Understanding Skills Supply & Demand
Report Segment: Context
The importance of the distinction between a gap and a shortage cannot be overemphasised because it impacts directly on funding and allocation decisions in FE.
A shortage implies a deficit in supply, “in short supply” we might say. Whereas as a gap is less about supply and more about shaping the skills of existing employees to meet the needs of the company. This is an important distinction – and without it, there is a danger of policy being made which confuses gaps with shortages:
“We have skills gaps in Norfolk” means there are people in the Norfolk workforce who need to gain new skills to help them do their work effectively.
“We have skills shortages in Norfolk” means there are not enough people to do the skilled jobs that exist (or will exist in the near future) in the county.
It is clear that increasing the supply of skilled people (say through new courses for teenagers at college) based on the first statement will do little to alleviate the problem – it may even exacerbate it. Conversely, focusing on a workplace upskilling strategy based on the second statement will be equally ineffective.
So skills shortages refer to the need for new people with the right skills to join the workforce of a particular sector. This forms the bulk of FE work, training people to fit job vacancies of the future. Of necessity, it involves a lot of planning, forecasting and guesswork. It is also very much a scatter gun approach to matching supply with demand because, first of all there is no guarantee that the forecast demand for a skill in a particular sector actually turns out to be in demand two or three years down the line. But also, there is no guarantee that the person with the new skill will actually take up work in the sector which originally forecast the demand. So colleges are tasked with delivering skills to the economy as a whole rather than delivering pinpointed demand led skills for particular sectors or localities; hence the reference to a “scattergun” approach.
Skills gaps are about existing people in the workforce not having the right skills to perform the job they are doing. This is a very specific problem which requires a specific remedy. Addressing skills gaps can be a called a “precision” tool in the arsenal of training providers; it delivers the skill to the person who is required to the job. Once this distinction is fully appreciated, one can begin to separate out certain ‘myths’ about further education. The myth for example, that FE doesn’t deliver what employers need may be caught up in the skills shortages debate in which case it should be made clear that main stream full time training is a role given to FE by society and not one which can, with any accuracy, gives employers what they want, when they want it. Equally the myth that colleges are not places for businesses may be dispelled by referring to the different roles FE has.
Skills gaps can often be addressed through short courses and many employers refer to this as part of their criticism of government funded training. But colleges are in an excellent position to deliver short courses to businesses and to build long term “follow-through” relationships which ensure that a company isn’t wasting a training investment on a ‘single shot’ course.