The Regional Skills Assessment gives an overview of the key issues facing the West Midlands economy with regard to the skills agenda.
This annual report aims to inform the work of key stakeholders to align the supply of training and related business support with the current and future demands of employers and individuals.
The Assessment explores the fundamental changes taking place in the regional economy and the way in which these are driving changes in the demand for skills from employers, individuals and communities. It then considers the extent to which the skills available from the workforce are 'fit for purpose' in meeting these demands.
Summary economic performance and prospects
There has been a further shift in the balance of employment from manufacturing to services in the Region as traditional manufacturing industries continue to decline and a range of public and private sector service industries expand and become key sources of wealth creation for the Region.
This service sector is forecast to be the principal focus for new job creation, with potentially significant growth in higher skilled managerial and professional occupations and ‘customer facing’ occupations in sales and customer service.
Strategic skills needs
Significant investment in skills, by both employers and individuals, is needed to realise potential economic and employment growth. In particular, employers need to develop:
- Management and leadership skills.
- Skills to support innovation, such as creativity and adaptability.
- Generic higher level skills, particularly amongst the ‘knowledge base’ sector.
Skills gaps and training
The proportion of the regional workforce with skill deficiencies is decreasing. However, problems remain. Retail, hotels and catering have high proportions of skill deficiencies, particularly amongst sales and customer service staff.
There are growing problems with gaps in generic or transferable skills, such as team working or customer handling.
The Region has a relatively low proportion of highly qualified workers in the private sector. The Region has the highest proportion of ‘hard to fill’ vacancies due to skills shortages in the country.
Given these issues it is encouraging that the proportion of employers with skills gaps investing in training is the highest in the country. Nonetheless the proportion investing in training overall is low, suggesting that workforces are not being up skilled for the future.
Qualification attainment
The Region has the highest proportion of the working age population with no qualifications in the country.
Qualification attainment at higher level qualifications (NVQ4) continues to increase with the gap between the Region and England narrowing slightly. However, the Region still has the third lowest proportion of the population with such higher level qualifications in the country.
A similar picture is seen for attainment at NVQ2 and above, although the Region has the lowest proportion of the population qualified to this level in England.
This is reinforced by qualification attainment amongst young people being below average. The urban areas of Birmingham, the Black Country and Stoke-on-Trent are characterised by particularly poor qualification attainment.
Attainment varies widely by ethnicity – within the Indian community the proportion with higher level qualifications is above the regional average. In contrast, the proportion with no qualifications amongst the Pakistani and Bangladeshi communities remains persistently high.
Participation in employment and learning
A lack of qualifications and basic employability skills contributes to a significant proportion of the Region’s population not being employed or working in low skilled, low paid jobs.
Low employment rates are particularly pronounced within the Region’s urban areas, the young and certain black and minority ethnic groups (notably Pakistani, Bangladeshi and Black Caribbean groups).
Employment rates are noticeably lower for older workers, for ethnic minority groups with higher level qualifications and women over the age of 25.
The overall employment rate is the fourth lowest in England, with the Region also having the second lowest rate of participation in work-related training.
Changing regional demography
Some of the groups not engaging in employment and learning, such as older workers and Pakistani, Bangladeshi and Black African communities are growing significantly and will account for a higher proportion of the Region’s working age population in the future.
Barriers to engagement in employment and learning
Groups and communities not engaging in employment or learning face a range of issues and barriers, some of which are:
- Inter-linked socio-economic factors, such as caring responsibilities, low household income or disability help create a cycle of exclusion which decreases individuals' chance of success in the labour market.
- Many women experience difficulties in re-entering the labour market after starting families, with a lack of confidence and little affordable childcare key issues.
- The benefits system acts as a powerful disincentive to some who wish to return to work.
- Many ex-offenders re-offend on leaving prison, with low skills and a lack of employment opportunities seen as key factors for this.
- Migrant workers face a range of barriers when seeking to develop skills, such as limited English proficiency and limited knowledge of general support networks.