There is much talk about a ‘Skills Gap’, not just in the Isle of Man but more generally across developed nations. Put in very simple terms this refers to a mismatch in skills required by employers and those skills possessed by their current employees or the pool of available future employees.
There are two focus areas where skills gaps are currently cited:
lEducational Skills Gap – that school leavers and other students further up the higher education chain are leaving their academic environments without, what is deemed by employers to be, appropriate knowledge.
lEconomy Skills Gap – when an economy shifts from one type of employment and skills set to another and the workforce does not adapt to the new reality. Generically, in the UK, this has been characterised in the last 60 years by a significant shift from manufacturing and labour intensive jobs to service industry skill sets and automation.
But what is the case in the Isle of Man?
To start with, a skills gap of any type tends to imply that there are people that are “left behind” or unable to find employment. With a 0.7% employment rate and with the lowest numbers of youth unemployment in decades, it would seem that the available people are finding a slot that they can fit into.
So is what we are experiencing here a “Skills Gap” or simply a deficit of people? In reality there are aspects of both, but in a very complex pattern, mostly because we have more limited participants because of not having the range of industries that exist in much larger places. Let’s examine that a little further in relation to the two focus areas mentioned above.
Educational Skills Gap
It was very true in the past that the education system was out of line with the changing demands of the economy, and here in the Isle of Man the Government has been very focused on either sending people away to the UK to attend university, or producing students tuned to the office administration functions that were characteristic of large financial institutions and Government. However, this has changed substantially in the last five years. The Curriculum has changed to adopt more digital skillsets. Local apprenticeships, embedded in business, have given a direct line into employment with a specific focus on economically required and in demand skills, thereby attempting to narrow the skills gap and make education more relevant.
However, this is very much a moving target. The pace of change, particularly in the technical industries, is so rapid that this represents a great challenge to organised academic courses as it is likely that the specific skills taught will be out of date within the timescale of a course. Similarly there is a need for diversity of learning that is not taught here and is not directly attributable to a mass requirement here. Think of Politics, Literature, Economics and History as examples. A diversity of thinking is a requirement of a healthy nation and we should continue to encourage such study without needing a specific dialogue.
We would often expect such studies to be undertaken in the UK and beyond, which adds further diversity, but we have to have a reasonable plan to bring our students back and find a way for them to fit back into the Manx working community.
Economy Skills Gap
This is slightly more controversial.
The same arguments apply as above that the unemployment rate is so low there doesn’t appear to be a gap but there are a couple of underlying things that need to be put in context.
Firstly, there is quite a substantial shift in the places that people work and the things that they do.
We have seen an increasing shift from financial services, to much more advanced manufacturing, e-gaming and general tech functions. This seems to be supported statistically at the moment. The amount of company tax (primarily financial services as they are the bulk of the tax paying companies) has dropped but the overall individual tax take is up. In the e-business sector, the average income is almost twice that of the average in the banking sector. So, in the growing sectors each individual represents the income of two people previously employed. However, this would naturally imply that the number of people in employment is decreasing, but this is not the case, it is actually increasing.
What we forget is that these tech companies employ lots of very highly paid tech people, but they also require employees with the more ‘traditional’ skills in the support functions of their business, from accounting to compliance to receptionists.
So, growth of these organisations generally creates opportunity across the range of different skillsets. However, what is different from the older working models is that growth is led through the top of the company and not through the bottom.
Unlike a factory or bank that may in the past have grown by scaling from the bottom up, tech companies scale their development (tech) capability first and then grow to support the growth that they create. Essentially, they scale from the middle, focussing on talent.
So that is how the private sector works and how our economy is actually adapting in the middle and bottom layers of organisations. It is that middle layer, containing specialised skills where we have a significant deficit and where we need to import because however we structure a plan on skills, there are simply not enough people to fuel growth.
We have to bear in mind that, in particular digital organisations, modern workforces can be highly mobile and located anywhere. If we cannot support growth here, then the growth will happen elsewhere.
This is a lose-lose scenario as these people are essential and significant contributors to the overall economy so should be encouraged and welcomed.
Some would say we also have a disproportionately large Public Sector, does this react in the same manner? The answer would appear to be no as the pace of change in the digital sense is much slower and there is a much more diverse mix of types of workers. One viewpoint could be that the Public Sector actually acts as the “buffer” of employment, expanding or contracting to keep the employment landscape balanced and general employment low. But from another perspective, the Public Sector actually has the same highly skilled worker deficit that exists elsewhere (think doctors, dentist etc) and again these skills need to be imported to enable the Public Sector to sustain services that maintain the quality of life that the more direct economically active imports will expect.
But what skills are we talking about?
The world is increasingly changing at an ever faster pace. This puts immense challenges into providing skills that have longevity. A decade ago the average number of jobs you would have in a career was around five different jobs. Moving forward the average is more likely to be around 30, partially because people will move more and partially because people will work longer. The combination of this fast pace of change and longevity is that there is an increasing agenda for real and effective life-long learning. It is the ability to constantly learn and adapt which may actually be the key skill deficit that needs to be addressed rather than a concentration on specialisation.
So let’s look at our education system and see how it can create highly adaptive students that are, in themselves, world class and make sure that they have an awareness of how the world of business works and their potential place in it.
Let us encourage companies to look beyond very short term skills acquisition and be confident that the local people they acquire from our education system have the aptitude to be grown quickly from the bottom and moulded into the requirements rather than simply buying in the skill.
In the meantime, let’s look very carefully at the profile of workers to ensure that we maintain the balance of local opportunity and skilled people coming from other places, not ever forgetting that these skilled people create the opportunities through both success and also sharing knowledge and experience. Diversity of people here is not a threat, it is how we remain relevant in the wider world.
We should also look at opportunities to make sure that inexpensive and relevant re-training opportunities are available, particularly in the public sector, to ensure that everyone who has not been through an adaptive learning environment in the education system is given the opportunity to establish this principle in later life and every effort should be made to make sure that skills are adapted and perhaps resurrected to give everyone the opportunity to progress and be an effective contributor to increasing success of the Island. Wouldn’t it be great if, alongside the recycling and renewables policy that forms part of the Biosphere status, we also acknowledged and embraced the fact that skills and knowledge can also be renewable and recycled? It’s sometimes called experience.
I recently joined the new Digital Isle of Man Board – a group of industry leaders looking at the challenges and opportunities in the Island’s digital sector.
Digital Isle of Man is charged to act as a public/private partnership in support of product development, promotion and policy input for the island’s fast moving and significant digital industries.
As part of this work we will be considering the impact of skills and I hope we can make and take the opportunity once again to show people what a coordinated Manx community can do to turn a skills gap into a people opportunity.