

9.7 To that end this report has described and forecast trends in sector and occupation growth, noting strong growth in financial & professional services, retail and construction which is forecast to continue in the years to 2015. Employers are still encountering skills shortages and other specific issues across the growing sectors, and there are different problems experienced by employers within each sector. With the right support former public sector workers can offer a solution to private sector employers skills issues.

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