The impact of persistent skills imbalances can prove detrimental for individuals, for businesses, and ultimately for the economy as a whole, resulting in lower levels of investment and lower productivity. Longer-term strategic solutions to skills imbalances range from a more targeted and prioritised approach in the activation of skills to strengthening and encouraging the responsiveness of education and training systems. This chapter explains the importance of reducing skills imbalances for Northern Ireland (United Kingdom) and examines current practices and performance. It then explores four opportunities to reduce skills imbalances: through providing career guidance and labour market information; strengthening the responsiveness and flexibility of the tertiary education and vocational education and training systems; addressing economic inactivity; and improving labour mobility to meet skills demand.
OECD Skills Strategy Northern Ireland (United Kingdom)
2. Reducing skills imbalances in Northern Ireland
Abstract
The importance of reducing skills imbalances
Skills imbalances, in the form of skills shortages, skills surpluses and skills mismatches (see Box 2.1) can be characterised as misalignments between the demand and supply of skills within an economy. Accumulated skills imbalances result in lower economic output than the potential provided for by an economy’s total skills stock. For society, reducing persistent skills shortages can contribute to increased overall prosperity, through higher levels of growth and additional tax revenues (OECD, 2016[1]). Businesses that suffer from skills shortages may be constrained in their productivity, innovation and competitiveness, and may also be impacted by increases in hiring costs and the rate of staff turnover. At the individual level, skills mismatches can cause people to experience a higher risk of unemployment relative to well-matched workers, lower wages, lower levels of job satisfaction, the attrition of their skills over time, as well as negative impacts on well-being and career progression (OECD, 2016[1]). Minimising skills imbalances is therefore critical for the economic and social success of wider society, businesses and individuals (OECD, 2019[2]).
Box 2.1. Definitions: Types of skills imbalances
A skills shortage refers to a condition of disequilibrium in which the demand for a specific type of skill exceeds its supply in the labour market, at the prevailing market wage rate.
A skills surplus, in contrast, comes about when the supply of a specific type of skill exceeds its demand in the labour market.
Skills mismatches occur when a worker’s skills either exceed, or fall short of, those required for the job under current market conditions (OECD, 2017[3]). Skills mismatches can be measured in a number of different ways:
Qualifications mismatch arises when a worker’s educational attainment is either higher or lower than that required by his/her job. If his/her qualification level is higher than that required by the job, the worker is classified as over-qualified; if the opposite is true, then he/she is classified as under-qualified.
Skills mismatch arises when a worker has higher or lower skills proficiency than that required by his/her job. If the worker’s skills proficiency is higher than that required by his/her job, then the worker is classified as over-skilled; if the opposite is true, then he/she is classified as under‑skilled.
Field-of-study mismatch arises when a worker is employed in a field that is different from the one in which he/she has specialised.
Source: OECD (2016[4]), Skills Matter: Further Results from the Survey of Adult Skills, https://doi.org/10.1787/9789264258051-en.
The impact of megatrends such as demographic change and automation (as mentioned in Chapter 1) will undeniably impact the Northern Ireland labour market of the future and, by extension, the skills required to be successful in that future labour market. The past number of years have witnessed an important shift in both the nature and number of jobs that make up the economy, thereby changing the skills demand of the economy (OECD, 2016[1]). Furthermore, as is the case with many other OECD countries, Northern Ireland will continue to be impacted by an ageing population (NISRA, 2019[5]). This decline in the working age population suggests that Northern Ireland will need to give due cognisance to ensuring more effective alignment of its workforce’s skills with the jobs that are available. Moreover, Northern Ireland will experience significant skills impacts as a result of the COVID‑19 (coronavirus) pandemic. In the near term, there will be increased pressures within health-related occupations and other specific fields. However, skills pressures at the aggregate level will likely dissipate in the short and medium term. Northern Ireland, therefore, needs to reflect on where it anticipates the pressures will be during its economic recovery, and subsequently prepare for that.
There are a number of different policy areas that have an impact on skills demand and supply, and therefore on skills imbalances. Chapter 3 examines the encouragement of lifelong learning as a policy response to aligning skills supply with changing demands. Educational provision within the compulsory system can also contribute to reducing skills imbalances, as is discussed in detail in Chapter 3. Similarly, while improving skills use and workplace practices can both have an impact on reducing skills mismatches, these matters are dealt with in Chapter 4. Finally, the responsiveness of the education and training sectors can be dependent on the overall funding available to them, which is covered in Chapter 5.
This chapter begins with an overview of current practices to reduce skills imbalances and performance indicators for Northern Ireland. It then explores four other main opportunities for reducing skills imbalances that have been chosen from the broad range of related policy areas: 1) improving individual career choice through the provision of enhanced career guidance; 2) strengthening the responsiveness and flexibility of the tertiary education and vocational education and training (VET) systems; 3) reducing economic inactivity to minimise skills shortages; and 4) improving labour mobility to meet skills demand.
Northern Ireland’s practices and performance in reducing skills imbalances
Current practices to reduce skills imbalances
In Northern Ireland, there are a variety of governmental and non-governmental actors involved in addressing skills imbalances through the provision of career guidance and labour market information; the education and training systems; policies to support labour mobility; and policies to reduce economic inactivity. Addressing skills imbalances requires a multi-agency approach across levels of government and external stakeholders. Overall governance of the Northern Ireland skills system is discussed in more detail in Chapter 5, but it is worth noting here the key players involved in addressing skills imbalances through their respective policy areas.
Insofar as career guidance is concerned, the Department for the Economy’s (DfE) Careers Service is responsible for providing careers information, advice and guidance on an all-age basis across Northern Ireland. The Department of Education (DE), which sets the common curriculum for all grant-aided schools, provides guidance on the delivery of careers education in schools.
DfE is also responsible for the policy, strategic development and financing of the further education (FE) sector, including for curriculum and qualifications below degree level (National Qualifications Framework [NQF] Level 6). Further education colleges (FECs) are non-departmental public bodies, and management responsibility for them lies with each individual college’s governing body. Insofar as higher education (HE) is concerned, DfE’s role is to formulate policy and administer funding to support education, research and related activities, through the autonomous HE institutions (HEIs).
The Department of Health (DoH) is responsible for funding, and applying student number limits, for study places on medicine, dentistry and nursing courses at Northern Ireland’s universities. The Department of Agriculture, Environment and Rural Affairs (DAERA) through the College of Agriculture, Food and Rural Enterprise (CAFRE), provides a range of full-time and part-time FE and HE courses in the areas of agriculture, food, equine studies, agri-food, and horticulture. There is a range of employer organisations involved in informing FE and HE provision to ensure alignment between education and training curricula and labour market demand.
For the policy areas relating to labour mobility and economic inactivity, a number of key players should be noted. While the United Kingdom (UK) Government Home Office has overall responsibility for migration policy in the UK, the Northern Ireland Executive has devolved responsibility for the implementation of certain migration-related policies, including the provision of education and training for migrants who arrive in-country. The Department for Communities (DfC) provides support for job seekers through the Employment Service, which is based in Jobs and Benefits Offices/Job Centres and Resource Centres. Support is also provided for people with disabilities through the Health and Work Support Branch and Work Psychology Services.
Performance in reducing skills imbalances
Labour market trends show that employment changes in Northern Ireland have fluctuated considerably over the last 15 years. Following the 2008 financial crisis, Northern Ireland’s recovery has been tentative, with employment growth being halted in 2012 and 2013, before then beginning to rise. At 2.4% at the end of 2019, the unemployment rate in Northern Ireland is relatively low compared to other OECD countries and economies and sits below the UK average (3.9%) (NISRA, 2020[6]). The comparatively low rate of unemployment has, however, resulted in a tightening labour market, with evidence emerging of labour shortages in certain occupational areas.
While the incidence of labour shortages is marginally lower in Northern Ireland than in the other UK countries, the tightening of the labour market in recent years has witnessed a sharp increase in skills shortage vacancies (SSVs) (see Figure 2.1, Panel A). While these vacancies are shared across the labour market, the highest concentrations are in high-skilled and middle-skilled occupations, with the highest occupational density of SSVs being in skilled trades and machine operatives (see Figure 2.1, Panel B).
Figure 2.1. Incidence of skills shortage vacancies (SSVs) and density of SSVs by occupation, as % of all vacancies, 2017
Note: Skills shortage vacancies are defined as hard-to-fill vacancies that resulted from the impossibility of finding appropriately skilled individuals (lack of skills, qualifications or experience among applicants).
Source: UK Government (2017[7]), Employer Skills Survey 2017: UK Findings, https://www.gov.uk/government/publications/employer-skills-survey-2017-uk-report.
Forecasts that examine future labour market demand in Northern Ireland suggest that the current shortages witnessed in high-skilled and medium-skilled occupations are likely to persist (if unaddressed) for the coming years. In line with other OECD countries, overall job growth is forecast to continue in these occupational levels. The Skills Barometer estimates that in a high-growth scenario, employment in Northern Ireland will grow from 885 000 in 2018 to 971 000 in 2028. Although this is an ambitious rate of growth, it is not inconsistent with growth rates achieved over the 2012-18 period (UUEPC, 2019[8]). It is also in line with assumptions of higher growth in higher value-added areas of the economy, as identified in the DfE’s draft Industrial Strategy (Economy 2030) (DfE, 2017[9]).
As mentioned in Chapter 1, however, the fall-out from COVID‑19 is likely to have significant short- and possibly medium-term impacts on the rate of employment growth in Northern Ireland. While certain sectors, such as healthcare, will see immediate near-term pressures, many other sectors will likely experience a lessening of current skills pressures in the short and medium terms, as a result of the increased rate of unemployment. Nevertheless, there remains value in continuing to use long-term growth forecasts, as a resilient multi-year skills strategy should be structured to adapt to economic shocks, however unprecedented they might be.
The Skills Barometer predicts that the sector that will see the largest growth will be Information and Communications, with a 4.2% per annum increase by 2028, followed by Professional, Scientific and Technical Services (2.4% per annum) and Finance and Insurance (1.9% per annum). The sectors contributing the largest absolute increase in jobs over the period 2018-28 are anticipated to be Professional, Scientific and Technical Services (11 780); Information and Communication (11 360); and Health and Social Work (11 320). Almost half of new jobs created in these and other sectors of the Northern Ireland economy will be for managers, professionals and associate professionals (UUEPC, 2019[8]).
The skill level required to take advantage of these new opportunities will be high. Only 10% of new job openings over the next decade will be accessible by people with qualifications at NQF Level 2 or below, and 33% will require at least an undergraduate degree (UUEPC, 2019[8]). As a result of this trend, it is anticipated that there will be an over-supply of low-skilled workers, and an under-supply of workers for medium-skilled occupations and, to a lesser extent, for high-skilled occupations (see Figure 2.2).
Figure 2.2. Average annual supply gap by qualification level in Northern Ireland (UK), 2018-20
Note: Supply gap measured in workers per year, from 2018-20.
Source: UUEPC (2019[8]), “Northern Ireland Skills Barometer” (Summary Report), https://www.economy-ni.gov.uk/sites/default/files/publications/economy/Skills-Barometer-2019-Summary-Report.pdf.
In addition to labour shortages, over- and under-skilling, over- and under-qualification, as well as field-of-study mismatch, are affecting Northern Ireland. While a number of skills assessment and anticipation (SAA) tools are publicly available, the above phenomena indicate that there may be ineffective engagement with them by individuals making career choices throughout their life course. Additionally, these labour and skills shortages and mismatches may be caused by a relative lack of responsiveness from the secondary VET and tertiary education sectors to align their provision with labour market demand and other factors.
Based on employer-reported data, Northern Ireland demonstrates a reasonably high share of under-skilled workers (i.e. with lower skills proficiency than that required by the job), and a low share of over-skilled workers (i.e. with higher skills proficiency than that required by the job) (UK Government, 2017[7]). UK employers report skills shortages in both the specific technical and practical skills required for specific jobs and in transversal skills (see Table 2.1). They report specialist skills and knowledge (69%) as being in shortest supply, although these are also accompanied by shortages in time management and prioritisation (46%), complex problem solving (40%) and team working (40%) skills.
Table 2.1. UK employer-reported skills shortages, 2017
Note: Percentage refers to the share of employers surveyed who reported difficulties in recruiting candidates with these skills.
Source: UK Government (2017[7]), Employer Skills Survey 2017, https://www.gov.uk/government/publications/employer-skills-survey-2017-uk-report.
While the Northern Ireland employment rate is marginally above the European Union (EU) average (NISRA, 2019[10]), workers in Northern Ireland often do not have the right qualifications for their jobs. Consequently, the above shortages across high- and medium-skilled occupations have also been coupled with relatively high incidences of qualification mismatches. The Survey of Adult Skills, a product of the Programme for the International Assessment of Adult Competencies (PIAAC), indicates that approximately 14% of Northern Ireland employees were under-qualified, and 22% of employees were over‑qualified for their current profession. These rates are both higher than their respective OECD averages, resulting in an overall qualification mismatch rate of 36.1% (OECD, 2019[11]).
The UK Office for National Statistics (ONS) has indicated that, in line with other EU countries, the incidence of over-qualification throughout the UK, including in Northern Ireland, seems higher for certain age groups (in particular those aged 25-34). This is a common reflection of the fact that it can often take recent graduates some time to find an appropriate occupational fit in the labour market (OECD, 2017[3]). However, the ONS goes on to suggest that the relatively high incidence of over-qualification for older age groups indicates that over-qualification is not just a temporary, but also a persistent, phenomenon in the UK labour market (ONS, 2019[12]). The persistent issue of over-qualification in Northern Ireland may, therefore, be related to increasing numbers of people undertaking higher education at Level 6, while the more significant levels of skills requirements, as suggested by the Skills Barometer, lie instead at Levels 3‑5 (UUEPC, 2019[8]). The issue of over-qualification may also be related to employers not changing their business models, and adopting innovations to take advantage of these skills (see Chapter 4).
The issue of qualification mismatch does not exist in isolation, however, and is also accompanied by significant levels of field-of-study mismatch. A mismatched worker is not able to use his/her field-specific skills on the job and, as a result, employers will generally not reward those skills. Field-of-study mismatched workers are therefore expected to earn lower salaries when compared to their well-matched peers (Montt, 2015[13]). There are certain exceptions to this rule, as some occupations may pay a higher salary to workers who have been trained in other fields (for example, a physics graduate who is working in the finance sector). However, the evidence suggests that on average, there are more costs than rewards associated with field-of-study mismatch. It should be noted that the costs of field-of-study mismatch will only be high in terms of individual earnings when it is also accompanied by a qualification mismatch (Montt, 2015[13]). At 47%, Northern Ireland’s rate of field-of-study mismatch is considerably higher than the OECD average of 39.6% (OECD, 2019[11]).
Field-of-study mismatches between HE graduates and key labour market areas dominate the HE landscape (UUEPC, 2019[8]). Despite the availability of information on current and future labour market shortages to direct field-of-study choice, there remains a persistent and significant under-supply of tertiary graduates in Engineering and Technology; Mathematical and Computer Science; and Physical Environmental Sciences. The situation has been improving of late, with the number of Northern Ireland “narrow” science, technology, engineering and mathematics (STEM) graduates increasing from 18% of overall HE output in 2008/09 to 23.8% in 2016/17. However, there remains a persistent oversupply of graduates in Education; Social Sciences; and Medical-Related Subjects (UUEPC, 2019[8]). This imbalance is echoed by Northern Ireland employers, with 73% of them reporting being “not confident” about their ability to access high-skilled employees – a higher rate than any other UK region (CBI/Pearson, 2018[14]).
Opportunities to reduce skills imbalances
This chapter examines four main opportunities to reduce skills imbalances. These opportunities have been selected following consideration of the relevant literature, discussions with the Northern Ireland Project Team, and feedback from government and stakeholder representatives who were consulted during a series of group discussions and workshops in Northern Ireland (see Chapter 1). Given the Northern Ireland context, the following four skills-related opportunities are considered to be the most appropriate to reduce skills imbalances in Northern Ireland:
1. Improving individual career choice through the provision of enhanced career guidance.
2. Strengthening the responsiveness and flexibility of the tertiary education and vocational education and training systems.
3. Reducing economic inactivity to minimise skills shortages.
4. Improving labour mobility to meet skills demand.
These opportunities have the potential to reduce skills imbalances in the short, medium, and longer term, according to the specific recommendations suggested below.
Opportunity 1: Improving individual career choice through the provision of enhanced career guidance
As seen in Chapter 1, the past decades have witnessed significant shifts in the types of jobs that make up the Northern Ireland economy, with the evidence indicating that these shifts will not only continue but will likely deepen (OECD, 2018[15]). The job market, and navigation of it, is consequently becoming significantly more complex. For those people who are about to complete, or have completed, compulsory education, decisions regarding what and where to study and work are taking on increased importance and difficulty. These decisions will take on additional significance in the context of the economic downturn that will follow the COVID‑19 pandemic when many education leavers will not be able to find employment for significant periods of time. Bearing that in mind, people need to be better informed than ever about career and study options, in anticipation of the labour market returning to relative normality in the medium term.
Career guidance refers to “services intended to assist people, of any age and at any point throughout their lives, to make educational, training and occupational choices and to manage their careers” (OECD, 2004[16]). Career guidance can then be broken down into three main components: career education; career information; and career counselling (see Box 2.2).
Box 2.2. Main components of career guidance
Career education, as part of the curriculum, in which attention is paid to helping groups of individuals develop the competencies for managing their career development. This includes exploring the world of work, partly through work experience, work shadowing, work visits and work simulations such as mini‑enterprises. It also includes self-awareness and the development of skills for making decisions and managing transitions, both now and in the future.
Career information, provided in various formats (increasingly web-based), is concerned with information on courses, occupations and career pathways, in order to support career and learning choices. This includes labour market information, such as employment rates and salary levels for occupations, as well as current job opportunities and education/training programmes for entry into professions.
Career counselling, conducted on a one-to-one basis or in small groups, in which attention is focused on the distinctive career issues faced by individuals. Counselling assists with self-assessment and self‑analysis, in order to help individuals best match their aptitudes, skills and interests with various professions, and thereby inform their choices about careers pathways and career development.
Source: Watts, A.G. (2009[17]), “The Relationship of Career Guidance to VET” (Paper), www.oecd.org/education/innovation-education/44246616.pdf.
Effective career guidance can help people make beneficial decisions about their education and career pathways, both for their short-term and longer-term future. High-quality career guidance can provide genuine value at key moments throughout the life course, especially when someone leaving education is deciding between future learning or career pathways. Career guidance services, provided they are accessible and informed by relevant and up-to-date labour market information, can help steer individuals towards career or training pathways for which they are well suited, and which hold good employment prospects (Musset and Kureková, 2018[18]).
However, it is often the case that students, workers, employers, and education and training providers may not be fully informed about the skills required in the labour market in the short, medium and long term. The value of effective career guidance, therefore, lies in addressing the imperfect or incomplete information upon which individuals might initially depend to inform their own preferences, capabilities and opportunities for beneficial career moves. Additionally, there is a strong element of equity that underpins career guidance. Effective career guidance can strengthen social mobility by informing young people of appropriate career paths, which their family and social networks might not otherwise have suggested, and by encouraging them to choose pathways that are more likely to lead to gainful employment (Musset and Kureková, 2018[18]).
Evidence also suggests that good-quality career guidance can not only have a positive impact on decision‑making processes, but can also contribute to reducing course switching and dropout rates, and contribute to more successful transitions between statutory and further/higher education (Bowes, Smith and Morgan, 2005[19]). Conversely, the absence of complete information or ineffective engagement with such information can lead to education/training choices that result in mismatches and/or shortages (Musset and Kureková, 2018[18]).
Given the uncertainty around forecasts of labour market demands, exacerbated by the impact of COVID‑19, and the likelihood that individuals will make multiple career changes, the goal of career guidance should not be limited to effectively matching individual choices with labour market demands. Good quality career guidance should also guide young people to equip themselves with essential career‑related skills, such as career exploration, self-awareness and self-confidence. This wider, behaviour-centred approach to the provision of career guidance can support individuals in not only managing their career transitions but also in maintaining openness to change and adapting to change throughout the life course (Patton, 2008[20]).
In Northern Ireland, a number of departments and organisations are responsible for career guidance. The Department of Education (DE) sets a statutory common curriculum for all grant-aided schools to pupils of school age. While the amount of time per subject is not prescribed, schools are required to provide sufficient time to deliver a balanced curriculum that meets all statutory requirements. A key component of the common curriculum is the Entitlement Framework, whose aim is to provide pupils with access to a wide range of subject pathways. This broader choice of subject pathways requires a corresponding increase in access to high-quality careers provision if young people are to make informed choices. Consequently, DE guidance to support schools in planning for the Entitlement Framework includes a substantial section on careers education. The guidance defines the overall objective of a careers education programme as enabling learners to manage their own career development successfully and sets out three aims: self‑awareness and development; career exploration; and career management.
The Department for the Economy’s (DfE) Careers Service provides impartial career information for all ages, as well as an advice and guidance service throughout Northern Ireland (nidirect, 2020[21]). There are over 100 careers advisers, all of whom are professionally qualified to postgraduate level or equivalent, and are members of the Career Development Institute – the main UK-wide professional body for careers practitioners. DfE careers advisers support all 16-17 year-olds who have yet to enter or sustain a place in education, training or employment after leaving school. They also take an active role in the transition planning process for young people with disabilities moving from school to adult provision or employment. They can also help parents/guardians with their child's future career plans. Every post-primary school has a Partnership Agreement in place with DfE’s Careers Service to support careers education provided in schools by careers teachers.
In addition, each of the FECs and HEIs offers an independent career and employability service. Many of the advisers employed in FECs and HEIs have similar professional backgrounds and qualifications to DfE’s Careers Service advisers, with the job often being combined with a general student support role, including developing links with industry and helping to secure work placements for the students (Ambrose, 2014[22]). FECs also have in place Partnership Agreements with DfE’s Careers Service, which operate on a referral basis. The CAFRE also organises career advice events across its three campuses.
There have been a number of recent strategies on, and reviews of, career guidance provision in Northern Ireland. In 2009, the former Department for Employment and Learning (DEL) and DE jointly developed the Preparing for Success (2009-2014) Careers Education, Information, Advice and Guidance Strategy (DEL; DE, 2009[23]). It sought to improve partnership working between the departments, to meet the career guidance needs of individuals of all ages. In 2013, the then Northern Ireland Assembly Committee for Employment and Learning published a detailed inquiry into the provision of career guidance in Northern Ireland (NI Assembly Committee for Employment and Learning, 2013[24]). The inquiry made 25 recommendations for DEL and DE, including the need to improve quality and consistency within the careers advice system, as well as its responsiveness to the needs of the labour market. In response to the report, the Ministers for Employment and Learning and Education jointly established an independent panel to advise on the implementation of recommendations and the future direction of the careers system in Northern Ireland. The panel’s report (Ambrose, 2014[22]) made a series of recommendations under seven main themes: a statutory duty - developing a consistent approach; the role of the curriculum; overcoming barriers; promoting STEM subjects; providing information; engaging with business; and improving advice.
As a response to the two previous assessment reports, DEL and DE launched Preparing for Success (2015‑2020): A joint strategy for career education and guidance in Northern Ireland. The strategy includes five policy commitments in relation to the improvement and dissemination of information on the labour market and career guidance services in order to minimise skills imbalances (DEL; DE, 2016[25]). The strategy will be reviewed in 2020 to assess the extent to which it has delivered on previous recommendations. However, views expressed by participants in OECD Skills Strategy consultations indicate that, while some progress has been made in addressing many of the earlier recommendations, there remain a number of persistent issues within career guidance provision.
Improving the quality and consistency of career guidance
Participants throughout the OECD Skills Strategy project consistently reported issues of fragmentation in how careers guidance and education was delivered across providers, as well as variations in the quality of this provision (see Annex B, for instance, for outcomes of pre-workshop surveys on reducing skills imbalances). Northern Ireland should, therefore, examine current provision and evaluate how careers guidance delivery could improve and be made demonstrably more consistent.
DfE’s Career Service could strengthen the measurement of outcomes of their services to support the quality and consistency of career guidance. DfE’s Career Service has in place a number of metrics to measure its various interventions. For 2018-19, these activities included: 53 052 clients who accessed careers services; 97% of Year 12 pupils received face-to-face careers guidance (against a target of 100%); 12 843 careers guidance interviews delivered to adults; 498 609 visits to the Careers Service website; 6 289 telephone queries answered; 724 email queries answered; and 2 381 web chats held (DfE, 2020[26]). While there is value in quantifying interventions in demand-led provision, the above metrics point only to activity undertaken and do not measure the impact or outcomes of that activity. DfE’s Careers Service has made significant progress in recent years, by putting in place Partnership Agreements with 100% of schools and FECs. This has not always been the case, and may, therefore, be one explanation for the reported variance in quality of careers guidance across different education providers. The provision of these agreements, and the resulting guaranteed access to the Careers Service’s expertise, points to the structural potential for greater consistency of career guidance provision. Moreover, the adoption of a partnership approach between schools and an external career guidance service is recognised internationally as the preferred model for delivering careers services (Watts, 2009[27]). However, there are currently no measurement arrangements in place to allow for assessment of the outcomes of this model.
There are indications that the quality and consistency of careers education in schools could be improved. While DE has specified the minimum careers education content that must be delivered to pupils at each stage of their education pathway, schools have considerable flexibility in how to interpret this, as well as the resources and levels of expertise allocated to its delivery. There was a clear indication from individuals consulted throughout this project that this flexibility has resulted in inconsistent delivery of careers education in Northern Ireland schools; a point also highlighted in previous reviews (Ambrose, 2014[22]; NI Assembly Committee for Employment and Learning, 2013[24]). This point is reinforced by an examination of the Education and Training Inspectorate’s (ETI) evaluations of careers education provision in schools. When ETI first evaluated careers education in 2010, only 37% of provision (for 2008-10) was assessed as “good or better”. This rose significantly to 68% for 2010-12, and again to 86% for 2012-14. However, the most recent Chief Inspector’s Report (ETI, 2018[28]) describes only the majority (50-74%) as meeting pupils’ needs and aspirations.
What the above points to is systemic fragmentation and inconsistency in the delivery of careers advice and education across education and training providers, as well as variation in how the impact of such provision is measured. This fragmentation, in turn, suggests the need for common quality standards to be developed, as a way to ensure greater consistency in how all education and training providers in Northern Ireland deliver career guidance. Such common standards (see Box 2.3) should feature outcomes-based measurements to gauge the impact of delivery.
As will be recommended below, DfE, DE and DAERA, in collaboration with schools, FE providers, HEIs, as well as client representatives, should develop a set of common practitioner and organisational quality standards, to define and evaluate the desired outcomes from a successful system of career guidance provision. Such outcomes could be the development of specific skills/personal characteristics (as in Canada, see Box 2.3), or of educational/employment outcomes. In addition to clearer and common definitions of expected outcomes, the standards could include precision on the range of specific services to be offered by each education/career service provider, such as career guidance classes (e.g. in Norway); one-to-one sessions; activities with parents (e.g. in Austria); and activities to promote STEM-related subjects (e.g. in the Netherlands). The range of these activities should be adapted according to the level of education being delivered. For example, one-to-one sessions could be more suitable in FE and HE provision, while promoting STEM-related subjects could be more important in secondary schools.
Moreover, in order to increase external awareness of performance against common quality standards, as well as to promote the availability of these services, providers of careers guidance should regularly publish careers performance data, against established metrics for outcomes. Such data should be user‑friendly, and increase the accountability of the departments and providers to their respective stakeholders.
Box 2.3. Relevant international examples: Quality and consistency in careers advice provision
Establishing clear quality standards: An example from Scotland (United Kingdom)
Scotland has a well-developed and comprehensive system of career guidance. The government funds a national public body, Skills Development Scotland (SDS), to deliver work-based learning, engage employers in learning, and deliver career information, advice and guidance (CIAG). The SDS sets clear standards in terms of the type of services to be received by different users and is developing a series of learning resources for career guidance professionals, which are directly linked to the Career Education Standard. SDS takes a person-centred approach to the delivery of CIAG and tailors the provision of support to the unique needs of each student or adult user. To increase equality of opportunity for all, CIAG services target resources at those users who require the most support. A “needs matrix” is used to indicate the level of support required for each user and the corresponding service offer they might receive; this need is then validated to confirm the service offer entitlement.
Quality standards that focus on outcomes: An example from Canada
Career guidance quality standards can also focus on outcomes by, for example, specifying the types of skills and competencies that career guidance should try to achieve. The Canadian Blueprint for Life/Work Designs is an example of such an approach. The Blueprint is a common framework of career development competencies that students and adults anywhere in Canada or the United States need to master, in order to be successful and self-reliant in planning and managing their careers in a rapidly changing, knowledge-age labour market. A practical resource designed for career guidance professionals, the Blueprint specifies ten broad competencies in three overarching areas: personal management; learning and work exploration; and life/work building.
Source: SDS (2020[29]), “Skills Development Scotland” (Article), www.skillsdevelopmentscotland.co.uk/; Jarvis and Richardt (2000[30]), “Blueprint for Life/Work Designs” (Report), https://eric.ed.gov/?id=ED446296.
Recommendation for improving the quality and consistency of career guidance
1.1. Complement recent strategic reforms to career guidance provision across all providers, by developing clear, common, transparent and accountable quality standards. DfE, DE and DAERA, in collaboration with schools, FE providers, HEIs, as well as client representatives, should develop a set of common practitioner and organisational quality standards, to define and evaluate the desired outcomes from a successful system of career guidance provision. Such outcomes could be the development of specific skills/personal characteristics (as in Canada) or of educational/employment outcomes. In addition to clearer and common definitions of expected outcomes, the standards could include precision on the range of specific services to be offered by each education/career service provider. In order to increase external awareness of performance against common quality standards, as well as to promote the availability of these services, providers of careers guidance should regularly publish careers performance data, against established metrics for outcomes.
Improving the dissemination of career guidance information
As the performance section of this chapter indicates, emerging skills imbalances and unsatisfactory employment prospects may in part result from an absence of reliable and accessible labour market information, or at least from ineffective engagement with such information. This issue is not exclusive to Northern Ireland; it has historically been a challenge in most OECD countries. Young people, their parents, teachers, and other intermediaries often have insufficient information or poor understanding of career options, including those related to vocational education and training, and their potential to support young people into ultimate employment (OECD, 2004[16]). Choices made by younger people are often driven by external influencers (peers, parents and teachers) and not solely based on objective information (OECD, 2004[16]); a point that is now most likely reinforced through young people’s increased engagement with social media.
Northern Ireland’s misalignments at qualification, skill and field-of-study levels indicate a need for improved information; either effective (real-time) labour market information to inform career pathway choice is unavailable, or individuals are unaware of such information, or they are engaging with it ineffectively. The misalignment also indicates a need to assess the extent to which SAA tools, such as the Northern Ireland Skills Barometer, are being effectively incorporated into the provision of career guidance. Participants throughout the OECD Skills Strategy project repeatedly emphasised that young people were often encouraged to undertake aspirational higher education pathways, even though a vocational/apprenticeship pathway may be more appropriate for their personal aptitudes, as well as for local employment. This would appear to be substantiated by the Skills Barometer, which demonstrates significant under-supply at the mid-skill levels, with only a marginal under-supply at the higher skill levels.
To minimise skills imbalances, students and the individuals who influence their choices need to become more responsive to current and future labour market dynamics. Across OECD countries, this typically requires improvement in the dissemination of information from SAA tools, and the provision of effective career guidance services (OECD, 2017[31]). SAA exercises are the main tools for generating and disseminating information on labour market and skills needs. Countries rely on different types of SAA exercises, such as labour market information systems (including vacancies and other labour market data); quantitative forecasting models; and more qualitative methods such as employer surveys and panels (OECD, 2016[1]). These are examined in greater detail in Chapter 5.
Across OECD countries, online portals and targeted information campaigns are the two main channels for disseminating information on labour market and skills (OECD, 2017[31]). Online portals can be used to provide information on labour market demand and employment outcomes for different courses, as well as study and career opportunities. Information campaigns, on the other hand, raise awareness about the importance of using information on labour market and skills needs when making career and education choices, or to steer graduates towards specific fields of study that are in demand (OECD, 2017[31]).
Currently, Northern Ireland does not have a single online portal that combines information on study/career opportunities and educational/training outcomes, with local labour market needs. While there is considerable information available on line, the provision of this information across multiple sources creates fragmentation that is difficult to navigate efficiently or coherently. This point was strongly made by participants in the OECD Skills Strategy projects as well as in a recent report by Ulster University’s Economic Policy Centre (Johnston et al., 2019[32]). In other OECD countries (see Box 2.4), it is common practice to have information on both study opportunities and labour market information/trends on the same careers website. This combination allows students and their choice influencers to more easily consider the advantages and disadvantages of different study options. On the nidirect portal, a range of different information is provided on HE, FE and training provision, although these elements sit separately from careers support information. Meanwhile, local job vacancies are advertised separately on the Department for Communities’ (DfC) JobCentreOnline website. In the “Careers” section of nidirect, ostensibly the main online careers site for Northern Ireland, there is a “Skills in Demand” section that provides information from the Skills Barometer on occupational areas where there is current and anticipated future demand. This section also contains good information regarding online career support, career events and work experiences. However, the information simply provides a list of occupational areas; users have to navigate to a different part of the website to find further information on the qualification requirements for those occupations, and for the educational/training pathways to achieve the required qualifications. There is no indication provided of whether there are local study opportunities that impart the skills needed in those occupations. The “Careers A-Z List” does provide comprehensive information on various career profiles, including required qualifications, expected salary outcomes and video testimonials.
The DiscoverUni website provides official statistics about the UK HE courses taken from national surveys and student data collected from universities and colleges. The Universities and Colleges Admissions Service (UCAS) website also provides support, advice and guidance to prospective students, and their parents/advisers. For FE provision in Northern Ireland, there is no equivalent to the UCAS or DiscoverUni sites.
DfE’s Careers Service recently launched a new tool for adults (Kudos) on the nidirect portal, which enables clients to access the MyFuture assessment tool, which links interests and career ideas. These tools are examples of good practice and have the potential to positively influence individuals’ career choices. However, the challenge with such types of online services is tailoring the information to the specific and diverse needs of target groups. There will be value in reviewing these resources in due course, to assess both uptake and clients’ views on their usefulness. DfE’s Careers Service should, therefore, undertake a review of these tools to assess their effectiveness in meeting their clients’ requirements. Any such review would need to be both qualitative and quantitative, and take into account the interactivity of the tools, the usefulness of the information provided and the format of the provision. This latter point is especially important in light of the increasing digital literacy of clients, and their demand for engagement with information in more immediate and accessible formats.
Northern Ireland could also design re-focussed careers information webpages that combine the currently fragmented SAA information into one place; nidirect appears to be well-placed to host this information. Such a webpage would mirror the provision of careers advice and guidance in other UK jurisdictions. It should simultaneously contain information on FE/HE graduate tracking and longitudinal outcomes; local study and training opportunities; job vacancies; the content of university and vocational education and training courses; and potentially more clearly visualised information on specific career pathways. While some of this information is currently on nidirect, Northern Ireland could benefit from having more consolidated and expanded careers webpages to facilitate ease of navigation and concentration of content. The information on the portal would need to be updated at regular intervals.
Once the careers portal has been established, DfE could also consider undertaking a publicity campaign that advertises the importance of engaging with labour market information when making educational/training choices, throughout one’s life course. The campaign could advertise the newly consolidated careers webpages through a variety of channels (e.g. social and traditional media). Consideration should also be given as to whether such a campaign should be one-off, or whether a sustained information campaign is required to drive demand to the site.
Box 2.4. Relevant national and international examples: Availability and use of skills assessment and anticipation tools
My World of Work: An example from Scotland
Scotland has a well-developed and comprehensive system of career guidance, which is central to the Scottish Government achieving its ambitions in the key areas of skills, education and employment. The importance of high-quality career guidance is reflected across numerous policies and strategies, with Skills Development Scotland (SDS) funded as a national public body, to deliver work-based learning, engage employers in learning and deliver career guidance. My World of Work is SDS’ award‑winning career information and advice website. By working in partnership with industry and education, SDS has developed a portal that provides tailored information, advice, and resources for: individuals seeking career guidance; parents and careers; teachers; and college and university staff. The Skills Planning model used by SDS allows career practitioners to be equipped with the most recent available labour market intelligence, provided in an easily-accessible format. This includes information on industry demand, at both a regional and sectoral basis, with a focus on the needs of priority and growth areas such as the STEM sectors. The portal also has up-to-date information on the full range of routes and pathways that can be taken into those careers, including options for work-based learning. The site also has a job search function to find local vacancies.
Online portals: Example from Denmark
In Denmark, students can use an online tool, Uddannelseszoom (education zoom), to make informed decisions about the course they choose to study at the tertiary education level. Using this tool, students can compare up to three different courses at any one time from institutions across Denmark. Uddannelseszoom links labour market outcomes to specific qualifications, allowing students to more actively consider career prospects when choosing where and what to study. The information provided to students includes unemployment levels, average pay, whether the qualification equipped previous graduates with the right skills for their career, and how they got their first job after leaving education. The information is based on SAA tools to monitor graduate outcomes. The Ministry of Education and Research oversees the project, and the tool is continuously updated as new statistics become available. The Ministry of Higher Education and Science launched a media campaign just ahead of the deadline for higher education applications. It sought to encourage students to take labour market outcomes from Uddannelseszoom into consideration when making their choices.
Source: SDS (2020[33]), “My World of Work” (Article), www.myworldofwork.co.uk/; OECD (2017[31]), In-Depth Analysis of the Labour Market Relevance and Outcomes of Higher Education Systems: Analytical Framework and Country Practices Report, www.oecd.org/education/skills-beyond-school/LMRO%20Report.pdf; Danish Ministry of Education and Research (2020[34]), “Uddannelseszoom” (Artice), www.ug.dk/vaerktoej/uddannelseszoom/.
Recommendations for improving the dissemination of career guidance information
1.2. Introduce a consolidated portal to provide all users of career guidance with access to information on labour market and skills needs, as well as study/work opportunities. In the short term, DfE should take the lead in creating a single careers portal that contains information on study opportunities and labour market demand for related occupations/skills at the regional level. The nidirect portal would be well-placed to host this information. This could be achieved by combining information from the Skills Barometer with the range of locally relevant information from Unistats and UCAS. The portal could also potentially contain information on local VET qualifications; university degrees; apprenticeship opportunities; job vacancies; and improved visualisation of the range of different career pathways. Finally, the portal could also be used to provide information on adult learning opportunities and benefits, which are discussed in further detail in Chapter 3.
1.3. Review the effectiveness of recently-introduced career guidance tools with a view to their further improvement. DfE’s Careers Service should undertake a review of the new Kudos and MyFuture tools to assess their effectiveness in meeting their clients’ requirements. Any such review would need to be both qualitative and quantitative, and take into account the interactivity of the tools, the usefulness of the information provided and the format of the provision.
1.4. Consider launching a publicity campaign targeted at students and their families that reinforces the importance of using labour market information. Once the consolidated careers portal has been established, DfE could also consider undertaking a publicity campaign that advertises the importance of engaging with labour market information when making educational/training choices, throughout one’s life course. The campaign could advertise the newly introduced careers portal through a variety of channels (e.g. social and traditional media).
Including employers in the provision of career guidance
Effective career guidance includes extensive engagement from people in work (employers, employees, trade unions, professional bodies). Exposure to the world of work enriches career guidance, by presenting young people with authentic insights into jobs, and offering them a real-world bridge to decisions about education and training (Musset and Kureková, 2018[18]). Many young people have internalised ideas of what they should choose as their education and employment pathways. These ideas are often formulated by the influences of their particular socio-economic status, gender and ethnicity, rather than by the realities of the labour market. Career guidance, and particularly effective role models from the world of work, can actively tackle erroneous assumptions about what are appropriate choices for girls and boys, and young people from different socio-economic backgrounds. If young people can discover what a certain profession is really about, or discover the different ways in which one can work in a particular field, then they might find it easier to imagine themselves in that role and thereby break otherwise reinforcing stereotypes (Musset and Kureková, 2018[18]).
To ensure that the foundational skills acquired through the education and training system correspond to labour market needs, it is critical to develop strong links between the worlds of both education and work. Career guidance and employer partnership activities should, therefore, play a major role in encouraging a collaborative understanding of the world of work from the earliest years, backed by visits to workplaces, internships, workplace experiences and careers fairs (OECD, 2010[35]). Research suggests that young people particularly value information on jobs and careers if it is obtained in a real workplace and through contacts with working people (OECD, 2010[35]).
Across OECD countries, fewer students participate in career guidance activities in which employers are engaged. Results from the Programme for International Student Assessment (PISA) 2012 survey show that only 27% of students reported that they had participated in an internship programme, and about 37% had shadowed a worker. More commonly, students engaged in career guidance activities that did not engage employers; as many as 60% of students had filled in a questionnaire, and 70% searched the Internet for information (Musset and Kureková, 2018[18]).
The above results indicate that there may be barriers deterring employers and education/training providers from mutual co-operation. Such barriers could include: employers not having sufficient motivation to engage in the provision of career guidance, as the benefit to them is not always clear; legal constraints to greater involvement of employers in education; reluctance by teachers/lecturers to accept people into their classrooms; and lack of resources to cover the costs linked to reaching out to people in work (Musset and Kureková, 2018[18]). Some forms of employer-led career guidance activities, however, may be easier to bring about. For example, in-workplace activities (job shadowing, internships, workplace visits) are regarded as being more demanding, compared to school-based activities such as employee participation in enterprise competitions and careers fairs. Providing employer talks in schools is considered to be the least resource-heavy activity for employers (CIPD, 2014[36]).
There are examples of effective connections between schools and the world of work (see Box 2.5). While the examples focus mainly on the schools sector, the principles of these programmes could be adapted for FE and HE providers. There are also organisations in Northern Ireland, such as School Employer Connections (School Employer Connections, 2020[37]), who establish connections between schools and employers, in order to encourage employers to assist in preparing students for the world of work. Within this context of experiential learning, the delivery of entrepreneurship education can be particularly effective in developing the softer workplace skills that are in demand (see Chapter 4 for further discussion). However, Northern Ireland could benefit from a more coherent and consistent approach to linking education and training with the world of work, including the establishment of common outcomes. In developing a set of common practitioner and organisational quality standards for career guidance, Northern Ireland should also include specific outcomes and activities on employer engagement, appropriate to the respective cohort. Activities should include minimum specifications for meaningful work experiences for young people in school, as well as within FE and HE. In order to reduce local skills imbalances, work experience and employer engagement should encourage the exploration of career pathways within growth sectors and sectors with local skills shortages. The provision and prioritisation of employer engagement activities should pay due attention to, and address, the barriers that employers may face in engagement with career guidance, as well as the preferred format for young people/students. The Career Advisory Forum consists of representatives from business, education and other key stakeholders to advise the government on career guidance, bringing education closer to labour market needs, and supporting local stakeholder involvement of service users, education providers and business. This forum should play a key role in developing these specifications.
In developing a new careers portal (as suggested earlier), specific information should be included on the portal for work experience and employer engagement opportunities. Such opportunities could include employers who are prepared to offer work experience/internships for students across all educational levels and sectors; apprenticeship opportunities; employers and individuals who are available to schools and education/training providers for employer talks and careers fairs; and informal mentorship programmes. This should be a significant expansion of the current Connect to Success NI provision on nidirect, which is under-utilised.
Box 2.5. Relevant international examples: Employer engagement in careers advice
Inspiring the Future: An example from the UK
Inspiring the Future is a website where schools, colleges and volunteers from the world of work can connect. Based on the concept of online matchmaking, it deploys software to provide secure and cost‑free interactions between schools and the world of work. Volunteers from various professions pledge one hour a year to volunteer in a state school or college near where they live or work, to talk to young people about their job and career route. In addition, volunteers can select a number of areas of expertise that might be of interest to students, such as how maths is used at work, financial literacy, languages, or engineering and technology. Teachers select and invite people who best meet the needs of their students from a range of sectors and professions. A parallel campaign has been launched: The Inspiring Women campaign links working women and girls at schools, with the aim of exposing young women to the variety of roles that women have to broaden their horizons and inform their ambitions.
Route to VET: An example from Denmark
The Route to VET campaign was initiated and led by the Danish Vocational and Technical School Students Union, whereby Danish vocational education and training students act as role models and visit secondary schools in order to promote VET. During these school visits, the VET role models present their own experiences on why they chose VET, their specific training and their future opportunities, both within the labour market as well as for further study. The campaign reflects a partnership arrangement between VET schools, employers and secondary schools to increase first‑hand exchanges between younger students and older peers to provide personal insights into VET pathways.
Source: Education and Employers (2020[38]), “Inspiring the Future” (Article), www.inspiringthefuture.org/; EEO (2020[39]), “Route to VET” (Article), http://eeo.dk/vejentil/om-kampagnen/.
Recommendations for including employers in the provision of career guidance
1.5. Ensure that common quality standards for the provision of career guidance include specific employer engagement measures. In developing a set of common practitioner and organisational quality standards for career guidance, Northern Ireland should include specific outcomes and activities on employer engagement, appropriate to the respective cohort. Activities should include minimum specifications for meaningful work experiences for young people in school, as well as within FE and HE. In order to reduce local skills imbalances, work experience and employer engagement should encourage the exploration of career pathways within growth sectors, and sectors with local skills shortages. The Career Advisory Forum should play a key role in this.
1.6. Include opportunities for employer engagement on a new careers portal. In developing a new careers portal (Recommendation 1.2), specific information should be included on the portal for work experience and employer engagement opportunities. Such opportunities could include employers who are prepared to offer work experience/internships for students across all educational levels and sectors; apprenticeship opportunities; employers and individuals who are available to schools and education/training providers for employer talks and careers fairs; and informal mentorship programmes.
Opportunity 2: Strengthening the responsiveness and flexibility of the tertiary education and vocational education and training systems
While education and training provision should be about more than simply preparing individuals for labour market participation, this should nonetheless remain a key objective. An education and training system that is responsive to labour market needs provides adequate incentives to institutions to offer courses in high demand and to potential students to take those courses. It also allows students to develop a set of skills that are aligned with both short- and long-term labour market needs (OECD, 2015[40]).
While informed student choice can indirectly exert pressure on educational institutions to improve the quality of programmes (OECD, 2004[16]; OECD, 2012[41]), it is insufficient to ensure a responsive education system. Education institutions must ensure provision aligns with labour market needs, both in terms of the spread of study places across faculties, and the technical and soft skills delivered by programme curricula. When an education system is responsive to future labour market needs, graduates are more resilient to future changes in the dynamic patterns of job creation from emerging megatrends.
Improving the alignment between education provision and labour market demand
Past decades have seen gradual increases in higher education enrolments (NQF Level 4+) in both HEIs and FECs (see Figure 2.3). However, recent years have witnessed a reduction in full-time undergraduate (NQF Level 6) enrolments, largely due to reductions in funding for that cohort. In contrast, following the recent introduction of postgraduate loans, there was a 19.1% increase in full-time first-year postgraduate (NQF Level 7) enrolments between 2016/17 and 2017/18, with a 43.7% increase in enrolments in higher degree (taught) enrolments.
Figure 2.3. Higher education enrolments in HEIs and FECs in Northern Ireland (UK), 1988-2017
Note: Data including Open University enrolments available from 2005/06 onwards.
Source: DfE (2019[42]), Enrolments on Higher Education courses at Higher Education Institutions and Further Education Colleges, https://www.economy-ni.gov.uk/publications/enrolments-higher-education-courses-ni-higher-education-institutions-and-ni-further-education.
As a result of the increase in higher education enrolments, at NQF Level 6+, the overall effective net higher‑level skills under-supply is marginal (approximately 200 graduates per annum) (UUEPC, 2019[8]). For higher education in Northern Ireland, the main challenge linked to skills imbalances relates to field-of-study mismatches. As described in the performance section, despite recent improvements, Northern Ireland’s tertiary education system is not producing sufficient graduates in STEM subjects, particularly Engineering and Technology; Mathematical and Computer Science; and Physical Environmental Sciences.
Northern Ireland does have shortages at the level of professional and technical qualifications, largely driven by a lack of supply at this level. In 2017/18, 34 300 individuals qualified from funded, regulated courses at FE colleges, the majority from relatively low-level courses (62% of 2017/18 FE qualifiers were in a course equal to NQF Level 2 or below). Over the coming decade, it is forecast that approximately 8 000 qualifiers per annum will gain a qualification below Level 2 at FE colleges; 9 000 per annum will qualify from a NQF Level 3 course; and 3 000 per annum will achieve a qualification at NQF Level 4 or above (UUEPC, 2019[8]). At the mid-skill level, the Skills Barometer indicates that there will be more significant labour market supply gaps at NQF Level 3 (approximately 2 000 per annum) and Levels 4‑5 (approximately 1 500 per annum), across a range of subjects (UUEPC, 2019[8]).
The above imbalances can in part be attributed to a relative lack of effective responsiveness from the education and training sectors to meet the requirements of the labour market in terms of the number of study places in specific fields of study. The Skills Barometer suggests that the education system facilitates enrolments in fields of study that have less economic relevance while continuing to under-supply provision in subject areas for which there is greater labour market demand. This is particularly the case for provision at NQF Level 4 and above.
Northern Ireland should introduce policies to ensure better alignment of provision. Across OECD countries, such policies usually take the form of regulation (setting conditions for the accreditation of programmes or requiring institutions to collect and publish information) or funding arrangements (making funding conditional on performance metrics – see Box 2.6) (OECD, 2017[31]). Governments also limit the number of students in specific study programmes with low labour market demand; in Denmark, caps were introduced on the number of students in HE study programmes where graduates have experienced higher unemployment rates (OECD, 2017[43]). Northern Ireland does not have a strong tradition of regulating its education institutions, particularly HEIs, and has tended to restrict its use of student caps to the institutional level. Therefore, the use of funding arrangements could be the most appropriate solution to ensuring that HEIs facilitate growth in subject areas for which there is more demand (e.g. STEM) and that FECs facilitate overall growth in programmes at NQF Levels 3, 4 and 5, responding to projected shortages.
Currently, in tertiary education (NQF Level 6+), Northern Ireland’s three universities and two university colleges are publicly funded, and they retain full autonomy. DfE provides teaching grants (approximately GBP 141 million in 2019/20) through a funding formula. However, it also applies a maximum student number (MaSN) – an annual cost control mechanism that specifies the overall number of full-time undergraduate students. A similar maximum student number is specified each year by DE for the number of undergraduate teacher training places at the two university colleges, although the budget for this provision lies with DfE (approximately GBP 1 million per annum). In addition, the Department of Health (DoH) is responsible for applying student number limits for study places on Medicine, Dentistry, and Nursing courses at the universities; DoH provides the relevant funding for this provision to DfE who distributes this on their behalf (approximately GBP 2.5 million in 2019/20). The DAERA does not set a higher education MaSN for the CAFRE. Students also contribute to their higher education through annual tuition fees which are paid directly to the HEIs. Universities and university colleges are responsible for developing their own curricula. They are also responsible for allocating study places across their various faculties within the overall annual limit.
The six FECs in Northern Ireland provide learning in Essential Skills training, further education/secondary VET, and vocational higher education. In 2017/18, 20.3% of FEC provision was Essential Skills training (ISCED level 1), with further education (ISCED levels 2-4) making up 70.5% of provision, and 9.2% being vocational higher education (ISCED level 5+) (DfE, 2019[44]), through a mix of both part-time and full-time provision. DfE’s resource budget for this provision in 2019/20 was approximately GBP 169 million.
Northern Ireland could create better alignment between provision and labour market demand by making the provision of teaching grants conditional on certain performance metrics. For Northern Ireland’s HEIs, a proportion of the grant allocated by DfE should be made contingent on employment outcomes from the HE graduate tracking survey. While the number of graduates from CAFRE is considerably smaller than from the wider HE and FE sectors, DAERA may also wish to consider introducing a similar mechanism for its HE graduates; this will be of particular importance in meeting labour market demand within the agri‑food sector.
Insofar as HE graduates are concerned, the main employability performance metric is the Higher Education Statistics Agency (HESA) Graduate Outcomes survey, which is currently in development. Employment in and of itself should not be regarded as a satisfactory outcome; instead, effective employment should be measured using a range of composite employment metrics, potentially including salary levels, student satisfaction surveys, and standard occupational classification (SOC). This latter measure would also contribute to the Programme for Government Outcome 6 (“We have more people working in better jobs”), which has as an indicator, “the proportion of local graduates from local institutions in professional or management occupations or in further study six months after graduation”. The specifics of how graduate employment outcomes could be compositely measured would be too detailed for inclusion within this report; Northern Ireland may, however, wish to consider a follow-up report with the OECD on a future funding model.
In the long term, Northern Ireland may wish to consider introducing a similar funding contingency for FE graduates based on employment outcomes, as well as aligning its HE and FE graduate tracking exercises, in order to provide a more consistent approach to measuring employment outcomes. However, in the short term, it is considered more valuable to undertake some remedial intervention on the FE graduate tracking survey – the FE College Leavers Report. The response rate to this survey is currently under 20%; it would therefore be inappropriate to use its results to track FE graduate progress into occupational sub-categories. As a first step, therefore, there would be greater value in reviewing the FE College Leavers Report to address the low response rate; this should include a review of its aims and methodologies, as well as consideration of increased marketing of the survey, making its completion “contractual” for students, examining how the survey is undertaken and how its results are analysed.
Box 2.6. Relevant international examples: Increasing alignment between education provision and labour market demand
Higher education funding models: Examples from Poland and the Slovak Republic
Poland has recently introduced reforms to funding and quality assurance systems in professional HEIs to improve incentives for monitoring graduate employability. Before the reforms in the funding formula, professional HEIs received core funding based on student enrolment and staff costs (80%), scientific activity (10%) and internationalisation (10%). Under the new regime, professional HEIs will continue to receive the majority of their core funding on the basis of student enrolment and staff costs (90%), with the remainder received on the basis of the employment rate of their graduates (5%) and external income generated (5%).
The Slovak Republic has introduced changes to its HE funding formula to better reflect labour market demand. From the 2016/17 academic year, certain HE subjects with low labour market demand have received 10% less funding per student, while other subjects with high labour market demand have received 10% more funding per student.
Source: OECD (2019[45]), OECD Skills Strategy Poland: Assessment and Recommendations, https://doi.org/10.1787/b377fbcc-en; OECD (2020[46]), OECD Skills Strategy Slovak Republic: Assessment and Recommendations, https://doi.org/10.1787/bb688e68-en.
Recommendation for improving the alignment between education provision and labour market demand
1.7. Introduce funding model reforms to ensure a proportion of grant funding is conditional on graduate employment outcomes. For HEIs, a proportion of the grant allocated by DfE should be made contingent on employment outcomes from the HE graduate tracking survey. While less impactful, DAERA may also wish to consider implementing a similar funding mechanism for HE graduates from CAFRE. Employment in and of itself should not be regarded as a satisfactory outcome; instead, effective employment should be measured through a range of composite metrics, including salary levels, student satisfaction surveys, and SOC of graduate employment. In the longer term, Northern Ireland may wish to consider introducing a similar funding mechanism for FE graduates, as well as aligning the HE and FE graduate surveys. However, in the short term, there should be a review of the FE College Leavers Report to increase its response rate. This review would also allow for consideration of how to define “economically relevant” within the broad and heterogeneous FE provision.
Facilitating improved interaction between education/training providers and employers
Education and training programmes should aim to provide the skills for jobs or careers, whether those skills are specific to a particular sector or transferable across the labour market. These skills benefit employers directly. Therefore, if skills provision is to be effective, it needs to be based on a systematic assessment of employers’ needs, both for current and future labour markets.
There are numerous skills employer engagement forums and bodies in Northern Ireland. Employer representative bodies include the Northern Ireland Chamber of Commerce, the Confederation of British Industry (CBI), and the Federation of Small Businesses (FSB). Matrix is the Northern Ireland Science Industry Panel; a business-led expert panel that advises government, industry and academics on the commercial exploitation of research and development (R&D) and science and technology. Sector Skills Councils (SSCs) have also provided a platform for employers to articulate their skills training needs; however, recent changes to the SSC funding structure has resulted in only a few remaining. Through the Careers Advisory Forum (CAF), the government develops strategic and local partnerships to better understand the employability skills, qualifications and attributes needed by employers, with an emphasis on facilitating better links between schools, colleges, local businesses and local councils. In total, there are upwards of 160 employer engagement programmes operating at both regional and local council levels (OECD, 2019[47]). Queen’s University and Ulster University also have dedicated employer engagement units, as do the FECs for business development support.
Economy 2030 highlights the role of the Apprenticeships/Youth Training Strategic Advisory Forum (SAF) and Sectoral Partnerships in bringing employers, FE colleges, the universities and other key stakeholders together to ensure provision meets the needs of employers and the wider economy (DfE, 2017[9]). Sectoral Partnerships are led by employers who are knowledgeable about the skills needs of their particular sector; there are 6 sectors currently included in these partnerships, with plans to develop a further 11 partnerships by 2021.
Despite this breadth of engagement, there are indications that the interaction between employers and education and training providers could be further improved. For instance, surveys of Northern Ireland’s employers consistently report a lack of soft skills (flexibility, communication, punctuality, teamwork and leadership skills) as a barrier to employing young people, as well as a need for education and training systems to adapt curricula to rapidly changing labour markets (CBI, 2018[48]) (UK Government, 2017[7]). This point was reinforced by employer participants during the OECD Skills Strategy project, despite their also highlighting specific examples of effective practice.
Effective engagement is a two-way process; education and training providers cannot adequately respond to employers’ needs if those needs are not well articulated. For that to happen, employers need to engage with providers; yet smaller employers, in particular, expect only to be beneficiaries, but not influencers (OECD, 2019[47]). For Northern Ireland, the lack of effective engagement between employers and education/training providers can largely be attributed to the preponderance of small and medium-sized enterprises (SMEs) and micro businesses, who often have limited time to participate in the above forums.
SMEs and micro-businesses face specific barriers to engaging with training opportunities. In many cases, they lack a human resources function that can undertake strategic human resources planning and engage in the administrative requirements of an apprenticeship programme, for example, or facilitate other work-based learning. This is a critical point. Integrating necessary employability skills into curricula is a challenge for education and training providers. However, people undertaking education/training must have an opportunity to develop employability skills through some form of work experience. A recent survey of UK HE graduate employers revealed that two-fifths would be unlikely to recruit a graduate with no previous work experience, regardless of their academic achievements or the university they had attended (High Fliers, 2020[49]).
In vocational education especially, work-based learning provides on-the-job experiences, making it easier to acquire both hard skills using modern equipment and soft skills by working with people (OECD, 2010[35]). Employer willingness to offer workplace training signals that an educational programme has labour market value. In Northern Ireland, the majority of employers who do not currently offer apprenticeships (58%) refrain from doing so for structural reasons. In comparison, others (15%) do not engage due to the size of their business (UK Department for Education, 2017[50]).
Other OECD countries can offer interesting examples of employer engagement for Northern Ireland to consider (see Box 2.7). Norway, for example, uses a cluster approach to managing apprenticeship contracts with the government, using group training organisations to act as intermediary bodies. This shifts legal obligations and administrative burdens to these group organisations, who use economies of scale to offer a full suite of training services and support to SMEs. It also allows for flexible apprenticeship frameworks, whereby individual apprentices can work across firms within a sector or region, gaining several different workplace experiences. It can also increase incentives for employers to participate in training, as they do not have to employ the apprentice permanently.
Northern Ireland should make further efforts to build clustered networks/coalitions of employers within local areas or council regions, or based on sector demand (see Chapter 5 for further discussion of this point). Collaboration among employers is key to developing a common understanding of shared skills challenges while providing clearer directions to the government on how policies and programmes should deliver better results. Sectoral approaches to employer engagement foster co-operation between training providers and employers, while ensuring that occupational and qualification standards align with industry need. Northern Ireland may wish to re-visit and update the previous Success through Skills employer engagement plan.
Northern Ireland should examine its suite of skills training programmes for SMEs, especially apprenticeships, with the goal of providing customised support to these firms, which are often the hardest to reach. This could include the use of group training organisations, as in Norway, to provide centralised support to regional/sectoral clusters of employers in high-priority areas.
Box 2.7. Relevant national and international examples: Facilitating improved interaction between education/training providers and employers
Example from Northern Ireland
FECs are playing an increasingly important role in working with employers to develop programmes locally. One local employer interface initiative is the GET Engineering Cluster – an FEC/industry partnership that includes 76 local and international companies and South West College. The cluster meets monthly and has directly influenced the development of a suite of GOLD Level 3 and Higher Level Apprenticeships, along with an annual GET Engineering careers fair. This partnership has led to a system where the curriculum, provision and services provided by a regional FEC are aligned with the demands of the manufacturing sector.
Examples from Norway and Australia
In Norway, social partners participate as external members in the governing boards of domestic tertiary education institutions. The Universities and University Colleges Act stipulates that 4 out of 11 seats on each tertiary education governance board must be taken up by an external member (including industry representatives). In this way, social partners with close links to the labour market can contribute to decision-making processes related to the institution’s strategy for education, research or other engagement activities.
In Australia, industry reference committees (IRCs) provide advice to the Australian Industry Skills Committee to guide the development and review of training packages in vocational education. IRCs are volunteer bodies made up of industry experts from business, employers, trade associations, unions and training providers. With the support of sectoral skills organisations, IRCs gather intelligence about their industry sectors, which is used to inform the advice they provide, and to make sure that the national training system provides the qualifications, knowledge and skillsets that industry needs.
Source: OECD (2019[47]), Engaging Employers and Developing Skills at the Local Level in Northern Ireland, United Kingdom, https://dx.doi.org/10.1787/9789264311626-en; OECD (2018[51]), Higher Education in Norway, https://dx.doi.org/10.1787/9789264301757-en; OECD (2018[52]), Getting Skills Right: Australia, https://dx.doi.org/10.1787/9789264303539-en.
Recommendation for facilitating improved interaction between education/training providers and employers
1.8. Strengthen local networks among employers through a sectoral approach and by enhancing engagement of SMEs and hard-to-reach employers. Northern Ireland should make further efforts to build clustered networks/coalitions of employers within local areas or council regions, or based on sectoral demand. Northern Ireland may wish to re-visit and update the previous Success through Skills employer engagement plan. SMEs and micro-businesses face specific barriers to engaging with training opportunities. Northern Ireland should, therefore, examine its suite of skills training programmes for SMEs, especially apprenticeships, with the goal of providing customised support to these firms, which are often the hardest to reach. Recommendation 4.15 in Chapter 5 provides greater detail on the potential make-up and structure of such a network.
Opportunity 3: Reducing economic inactivity to minimise skills shortages
In addition to the preceding Opportunities, skills shortages can also be reduced by encouraging individuals who are currently out of the labour market to participate in it, or by preventing their exit in the first place. Since the 2008 financial crisis, most policy discussion in OECD countries regarding the labour market has centred on how to reduce high levels of unemployment. In the wake of COVID‑19, the focus of discussions will likely return to that issue, given the inevitable increase in the unemployment rate. However, across many OECD countries, a major policy issue is how to activate the large numbers of individuals who were outside of the labour market even before the COVID‑19 pandemic – people who are neither working nor seeking employment and who, as a result, have become “economically inactive” (see Box 2.8) (Ludwinek, 2017[53]).
High levels of economic inactivity can result in significant societal costs. For individuals, long-term dislocation from the labour market can be damaging for physical and mental health, and lead to feelings of social exclusion and isolation (OECD, 2010[54]). Working-age adults who are economically inactive are also more likely to be impoverished and are concentrated at the lower end of household income distribution (UUEPC, 2016[55]). Welfare spending, such as incapacity and disability benefits, consequently form a relatively large fiscal outflow for governments.
In contrast, higher employment levels reduce poverty risks, decrease public spending on benefits and promote individual well-being. Re-engaging economically inactive individuals would also bring wider benefits to the labour market. As discussed in Chapter 1 and earlier in this chapter, population ageing across OECD countries will see a proportional decrease in the working age population and an increase in the number of adults aged 65+, likely leading to a fall in labour supply. Facilitating the activation of skills of working-age adults who are economically inactive will, therefore, be an essential, long-term contribution to filling the drop in labour supply and ensuring sufficient tax revenues to support an older population (OECD, 2010[54]).
Box 2.8. Definition of the “economically inactive”
A person is economically inactive if he or she is not in the labour force, meaning not working or not available/looking for a job during the reference period. Measuring inactivity, in combination with traditional labour market indicators such as employment and unemployment rates, can help to assess labour market inclusiveness in a more comprehensive way. The inactivity rate is the proportion of inactive persons in the total population of the same age group. This indicator is the opposite of the labour market participation rate, which is the share of a population in an age group that is in the labour force. Within labour force surveys, the economically inactive are generally classified into the following categories: 1) students; 2) retirees; 3) people who take care of relatives; 4) people who have health issues or disabilities; 5) people who believe there are no jobs available; and 6) people who are not looking for a job for other reasons.
Note: Being retired refers to people who have decided to retire regardless of their age; it does not automatically include people who are above the retirement age. For example, older workers (i.e. people aged 55 and above) who are not in the labour force for health reasons would not fall into this category.
Source: ILO (2016[56]), Key Indicators of the Labour Market, https://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/publication/wcms_498929.pdf.
Despite its comparatively low rate of unemployment (see the Performance section), Northern Ireland continues to have a persistently higher rate of economic inactivity (see Figure 2.4) as well as an overall higher rate of people with no qualifications (15.8% in 2016) than other regions in the UK (IPPR, 2018[57]). The issue of low/no qualifications is especially stark among the economically inactive in Northern Ireland; over half (54%) of working age inactive people failed to achieve five General Certificate of Secondary Education (GCSE) grades A-C (NQF Level 2), compared with 24% of people who are in employment. In contrast, people with higher qualifications (NQF Level 6+) comprise a much lower proportion of the inactive (8%) (UUEPC, 2016[55]).
Figure 2.4. Economic inactivity rate in UK regions, 2007-17
Source: ONS (2019[58]), UK Labour Force Survey, www.ons.gov.uk/releases/uklabourmarketstatisticsjune2019.
In 2018, there were 318 000 economically inactive people of working age in Northern Ireland, accounting for over one-quarter of the working age population (27.2%), while the economic inactivity rate for the UK as a whole was 21.7%. Students and retirees account for 38.8% of all economically inactive people. Excluding these cohorts brings down the number of economically inactive people to 195 000 in 2018 (NISRA, 2019[59]). Working-age economic inactivity in Northern Ireland has consistently ranked the highest across all UK regions over the past 20 years (UUEPC, 2016[55]), suggesting that measures to facilitate the (re)integration of the economically inactive into the labour market require further consideration. At the time of writing, it is unclear the extent to which COVID‑19 will have an impact on Northern Ireland’s economic inactivity rate; however, given Northern Ireland’s comparatively high rate of inactivity, this remains a longer‑term issue that will still need to be addressed.
It is worth noting that, according to the most recent Labour Force Survey data, 53 000 of Northern Ireland’s economically inactive have stated that they want to work (NISRA, 2020[60]). Northern Ireland has in place a number of programme and policy interventions designed to contribute to the (re)activation of those who are inactive in the labour market (see Table 2.2).
Table 2.2. Unemployment and pre-employment schemes in Northern Ireland
Sources: Department for the Economy (2020[61]), “Employment and skills programmes and Careers Service” (Article), https://www.economy-ni.gov.uk/articles/dfe-programmes; nidirect (2020[62]), “Steps 2 Success” (Article), https://www.nidirect.gov.uk/articles/steps-2-success; nidirect (2020[63]), “Work experience programme” (Article), https://www.nidirect.gov.uk/articles/work-experience-programme.
This opportunity will consider the key inactive cohorts in Northern Ireland, as well as possible preventative measures, including the role of employers.
Assessing current measures to engage the economically inactive
The persistently high levels of economic inactivity point to the ineffectiveness of past policies to bring the relevant cohorts closer to the labour market. The importance of this point has already been recognised in Northern Ireland, as the draft Programme for Government and Economy 2030 both include specific objectives to reduce working-age economic inactivity (excluding students) (DfE, 2017[9]; NI Executive, 2016[64]).
The wide heterogeneity among the inactive population suggests that they face very different barriers to labour market re-integration; however, it should also be recognised that not all forms of inactivity are negative. The main sub-groups of the economically inactive are: students; those staying at home with caring responsibilities; early retirees; and adults with a disability or long-term illness (Ludwinek, Dubois and Anderson, 2017[65]). Students are expected to return to the labour market, and are investing in their human capital; such inactivity is a positive development for the economy. Similarly, retiring early is not necessarily problematic. Individuals may have had successful careers, saved prudently, and can afford to leave work early. Inactivity among retirees only becomes an issue when adults have lost their jobs and cannot find alternative work, being forced to retire with insufficient financial means (UUEPC, 2016[55]).
As such, recognising and understanding the barriers for the key “problematic” cohorts is critical for policy makers when designing labour market integration policies and/or initiatives. It is important to first understand whom these people are, their personal circumstances, their reasons for being inactive, if they want to work, and the barriers preventing them from gaining employment.
Evidence from national and international surveys suggests that considerable numbers of inactive people are interested in working (Ludwinek, Dubois and Anderson, 2017[65]). The proportions of inactive people wanting to work differ according to questions asked, the category of respondents and their country of residence. Furthermore, a subset of people who state they are unwilling to work has been shown to be disposed to work under more advantageous conditions. These may be financial inducements for work or skills training, but also work adjustments or broader institutional frameworks and attitudes. This situation is not unique to Northern Ireland; despite barriers to (re)entering the labour market, four out of five of all inactive groups across the EU indicate a desire to work at least part-time, and over half would like to work for over 32 hours a week (Ludwinek, Dubois and Anderson, 2017[65]).
Despite the heterogeneous nature of inactive cohorts, certain trends are apparent. For instance, low skill levels increase the likelihood of becoming, and remaining, economically inactive. In contrast, proximity to cities decreases the probability of remaining economically inactive (Barr, Magrini and Meghnagi, 2019[66]). Northern Ireland also has consistently witnessed a higher number of economically inactive women than men, with approximately three-fifths of those inactive identifying as women. Those aged 50-64 made up the largest proportion of those inactive, while the 25-34 age range had the smallest proportion (NISRA, 2019[59]).
There are a variety of reasons why adults are economically inactive. In addition to the previously mentioned overall high incidence of low qualifications, the proportion of the working age population who are inactive due to looking after family/home, due to study and due to retirement are higher in Northern Ireland than in the UK as a whole. In Northern Ireland, there are clear indications that men predominate the sick/disabled cohort, while women predominate those with family/home responsibilities (see Figure 2.5).
There are two key economically inactive cohorts in Northern Ireland that could benefit from greater support to enter into work. First, Northern Ireland has a large share of the economically inactive in long-term sickness or are disabled. While being sick or disabled were the most common reasons for economic inactivity in both the UK and Northern Ireland in 2018, it was cited as the main reason for inactivity at 6 percentage points higher in Northern Ireland (31.3%) than in the UK as a whole (25.4%), and this has historically been the most persistent reason given for not working or not looking for work. The long-term sick and disabled, among whom the key target group is people with work-limiting health conditions or disabilities, should be able to work with the right level of support and reasonable accommodations from an employer. Second, Northern Ireland should target those with family commitments, among whom the key groups are lone parents and carers who are currently in receipt of out-of-work benefits and would be better off in work but are unable to make the transition due to a lack of appropriate support and/or opportunities.
Figure 2.5. Reasons for economic inactivity in Northern Ireland (UK) by gender, 2018
Source: NISRA (2019[59]), Economic Inactivity in Northern Ireland, https://www.nisra.gov.uk/sites/nisra.gov.uk/files/publications/Economic%20Inactivity%20in%20Northern%20Ireland.pdf.
Northern Ireland has a decades-long history of seeking to tackle economic inactivity. However, the lack of significant progress in addressing the above suggests the need for a more strategic, evidence-based and targeted approach. Northern Ireland has yet to develop a specific strategy in this regard, however. In 2015, the former Departments for Employment and Learning (DEL) and Enterprise, Trade and Investment (DETI) developed Enabling Success (DEL; DETI, 2015[67]) – a strategy to reduce economic inactivity. However, funding to implement the strategy was never agreed by the Northern Ireland Executive, and it was therefore put into abeyance. DfC is, however, in the process of designing Employability NI – a new inclusive labour market partnership framework, which has reducing economic inactivity as one of its key policy drivers. This, therefore, provides Northern Ireland with an opportunity to give greater focus to reducing economic inactivity more strategically.
In order to inform the development of Employability NI, DfC commissioned research to assess the effectiveness of its previous disability employment support (IES, 2019[68]). The research points to some areas for improvement, with concerns being raised around how support is currently aligned and co‑ordinated. These concerns point to the need to establish a more accurate baseline position of provision, which could be undertaken via a mapping exercise of current support for the economically inactive. While the Intercultural Education Service’s recommendation was focussed on disability employment support, an effective mapping exercise would need to take a comprehensive, multi-partner approach, to include all support designed to encourage the different economically inactive cohorts into work or raise their skills levels. The results of the mapping exercise would then need to be translated into specific programme/support provision, which is directly aligned to Northern Ireland’s identified skills imbalances; i.e. it addresses both field-of-study mismatches as well as the specific softer employability skills required by employers. This implies the need for an exercise to gain a deeper understanding of the particular motivations of the two key economically inactive cohorts in Northern Ireland to ensure subsequent programmes are more effectively aligned with their needs. Any new measures would need to apply a differentiated approach, with specific types of support targeted at different groups of the economically inactive (see Box 2.9 for examples).
Box 2.9. Relevant international examples: Engaging the economically inactive
A multi-partner example from Australia: Regional Employment Trials Program
An example of a holistic approach is a multi-stakeholder-driven initiative called the Regional Employment Trials Program in Australia. The trial takes into account regional variations to help ensure that local economic opportunities are better promoted to Australians looking for work and employment services providers. In trial regions, employment facilitators work with regional development committees to enable local stakeholders to address employment issues. Regional development committees play a key role in the identification, assessment and promotion of projects to ensure they align with local needs. Stakeholders include local governments, employers, training organisations, not-for-profits, employment services providers and other community organisations able to provide employment and training-related opportunities and assistance to unemployed and economically inactive people. The trial delivers stronger connections between regional stakeholders, including employment services providers; tailored employment initiatives that meet local needs; improved awareness of local labour markets; and the potential for improved regional employment outcomes.
Support for people with a disability/caring responsibilities: Examples from Denmark, the Netherlands and the Czech Republic
The Flex-job disability scheme in Denmark requires a fundamental conceptual shift in disability assessment. Disability assessment is now focused on what a person can do, rather than their loss of capacity; specifically, it relates to the extent to which a person can carry out a subsidised job (flex-job). A disability benefit is only granted where capacity is assessed to be permanently reduced to the extent that a flex-job cannot be performed, and participation in rehabilitation would not help restore this capacity. In determining capacity, a comprehensive individual resource profile is put together that includes measures of health, social and labour market proximity criteria.
Another example comes from the Netherlands, in Amsterdam, where the municipality introduced “perspective jobs” (perspectiefbanen), the aim of which was to help 115 long-term inactive people find employment. To minimise the risk of competition, the scheme targeted jobs where labour market shortages were expected – mainly in construction, technical jobs and information and communication technology (ICT). Employers receive a EUR 8 500 subsidy per year for every person employed under this scheme for a maximum of two years, and a one-off EUR 3 000 bonus if the temporary job is turned into a contract of at least six months.
In the Czech Republic, “children’s groups” (a form of childcare) were introduced to enhance the work‑life balance of women, and help them re-enter the labour market following maternity leave. These groups have been designed for pre-school children from the age of one. They can be established by employers, churches, local administration bodies, non-governmental organisations (NGOs), universities and other relevant organisations, and are financed by the providers. The costs are partly tax-deductible.
Source: Australian Government (2020[69]), “Regional Employment Trials Program” (Article), www.employment.gov.au/regional-employment-trials-program; OECD (2009[70]), “Sickness, Disability and Work: Keeping on Track in the Economic Downturn” (Report), https://www.oecd.org/employment/emp/42699911.pdf.
Recommendations for assessing current measures to engage the economically inactive
1.9. Undertake a mapping exercise of current service provision for the economically inactive, to improve efficiency and effectiveness, and align interventions with skills needs. The mapping exercise should identify potential gaps in provision, duplication and over-provision of services or initiatives, as well as quantify current levels of spending. The exercise should include all disability support programmes operated by DfC, as well as all skills programmes and support in place by DfE and DoH, and all separate support programmes run by local councils, or the voluntary and community sector. The outcomes of the exercise should then inform the new range of programme support offered under Employability NI, which should itself be tailored to be directly aligned to Northern Ireland’s identified skills imbalances, both mismatches and shortages. This would ultimately lead to: a reduction in duplication; greater alignment between skills interventions and employability support; the sharing of best practice; and a clearer articulation of entry points to available support.
1.10. Undertake a targeted engagement exercise to better understand the barriers facing the economically inactive, with a view to better directing support and developing skills in line with the identified need. International research points to the need for a context-specific understanding of policies to address economic inactivity. If Northern Ireland is to develop effective support interventions for the economically inactive, then this implies a need to better understand their specific needs and barriers. DfC should, therefore, take the lead in undertaking a rigorous engagement exercise with the two key economically inactive cohorts (those who are sick/disabled, and those who have family/home responsibilities), to gain insights into the specific barriers they face. Subsequent person-focused programmes and support should then be developed, aligned to the specific identified skills needs of the individual, and be directly aligned to Northern Ireland’s specific skills imbalances.
Involving employers in reducing economic inactivity
Activating the skills of the above two main inactive cohorts will require a multi-agency approach. However, providing incentives for individuals to return to work will be ineffective if employers either do not require the specific skills of those workers or they lack incentive themselves to hire from economically inactive cohorts. Research suggests that employers in Northern Ireland are insufficiently incentivised to hire workers from the main inactive cohorts (UUEPC, 2016[55]). Employers must, therefore, be key actors in the development of remedies to this policy challenge.
It is, therefore, encouraging that, in developing Employability NI, DfC has committed to improving the engagement of Northern Ireland employers with employability and skills support provision. As part of this service, DfC has stated that it will: challenge employers on their recruitment practices, including encouraging greater flexibility in employment terms and conditions; build employers’ awareness and uptake of available support provision; and deliver tailored packages of support to meet their recruitment needs. This latter point implies the need for a more accurate understanding of employer requirements from any such provision, to better ascertain the level/type of skills required; current barriers to recruiting workers with caring responsibilities, or long-term illness or disability; and the level/type of support required to assist with this transition to work. Such an exercise should take into account the size, sector and region of the employers to allow for more targeted remedial intervention, focussing on employers operating within sectors with the highest levels of skills shortages.
As things stand, there is no evidence that Northern Ireland employers are incentivised to participate in tackling economic inactivity; a point confirmed by OECD Skills Strategy participants. For many employers, recruiting a disabled or previously long-term sick worker can represent a risk, as does recruiting someone who has been removed from the labour market for a significant period due to family/caring responsibilities (OECD, 2010[54]). Across OECD countries, there is a variety of examples of employer-targeted tools to encourage the recruitment of people from different economically inactive cohorts. These range from temporary social security reductions/exemptions (Belgium); compensation for employing older workers with a high risk of illness (the Netherlands); allowances for hiring people with a disability (Slovenia); and wage subsidies for hiring long-term unemployed or people with a disability (Australia) (OECD, 2010[54]).
On the other hand, successful employer-targeted interventions have been identified that provide incentives/requirements to create work environments that support, rather than compromise, the physical and mental health of workers. Such support provides training and work-based adjustments to prevent health conditions from deteriorating, thereby ensuring that workers remain connected to the labour market (OECD, 2009[70]).
In addition, measures that facilitate the return of sick employees could act as preventative contributions to a reduction in economic inactivity. Across OECD countries, data indicates a strong statistical correlation between employee sickness absence levels and subsequent disability benefit inflow rates (OECD, 2009[70]). Analysis of Northern Ireland’s Labour Force Survey data for inflows into “long-term sickness/disability” indicates that approximately one in five of these people were previously “temporarily sick or injured”. Of those Northern Ireland workers who were temporarily sick or injured, less than 40% had returned to employment within a year. The majority remained classified as either long-term sick/disabled or temporarily sick/injured (NISRA, 2018[71]). This comparatively low return rate to the labour market implies a need for employers to assume greater responsibility for facilitating the return to work for sick employees, preventing their longer-term transition into inactivity.
Alongside any curative, interventionist approaches to tackling economic inactivity, particularly in relation to the long-term sick/disabled, Northern Ireland should also consider a preventative, safe and healthy workplace approach (see Box 2.10 for examples). While the ultimate goal is for all Northern Ireland employers to have in place healthy workplaces, initial, targeted pilots could focus on employers within those sectors where there are the highest levels of skills shortages.
Box 2.10. Relevant international examples: Involving employers in reducing economic inactivity
Long-term sickness prevention: The Netherland’s Gatekeeper Law
At the beginning of the 1980s, the Netherlands had some of the highest sickness and disability rates in the world, leading to an evolving programme of legislative reform. Laws were introduced that sought to increase employer and employee involvement in reducing sickness absence in order to prevent longer‑term illness from leading to economic inactivity. Consequently, greater responsibility for managing sickness absence was transferred from the state onto the employer. The employer is required to pay sick pay for the first two years of illness, during which time both the employer and the absentee worker must do all they reasonably can to improve the individual’s chances of returning to work. The employer must implement plans for rehabilitation and make workplace accommodations. If the employer has no suitable work for sick employees, s/he must help them find work with another employer. If the employer has failed to do his/her best to reintegrate an employee, s/he will be required to pay that employee’s salary for up to a further year. Evaluation studies have shown the law to be successful, with a decline in long-term sickness and decreased inflows into disability benefits.
Long-term sickness prevention: An example from Finland
To prevent sickness absenteeism, work injuries and other health problems at work, Finland has placed considerably greater emphasis on employers’ legal obligations to purchase private or community-run preventive Occupational Health Services and create healthy working environments. These services help ensure regular monitoring in workplaces, action programmes assessing and minimising workplace risks, early detection of reduced work capacity, and other strategies to prevent inflows into disability. Public subsidies are available to support employers.
Source: OECD (2007[72]), “Sickness and Disability Schemes in the Netherlands” (Country Memo as a Background Paper for the OECD Disability Review), https://www.oecd.org/social/soc/41429917.pdf; OECD (2009[70]), “Sickness, Disability and Work: Keeping on Track in the Economic Downturn” (Report), https://www.oecd.org/employment/emp/42699911.pdf.
Recommendations for involving employers in reducing economic inactivity
1.11. Undertake a formal employer engagement exercise to identify current barriers to recruiting specific economically inactive cohorts. The exercise should seek to gain a more accurate understanding of employer requirements from any provision under Employability NI. It should identify (according to employer size, sector and geographical region) what additional support, advice, or finance would be required to increase the recruitment of people with caring responsibilities and/or long-term sickness or disability. The outcomes of the exercise should then inform any new range of employer-targeted support and incentives under Employability NI, which could be provided to employers on a cluster basis. Employer support/incentives should be directly in line with those sectors with the highest levels of identified skills shortages and prioritised accordingly.
1.12. Encourage healthier workplaces in order to prevent inflows into disability benefits, particularly in sectors where there are skills shortages. In tandem with any remedial interventions, Northern Ireland should also introduce measures to encourage employers to develop healthier workplaces. Measures could include legislative/regulatory requirements for employers to better manage sickness absence in order to support and encourage sick workers back to the workplace. Alternatively, they could include support and guidance on both putting in place preventative measures to avoid or minimise staff sickness, as well as implement effective sickness absence management processes. Any pilot initiatives in this regard should focus on those sectors where there are identified skills shortages.
Opportunity 4: Improving labour mobility to meet skills demand
As noted in Chapter 1, it is anticipated that Northern Ireland will be impacted by a decline in the working age population during the coming decades (NISRA, 2019[5]), as will be the case across many EU member states (Eurostat, 2019[73]). This phenomenon will likely generate a decline in labour supply and economic growth unless countries are able to mobilise under-used labour resources (see Opportunity 3 of this chapter), as well as promote faster technological progress and productivity growth (as discussed in Chapter 4). At the time of writing, it is unclear what impact COVID‑19 will have on labour supply in Northern Ireland. However, it is anticipated that in the short term, the rate of unemployment will increase, in turn generating increased levels of labour supply. Nevertheless, in developing a resilient, multi-year skills strategy, there is a requirement to ensure sufficient adaptability in a country’s skills structure to allow for appropriate responsiveness when the labour market returns to a tightening position.
Beyond employment and education policy responses to this phenomenon, migrant labour policy can also contribute to the resolution of skills imbalances, by regulating the entry of people and their skills into a country. Labour and skills shortages depend significantly on the changing nature of the demand for particular skills and the extent to which existing sources of supply can meet this demand. While migration can make an important contribution to labour force growth, its role in compensating for the effects of population ageing will depend on the extent to which a country can successfully align migrants’ skills with local labour needs. Consequently, selecting and attracting migrant workers with the required skills to reduce identified shortages has emerged as a key policy objective for many countries, in combination with maximising the skills use of immigrants who are already in a host country. To achieve this, however, implies an improved adaptation of labour migration management systems in order to more effectively meet employers’ needs (OECD; European Union, 2014[74]).
Overall responsibility for immigration policy is not devolved within the UK and remains the sole preserve of the UK Home Office. Northern Ireland is therefore limited in its ability to set its own policies to attract workers from abroad in line with local skills needs, as responsibility for work and study visas, and the conditions attached to those visas, remain reserved with the UK Government. However, the Northern Ireland Assembly does have responsibility for legislating on areas that will be impacted by UK immigration policy, such as employment rights, education and skills. It would be in Northern Ireland’s interest to ensure greater alignment between skills policies for which it has devolved responsibility, and how those policies will be impacted by UK-level immigration policy.
As things stand, workers from outside of the European Economic Area (EEA) who want to enter the UK for work are subject to a points-based system consisting of five tiers (see Table 2.3). Among non‑EEA workers, Tier 2 workers represent the largest category of inflows for work in the UK (Migration Observatory, 2019[75]). Tier 2 immigration allows employers to bring skilled workers with a job offer into the UK from outside of the EEA, provided they meet minimum income thresholds. The minimum skill level of migrants admitted through Tier 2 has been progressively tightened over the years, and now requires a higher education graduate degree (NQF Level 6) (OECD, 2017[76]).
Table 2.3. UK points-based system for non-EEA migrants
Note: Tier 3 has never been opened by the UK Government due to the strong supply of workers from the EEA within this category. Tier 5 permits workers for a limited period of time to satisfy primarily non-economic objectives.
Source: UK Government (2020[77]), “Work in the UK” (Article), https://www.gov.uk/browse/visas-immigration/work-visas.
The two main visas issued under Tier 2 of the UK system are the General Visa and the Intra-Company Transfer Visa. The Tier 2 General Visa is intended for workers who have a skilled job offer, while the Intra‑Company Transfer Visa is for employees of a multinational company who are being transferred to that company’s UK branch. Tier 2 vacancies must be advertised for 28 days to UK workers before they can be offered to a Tier 2 worker, unless the job is an Intra-Company Transfer, or is on the Tier 2 Shortage Occupations List (SOL). As things stand, there is a SOL for the UK, and a separate regional SOL for Scotland. Northern Ireland does not yet have its own regional SOL; however, one has been agreed in principle, albeit with no variation from the UK SOL in terms of the specified occupations.
The evidence indicates that, in line with the rest of the UK, the levels of inward migration have been decreasing in recent years. In the 12 months ending mid-2017, 22 100 people came to Northern Ireland to live (7.3% less than in the year ending mid-2016). More than half of the people concerned (11 300; 51.2%) were from outside the UK, while the remainder (10 800; 48.8%) were from the rest of the UK. The number of people who came to Northern Ireland to live from outside the UK during this period (mid-2016 and mid‑2017) fell by 13% (1 700). In the same period, the number of people arriving to live in Northern Ireland from the rest of the UK decreased by less than 50 people (0.4%) (NISRA, 2018[78]).
In terms of the skills profile of migrant workers to Northern Ireland in recent years, between 2004 and 2018 there was an increase of 22 000 (to 32 000 in 2018) non-UK-born people aged 16-64 living and working in Northern Ireland in higher-skilled jobs. During the same period, there was an increase of 29 000 (to 36 000 in 2018) non-UK-born people aged 16-64 living in Northern Ireland and working in lower-skilled jobs (NISRA, 2018[71]). In Northern Ireland, non-EU workers are more likely to work in high-skilled jobs than EU workers. This is due in part to EU free movement allowing its citizens to work in any occupation, while non‑EU citizens must qualify for work visas that often have specific skill requirements attached to them (Migration Observatory, 2018[79]). Over the past decade, the majority of people who have moved to Northern Ireland for work have been from EU countries. However, the EU share has dropped since the 2016 referendum on the UK’s exit from the EU (Migration Observatory, 2019[75]). This points to the current UK immigration system, in tandem with the free movement of EU workers, providing Northern Ireland employers with access to a broad range of skilled migrant labour.
Of the international inward migration to Northern Ireland, the data indicates that the tendency is for a higher proportion of this to be EU migration, with a more limited proportion coming from outside the European Union/European Economic Area. In 2018, 65% of migrant workers in Northern Ireland were from EU member states, whereas for the UK as a whole, this figure was 40% (NISRA, 2018[71]). What this points to is the potential, following the UK’s exit from the EU, for any restrictions on inward EU migration within a future UK immigration system to disproportionately impact Northern Ireland in comparison to other regions of the UK. This is reinforced by the fact that only 1.4% of all migrants who have come to the UK settled in Northern Ireland, compared to 36.8% who settled in London, for example. Northern Ireland, therefore, ranks lowest of the UK regions as a destination for migrants (Migration Observatory, 2019[80]). What this suggests is that any further restrictions on EU labour inflows to the UK, combined with Northern Ireland’s dependence on this source of labour until now, will likely result in further labour shortages which will then need to be addressed.
Ensuring that Northern Ireland’s specific regional skills needs can be met through migrant labour
For the past number of decades, the free movement of people within the EU, coupled with the fact that migration policy remains a reserved matter within the UK, has meant that Northern Ireland has been constrained in its ability to adopt a region-specific, strategic approach to migration. Nonetheless, the above evidence indicates that Northern Ireland’s skills profile has benefited significantly from the various skills levels of inward migrant labour.
There is momentum for Northern Ireland to increase its efforts to benefit from migration in the context of current and future skills shortages. There was an unambiguous view expressed by participants in the OECD Skills Strategy project that the return of the Northern Ireland Assembly presented a clear opportunity for migration-related skills issues to be considered more strategically. In addition, depending on the UK’s future immigration policy, there is potential for Northern Ireland to be negatively affected more than any other UK region. If Northern Ireland is to achieve its economic ambitions of becoming a globally competitive, advanced small economy (DfE, 2017[9]), then recognition of the impact of region-specific migrant skills should form a key part of this.
In 2018, the UK Home Office published a White Paper which set out its proposals in respect of a skills‑based immigration system (UK Government, 2018[81]). As part of this process, the UK Government committed to engaging with the UK Devolved Administrations to understand their particular circumstances, as well as ensure that UK employers have sufficient flexibility in terms of access to labour supply. To this end, DfE and the wider Northern Ireland Civil Service (NICS), in the absence of a local Assembly, provided the UK Government with evidence across a range of migration-related issues, including: the applicability of migrant salary thresholds for Northern Ireland; the importance of access to skills to achieve Northern Ireland’s economic ambitions; the need for an effectively navigated migration system; the importance of Northern Ireland’s land border with the Republic of Ireland; and the social impact of immigration (DfE, 2019[82]). To inform its White Paper, the UK Government also commissioned the Migration Advisory Committee (MAC) to produce a number of reports regarding: the appropriate level and design of salary thresholds for migrant workers; the possible role of a points-based system; the composition of the SOL; and the economic and social impact of international students in the UK. Again in the absence of a Northern Ireland Assembly, the NICS provided inputs to each of these commissions to reflect the particular circumstances of Northern Ireland (NI Executive Office, 2019[83]) (NI Executive Office, 2019[84]) (DfE, 2018[85]).
The recent UK Government announcement on its plans for a new points-based immigration system (UK Government, 2020[86]) states its intention to end free movement and introduce a points-based system to attract high-skilled workers. This includes a salary threshold of GBP 25 600 for high-skilled workers, and confirmation that there will not be an entry route for lower-skilled workers. In light of the lower salary levels in Northern Ireland compared to the rest of the UK (NI Executive Office, 2019[83]), and its position as the UK region with the greatest difficulty attracting migrant workers, there is potential for Northern Ireland to be impacted more significantly than other UK regions in its future as a result of changes in UK migration policy; a point that reinforces the suggestion of the need for an approach to migration which takes into account regional needs.
In the absence of an agreed Executive-level approach to migration and how that can help reduce skills imbalances, it is recommended that the remit of the current cross-departmental group for immigration is broadened, to also examine labour mobility and develop a more strategic, regional approach to migration (see the example in Box 2.11). Considerations emerging from that approach should inform the Northern Ireland Executive’s thinking on how it could best influence UK immigration policy, to better accommodate Northern Ireland’s regional needs.
There are a number of key considerations that should be factored into such a strategic approach. These should include: the enhanced use of skills assessment and anticipation tools, especially the regional-level Skills Barometer to identify local council-level skills needs; the interdependencies between a regional migration approach and the Northern Ireland Industrial and Skills strategies; the unique position of Northern Ireland within the UK of having a land border with the EU, and the potential impact of this on the region’s competitiveness and ability to attract and retain skills talent; consideration of the development of a Northern Ireland SOL; consideration of how wage differentials between Northern Ireland and other UK regions are taken into account within those elements of UK immigration policy that are linked to income thresholds; consideration of new business models to attract skilled workers who can be sourced globally via technology solutions for virtual work; consideration of how post-study visas for international students could be maximised in order to encourage the retention of talent; and consideration of how to maximise the skills of migrants who are already living in Northern Ireland. While some of this work has already been undertaken by the NICS, this was largely done in the absence of a functioning Northern Ireland Executive. An agreed Executive-level approach has greater potential to influence UK immigration policy.
Within such a regional migration approach, there are a number of specific initiatives that Northern Ireland should undertake independently (and are examined in due course). Other matters, however, will require consideration by the Northern Ireland Executive on how it can best influence any future UK migration policy, to take account of Northern Ireland’s regional needs.
Box 2.11. Relevant international example: Regional inward migration strategy
Example from the Copenhagen Region
The Copenhagen Region, formally called Greater Copenhagen (or Øresund Region), is a metropolitan area comprising 79 municipalities of eastern Denmark and southern Sweden. The region aims to keep Greater Copenhagen competitive, attractive for the settlement of international investors and businesses and at the forefront of the Scandinavian scene as the largest regional recruitment base of talent. In 2014, Copenhagen launched the Ambitious Talent Strategy for the Copenhagen Region 2014‑17. The strategy, involving the participation of 12 group members (including mayors, representatives of universities and businesses), is part of the Copenhagen Talent Bridge project, which aims to contribute to higher regional growth by attracting and retaining young international talent. It is built upon ten initiatives including: support for regional SMEs to connect with international talent; targeted services to attract back international talent who previously lived in the region but had left; and a number of services to make the region more attractive to high-skilled migrants.
Source: Cavallini, S. et al. (2018[87]), Addressing Brain Drain: The Local and Regional Dimension, https://cor.europa.eu/en/engage/studies/Documents/addressing-brain-drain/addressing-brain-drain.pdf.
Recommendation for ensuring that Northern Ireland’s specific regional skills needs can be met through migrant labour
1.13. Better meet Northern Ireland’s skills needs through a more regional approach to attracting skilled migrants, including through broadening the remit of the current cross-departmental migration strategy group to examine labour mobility. The low levels of inward migration to Northern Ireland in comparison to other parts of the UK suggest that migration may not have been considered sufficiently strategically to address regional skills needs. In order to ensure Northern Ireland can have continued access to mid and higher-level skills, there is a need to develop a more strategic, regional approach to migration. There are a number of key considerations that should be factored into such a strategic approach, as mentioned above. Those considerations should inform the Northern Ireland Executive’s thinking on how it could best seek to influence UK immigration policy, to better accommodate Northern Ireland’s regional needs.
Improving the appeal of Northern Ireland to targeted migrants
Improving the responsiveness of the education system (see Opportunity 2) and activating the economically inactive (see Opportunity 3) may be longer term interventions to reduce skills shortages. However, attracting skilled workers from abroad (both foreign and returning Northern Ireland workers) can respond to more immediate labour market demands.
As demonstrated, Northern Ireland has experienced a historical decline in the inflow of workers from abroad. Furthermore, a recent analysis of the 2011 Census (DfE, 2018[88]) indicates that the foreign population in Northern Ireland (when people from the rest of the UK are excluded) represents only 6.5% of the total Northern Ireland population. This compares with an average of 9.1% across all OECD countries. This indicates both an opportunity and a need for Northern Ireland to increase its efforts in attracting and retaining workers from abroad, in line with the identified need for a higher-skilled workforce. There was general recognition among individuals consulted during the OECD Skills Strategy project of the need for improved inward labour mobility. Among certain employers, there were significant levels of concern of how to reduce skills imbalances in the short term, if access to previously available migrant labour is severely curtailed due to the UK’s exit from the EU.
There have been a few previous efforts in Northern Ireland to encourage either the return of highly skilled Northern Ireland emigrants or to seek to attract skilled workers from elsewhere. In 2007, the former DEL initiated the C’Mon Over campaign, which targeted highly skilled people working or studying outside Northern Ireland to fill skills shortages in the region. However, the campaign was short-lived; it was suspended in 2010 due to the recession and was never revived. No assessment was undertaken to gauge its effectiveness.
The successful attraction of high-quality workers to a country, both foreign and returning natives, is more often than not influenced by an effective combination of “pecuniary” and “non-pecuniary” drivers (Tuccio, 2019[89]). Pecuniary drivers include employment and career progression opportunities along with tax incentives and the overall cost of living. Non-pecuniary drivers include the relative quality of life, the environment for raising a family and the inclusivity/welcoming nature of the host nation (Tuccio, 2019[89]). In recognition of this latter point, France has been developing indicators that measure the accessibility of key public services (health, education), leisure opportunities (sports, tourism, culture) and commercial services (food and other retail stores) (OECD, 2016[90]). Replicating this could help Northern Ireland policy makers assess progress against making local areas more attractive to migrant workers.
For foreign workers, the inclusivity of a destination country can be one of the more decisive factors in choosing to move there (Tuccio, 2019[89]). While the perceived inclusivity of a country can depend on prevailing cultural attitudes, it can also be positively influenced by migration policies such as the speed of hiring procedures, the worker’s right to be accompanied by family members and the rapid acquisition of permanent residence (OECD, 2019[2]). As part of a regional approach to migration, the migration strategy group should consider whether to introduce targeted pecuniary measures, as well as the marketing of non‑pecuniary incentives, to encourage high-skilled workers in specific areas of labour market demand. Pecuniary measures could include one-off payments (e.g. in the Slovak Republic), whereby university‑educated experts who have been working abroad for more than ten years receive a lump sum upon being hired for a vacancy within a public institution. Alternatively, they could include a reduced tax rate on labour income for a fixed period of residency (e.g. in Denmark). Many such pecuniary measures are currently outside the authority of Northern Ireland, and the international evidence on their effectiveness is limited. Nevertheless, they could form part of political-level discussions between Northern Ireland and the UK Government, on how any such local measures might be accommodated within a future UK migration policy.
One aspect of any future regional approach to migration should be a greater focus on increasing the profile of non-pecuniary incentives for migrants, and the development of indicators to measure Northern Ireland’s performance in these areas. The migration strategy group should also consider offering a full range of integration services, including better-facilitated recognition of qualifications (e.g. in Austria), migrant counselling services (e.g. in Germany), civic integration (e.g. in Belgium) and subsidised vocation-specific language training (e.g. in Portugal). The migration strategy group will need to ensure that local councils are involved in this process, and afforded sufficient capacity to deliver strong integration strategies at the local level (see Chapter 5 for further discussion on such structures).
Barriers to migrant labour mobility may also include a lack of information on employment opportunities, language needs, housing and transportation costs (IPPR, 2018[57]). Countries can, therefore, provide a range of local services to facilitate the integration of foreign workers and their families. Dedicated information sources can be valuable tools in removing barriers to migration, by providing information on skills needs and job opportunities, online language training (especially to meet vocation-specific language needs), as well as by highlighting non-pecuniary drivers that would make a country an attractive place to work and live (OECD, 2019[2]). Northern Ireland, however, does not offer a comprehensive information source that provides such practical information for foreign workers, unlike other countries such as Estonia, Lithuania or Sweden (see Box 2.12). The nidirect portal does include a dedicated page for migrant workers; however, this focusses mainly on employment rights with some additional information on qualification recognition, which falls short of the best practice evidenced in other countries. The Invest NI website does provide some good customer-facing information on the non-pecuniary benefits of moving to Northern Ireland. However, given the focus of Invest NI’s work, this information does not target the individual skilled worker abroad and exists in isolation from other migrant-focussed information.
As part of the development of a regional approach to migration, the migration strategy group should, therefore, introduce an improved outward-facing online source that comprises information on job vacancies; regulated occupations; and recognition of foreign qualifications, for example, as well as the non‑pecuniary benefits of living in Northern Ireland. The migration strategy group will need to consider whether to expand the current nidirect portal information and then merge it with existing Invest NI information. The development of the information source will also need to be accompanied by an international marketing campaign that targets countries with higher incidences of skilled workers who could potentially fill skills shortages and directs them to the relevant information.
Box 2.12. Relevant international examples: Improving the appeal of countries targeted to migrants
Improving the appeal of a country to attract migrant workers Information portals: Examples from Sweden, Estonia and Lithuania
In Sweden, an online portal provides up-to-date information for foreign workers regarding skills needs and job offers according to region; online language training; regulated occupations; and recognition of foreign qualifications, as well as offering online applications for work permits. All of this information is available in a variety of languages.
Estonia has developed an official portal with the main purpose of attracting foreign workers to the country. Similar to Sweden’s portal, it provides information on specific job offers as well as on visas; housing; healthcare; taxes; and other topics of interest to foreigners who are considering moving to Estonia.
Lithuania has developed the Work in Lithuania portal, which seeks to encourage professionals living abroad to build their careers in Lithuania. The website, which is available in English, provides information on job offers; success stories of people who have already moved there; and information about living in Lithuania.
Services in support of migrant worker integration: Examples from Portugal and Germany
In Portugal, vocation-specific language courses are part of the Portuguese for All training scheme, which is available at no cost to migrants. Vocation-specific language courses are available for retail, hospitality, beauty care, civil construction and civil engineering. Vocation-specific language courses are also part of the Intervention Programme for Unemployed Immigrant Workers.
In Germany (Frankfurt), an outreach programme that targets women with higher qualifications (Start, Change, Get Ahead) assigns highly skilled migrant women a personal mentor. For one year, the mentor shares knowledge, experience and networks with the migrant. In concert with mentoring, the programme provides professional counselling, upskilling, intercultural training and skills recognition support. Within one year, approximately half of the participants managed to obtain a job aligned with their qualifications.
Source: Swedish Institute (2020[91]), “Working in Sweden” (Article), https://sweden.se/collection/working-in-sweden/; Enterprise Estonia (2020[92]), “Work in Estonia” (Article), https://www.workinestonia.com/; Invest Lithuania (2020[93]), “Work in Lithuania” (Article), https://workinlithuania.lt/homepage/; OECD (2019[2]), OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/9789264313835-en.
Recommendations for improving the appeal of Northern Ireland to targeted migrants
1.14. Increase the attractiveness of Northern Ireland for high-skilled migrants, through a mix of pecuniary and non-pecuniary measures within a regional approach to migration. As part of the development of a regional approach to migration, the migration strategy group (mentioned in Recommendation 1.13) should consider whether to introduce targeted pecuniary measures, as well as the marketing of non-pecuniary incentives, to encourage high-skilled workers in specific areas of labour market demand. Such incentives should include information on local skills needs and job opportunities, as well as online language training and the wider benefits of living and working in Northern Ireland. In marketing non-pecuniary measures, Northern Ireland should also develop indicators to measure its performance in these areas. The migration strategy group should also consider offering a full range of integration services, ensuring that local councils are involved in this process, and afforded sufficient capacity to deliver strong integration strategies at the local level.
1.15. Develop a comprehensive online information source for migrant workers, to advertise employment opportunities in Northern Ireland, and encourage and support the relocation process. As part of the development of a regional approach to migration, the migration strategy group should introduce an improved outward-facing information source that comprises information on job vacancies; regulated occupations; and recognition of foreign qualifications, for example, as well as the non-pecuniary benefits of living in Northern Ireland. The development of the information source will also need to be accompanied by an international marketing campaign.
Attracting recent graduates and skilled emigrants back to Northern Ireland
In recent years, emigration and “brain drain”, especially at the higher skills level, have begun to disproportionately affect Northern Ireland compared with most other UK regions. When examining the impact of demographic change and mobility on skills imbalances, it is worth noting these comparatively large percentages of Northern Ireland domiciles who leave the country for their studies and/or professional careers.
A large share of Northern Ireland domiciles undertakes full-time tertiary education at a university elsewhere in the UK, rather than in Northern Ireland. In 2016/17, 63 070 individuals from Northern Ireland were enrolled in UK HEIs, and only 73% of those were studying in Northern Ireland, which is a low rate of local study when compared to the other UK countries. Only Wales (United Kingdom) (69%) ranks lower than Northern Ireland in this respect (HESA, 2018[94]). This outward mobility of Northern Ireland higher education students can largely be explained by the larger numbers of HEIs in Scotland and England (United Kingdom), compared to Northern Ireland and Wales, but there are also a variety of social and cultural reasons (McQuaid and Hollywood, 2008[95]). This phenomenon has been reinforced in recent years by the marketisation of higher education in England and the removal of student number caps there, resulting in greater availability of study places (UCAS, 2019[96]). Of the 27% of HE students who leave Northern Ireland to study elsewhere in the UK, most go to English HEIs (19%), with 7% studying in Scotland and 1% studying in Wales. There are some Northern Ireland council area variations in HE leavers, with students from North Down and Ards being the most likely to leave, and those from Mid‑Ulster being least likely (HESA, 2018[94]). It should be noted that these data do not include students who leave to study outside the UK, including the Republic of Ireland.
Many graduates find employment outside Northern Ireland. In 2015/16, there were 9 575 Northern Ireland domicile graduates (“HE leavers”) who entered the UK labour market. While 68% of this group studied in Northern Ireland and entered the Northern Ireland labour market, 4% of them studied there but entered the Great Britain labour market; 12% studied in Great Britain, and returned to Northern Ireland for work; and 16% studied in Great Britain and stayed there for work. Moreover, of the Northern Ireland domicile graduates who left to study elsewhere in the UK, only 41% returned to Northern Ireland for work (HESA, 2017[97]). This would be less of a concern for Northern Ireland if this shortfall were offset by HE leavers from other regions of the UK or elsewhere entering the Northern Ireland labour market. However, the data suggest that there are comparatively few graduates from elsewhere in the UK who choose to work in Northern Ireland, regardless of whether they studied in Northern Ireland or not (HESA, 2017[97]). Neither is the shortfall being addressed by international (EU and non-EU) students staying in Northern Ireland after their studies at Northern Ireland HEIs. Of the EU students at Northern Ireland HEIs, 84% come from the Republic of Ireland, the majority of whom return there. The remaining 395 EU students at Northern Ireland HEIs make up less than 1% of HE students there (HESA, 2018[94]).
International migration can have a positive impact, especially for higher-skilled and educated workers, through a better allocation of talent. As such, Northern Ireland’s export of HE students should not be considered a negative point in and of itself. However, the drain on a country’s human capital represents a significant problem if the origin country is unable to attract (back) the talent from abroad required by its own labour market. This is becoming the case for Northern Ireland. If left unaddressed, the gross shortage of highly educated people will have an impact on Northern Ireland’s future ability to meet higher-level skills demand. Encouraging the return from abroad of recent graduates, as well as those who have already been in the labour market for a number of years, could have an impact on closing skills shortages.
As previously discussed, migrants and returning workers are attracted by a combination of pecuniary and non-pecuniary factors. There is little available evidence on the specific motivations that inspire Northern Ireland domiciles to return home. However, international evidence points to returning migrants typically attributing greater importance to non-pecuniary factors (Barcevičius et al., 2012[98]), with many returning to their home countries more for private and social motives than for purely economic reasons. Countries can engage in a targeted fashion with expatriate communities and individuals, to reinforce ties with the home country and provide practical information and support for their relocation. Such diaspora engagement activities can encourage networking and knowledge exchange between expatriate communities and people in the home country, which are important for increasing access to capital and more innovative technologies and work practices (Dickerson and Ozden, 2018[99]).
Given the feedback from OECD Skills Strategy participants and international evidence, financial incentives alone are unlikely to provide a short-term solution to attracting Northern Ireland workers back from abroad. However, there are indications that Northern Ireland could do more to attract these workers back. For instance, Northern Ireland does not have a single body responsible for overseeing engagement with its diaspora, and neither has it developed a comprehensive diaspora engagement policy. The Northern Ireland Government should identify or introduce a body to assume responsibility for a new diaspora engagement programme (Invest NI would appear to be already well placed to assume this function). The body should be in charge of all activities related to diaspora engagement, from cultural engagement to the implementation of migration policy activities for skilled returners. It should co‑operate closely with, and include representatives from, social partners such as cross-governmental partners, business associations and relevant NGOs, but ultimately report to the migration strategy group.
There are a number of examples of international best practice for seeking to reverse “brain drain” and diaspora engagement activities (see Box 2.13). These demonstrate the effectiveness of better profiling of emigrants, which allows for a more targeted suite of incentives to encourage their return. Such incentives include the provision of internships, pre-employment training and information to facilitate reintegration.
As part of a regional approach to migration, Northern Ireland should focus on the design of a comprehensive programme for social and cultural engagement activities with the Northern Ireland diaspora. Such a programme could encourage talent attraction, provided its objectives and allocation of responsibilities are clearly defined, and sufficient financial support provided. Key factors within such a programme should include: enhanced data collection regarding the composition and orientations of the Northern Ireland diaspora to better ascertain their key motivations and influencing factors for returning home; and a clear political commitment that returning workers are welcome through, for example, explicit support for a diaspora engagement programme.
The body responsible for the diaspora engagement programme should gather comprehensive data on Northern Ireland people who are currently studying or working abroad, both in terms of their skills profile as well as their motivating factors for returning (e.g. pecuniary vs. non-pecuniary drivers). Building on these data, the body should clearly specify the objectives of the engagement policy, which could include return migration for some groups (especially in line with targeted areas of skills need), as well as knowledge sharing and networking. Practical solutions could include Northern Ireland -based internships for university students who are enrolled abroad. There is also scope for opportunities under existing programmes to be marketed more widely to encourage Northern Ireland’s graduates to return. The Assured Skills programme, for example, takes the form of an eight-to-ten-week pre-employment training programme, which is tailor-made to meet a foreign direct investment (FDI) company’s specific skills needs.
In terms of communicating information to returning migrants, nidirect only has a single webpage providing minimal practical information on moving back to Northern Ireland. Northern Ireland should, therefore, develop an enhanced information source for returning workers that provides information on job opportunities, pecuniary incentives and practical information for relocating. As part of the work of the migration strategy group, Northern Ireland should also merge this enhanced information source for returning domiciles with the recommended portal for attracting foreign talent (as is the case in Estonia). While nidirect could be an appropriate site for these portals, it would need some significant work in terms of its functionality and content.
Box 2.13. Relevant international examples: Attracting recent graduates and skilled emigrants back to countries of origin
Diaspora engagement activities: Examples from Lithuania
Lithuania was an early adopter of diaspora engagement strategies and has actively worked to promote return migration. The Global Lithuania diaspora programme, the website, I Choose Lithuania, and the NGO Global Lithuanian Leaders all work in tandem to engage with the diaspora. The Ministry of Foreign Affairs’ Department of Lithuanians Living Abroad manages the Global Lithuania diaspora programme, which runs various programmes to encourage young people and professionals to return to Lithuania for work. Global Lithuanian Leaders brings together an extensive community of 1 700 Lithuanian professionals based in 49 countries to network and share their acquired knowledge and expertise with companies and individuals back in Lithuania. The website, I Choose Lithuania, provides information to returning diaspora members, as well as anyone else interested in living in Lithuania, to make their arrival and integration as easy as possible. Together, these initiatives ensure that Lithuanians abroad can easily connect and offer incentives to return.
Creating brain gain: An example from Italy
The Brain Back Umbria programme in Italy sought to reduce brain drain in the region, the main causes of which were the lack of career opportunities; transparency and confidence in the country; red tape; and lower salaries compared with the average salaries earned abroad. The regional agency developed a tailor-made qualitative and quantitative analysis of the region’s citizens who had migrated due to the lack of job opportunities in the region. The analysis was carried out through social media and the Keep in Touch survey to Umbrian residents abroad. Through the survey, a typical profile of the migrants was outlined, identifying the majority as men, aged 30-35, with tertiary education, and highly skilled in marketing and communication. Based on this profile, a series of initiatives were implemented to encourage the return of potential entrepreneurs residing abroad, for the creation of innovative start-ups within the region. This was a low-cost endeavour that resulted in the creation of 16 start-ups and a better understanding of the region’s emigration issues. The key step was mapping the problem in order to develop a strategy for addressing the phenomenon, tailored to the target audience.
Reversing brain drain: An example from the Slovak Republic
The Slovak Professionals Abroad Programme aims to encourage its natives to return home to the Slovak Republic. The programme provides internships and job opportunities for Slovak students who are currently studying in other countries. While on these internships, students are also able to participate in activities such as workshops, lectures and social events organised by the programme, to help them build networks and connections within the Slovak Republic. The programme also provides tailored support and job opportunities for Slovaks who have already have a few years’ work experience abroad. Since 2012, the programme has worked with 114 companies in the Slovak Republic to provide placements for both internships and full-time jobs. Of the 165 students who have undertaken internships so far and finished their degree, 44% had returned to the Slovak Republic by July 2019.
Source: Government of Lithuania (2020[100]), “I Choose Lithuania” (Article), www.renkuosilietuva.lt/en/; Government of Lithuania (2020[101]), “Global Lithuanian Leaders” (Article), http://lithuanianleaders.org/; Cavallini, S. et al. (2018[87]), Addressing Brain Drain: The Local and Regional Dimension, https://cor.europa.eu/en/engage/studies/Documents/addressing-brain-drain/addressing-brain-drain.pdf; LEAF (2020[102]), “Slovak Professionals Abroad Programme” (Article), https://spap.leaf.sk/.
Recommendations for attracting recent graduates and skilled emigrants back to Northern Ireland
1.16. Develop a comprehensive programme for engagement with the diaspora that builds on data on the skills and motivations of Northern Ireland emigrants. The Northern Ireland Government should identify or introduce a body to assume responsibility for a new diaspora engagement programme. The body should be in charge of all activities related to diaspora engagement, from cultural engagement to the implementation of migration policy activities for skilled returners. The body should gather comprehensive data on Northern Ireland people who are currently studying or working abroad, both in terms of their skills profile as well as their motivating factors for returning (e.g. pecuniary vs. non-pecuniary drivers). Building on these data, the body should clearly specify the objectives of the engagement policy, which could include return migration for some groups (especially in line with targeted areas of skills need), as well as knowledge sharing and networking.
1.17. Merge the recommended information source for returning Northern Ireland domiciles with that for attracting foreign talent. As part of the work of the proposed migration strategy group (see Recommendation 1.13), Northern Ireland should merge the recommended information portal for attracting foreign talent (see Recommendation 1.15) with the enhanced information source for returners. This would help centralise and focus outward-facing information and reduce the number of fragmented information portals. While nidirect could be an appropriate site for this information, it would need some significant work in terms of its functionality and content.
Overview and discussion of recommendations
This chapter discussed how reducing skills imbalances could help Northern Ireland address shortages, surpluses and mismatches in order to improve the economic and social success of society, businesses and individuals. Reducing skills imbalances can result in increased economic growth through improved productivity and innovation, and by creating greater alignment between skills demand and supply. Public policy makers can work with education and training providers, employers, and individuals to help create the conditions, or provide direct support, for reducing skills imbalances. Four opportunities have been selected to support reductions in skills imbalances:
1. Improving individual career choice through the provision of enhanced career guidance.
2. Strengthening the responsiveness and flexibility of the tertiary education and VET systems.
3. Reducing economic inactivity to minimise skills shortages.
4. Improving labour mobility to meet skills demand.
The chapter presented 17 recommendations to help reduce skills imbalances (see Table 2.4). This selection is based on input from literature, desk research, discussions with the Northern Ireland Project Team, and broad engagement with a wide variety of stakeholders, including two workshops in Belfast, two meetings in Derry/Londonderry, a meeting in Dungannon and various related meetings and group discussions.
To reduce skills imbalances, Northern Ireland should provide enhanced, real-time information, coupled with concerted efforts to market that information to encourage engagement with it. This is especially the case regarding the provision of career information and guidance tools to better inform individual career choice (see Recommendations 1.2, 1.3 and 1.4). However, the same principles apply with regard to attracting migrant workers and encouraging the return of Northern Ireland domiciles (1.15 and 1.17), in order to meet skills demand through labour mobility.
Employers play an essential role in reducing skills imbalances. The OECD recommends more effective engagement with employers to encourage and advertise work-based learning opportunities (1.5 and 1.6), as well as facilitating greater employer engagement in order to ensure that curricula reflect the skills needed in the labour market (1.8). The role of employers also features heavily in reducing economic inactivity, as Northern Ireland needs to understand their specific barriers to employing the economically inactive (1.11), as well as to encourage them to implement measures to create healthier workplaces, thereby contributing to a reduction in inflows to economic inactivity (1.12).
Finally, the OECD emphasises the need for greater strategic coherence in certain policy areas. This is especially the case for meeting Northern Ireland’s skills needs through improved labour mobility (1.13) but equally applies to the provision of career guidance and education (1.1), as well as to ensuring that education and training providers respond more effectively to labour market demand (1.7). Moreover, approaches to reducing economic inactivity need to adopt a more strategic and targeted approach to interventions, which in turn requires a deeper understanding of the diverse needs of the target cohorts (1.9 and 1.10).
Based on discussions with the Northern Ireland Project Team, three recommendations have been selected that could be considered to have the highest priority based on potential impact, relevance in the current Northern Ireland context, as well as the overall support for implementation. To reduce skills imbalances, the OECD recommends that Northern Ireland:
Complement recent strategic reforms to career guidance provision across all providers, by developing clear, common, transparent and accountable quality standards (1.1).
Introduce funding model reforms to ensure a proportion of grant funding is conditional on graduate employment outcomes (1.7).
Better meet Northern Ireland’s skills needs through a more regional approach to attracting skilled migrants, including through broadening the remit of the current cross-departmental migration strategy group to examine labour mobility (1.13).
Table 2.4. High-level overview of recommendations to reduce skills imbalances in Northern Ireland
Note: DfE is the Department for the Economy; DE is the Department of Education; DAERA is the Department of Agriculture, Environment and Rural Affairs; DfC is the Department for Communities; DoH is the Department of Health; DfC is the Department for Communities; NICS is the Northern Ireland Civil Service; Invest NI is Invest Northern Ireland.
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