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Mutual Learning Programme
DG Employment, Social Affairs and Inclusion
Host Country Discussion Paper - Ireland
Skills Forecasting in Ireland – Can
the data tell a useful story?
Peer Review on 'Methods for forecasting skills needs for
the economy'
Dublin (Ireland), 13-14 June 2016
Written by Colin Howat
May 2016EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs and Inclusion Unit A1 Contact: Emilio Castrillejo E-mail: EMPL-A1-UNIT@ec.europa.eu Web site: http://ec.europa.eu/social/mlp European Commission B-1049 Brussels
EUROPEAN COMMISSION
Mutual Learning Programme
DG Employment, Social Affairs and Inclusion
Directorate-General for Employment, Social Affairs and Inclusion
Peer Review on 'Methods for forecasting skills needs for the economy'
Dublin (Ireland), 13-14 June 2016
May, 2016Mutual Learning Programme Host Country Paper
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Reproduction is authorised provided the source is acknowledged.Mutual Learning Programme Host Country Paper
Table of Contents
1 Quick summary ........................................................................................... 1
1.1 The holistic approach to understanding skills needs in Ireland .................... 1
1.2 The post-crisis focus on economically-valuable skills ................................. 1
2 Background ................................................................................................. 2
2.1 Policy priorities during the crisis and recovery .......................................... 2
2.2 Skills supply in Ireland .......................................................................... 2
2.3 Skills demand in Ireland ........................................................................ 3
3 Policy measure (the Irish approach to skills forecasting) ................................... 4
3.1 The institutional landscape and key characteristics of the model ................ 4
3.2 Occupational employment and skills projections ....................................... 5
3.3 Development of the national skills database ............................................ 9
4 Results and future plans ..............................................................................11
4.1 Providing accessible data and intelligence ...............................................11
4.2 Influencing the policy design ................................................................11
4.3 Future prospects .................................................................................12
5 Difficulties and constraints ...........................................................................13
5.1 Data limitations...................................................................................13
5.2 Data granularity and accuracy ..............................................................13
6 Success factors and transferability ................................................................15
6.1 Success factors ...................................................................................15
6.2 Transferability.....................................................................................15
References.......................................................................................................16Mutual Learning Programme Host Country Paper 1 Quick summary 1.1 The holistic approach to understanding skills needs in Ireland There has been a continuous programme of occupational forecasting in Ireland over the last 25 years. It draws on an even longer-running programme of macroeconomic forecasts, the Medium-Term Review (MTR), which provides sectoral employment projections. Modelling the occupational distribution of sectoral employment, in effect, translates the sector estimates into occupational estimates of future employment. The occupation forecast provides projections of expansion demand for over 130 occupations. This focus on detailed disaggregation is driven by the demands of policy makers. These occupations can be grouped in different ways, including as 17 occupational families that share similar skill sets. Projections for employment by educational level (as a proxy for skills) are also undertaken based on the current distribution of employment by occupation. This provides a high-level picture of the future shape of skills required in Ireland; although it is the way that the occupational data is combined with other sources of skills intelligence that arguably really brings it to life. The most recent occupational forecast was published in 2014 and covers the period 2013-2020. Since 2008, it has been produced by the Skills and Labour Market Unit (SLMRU), which was set up in 2001 to support the Irish government’s tripartite Expert Group on Future Skills Needs, a body responsible for providing advice on current and future skills needs. A key aspect of the SLMRU’s work has been to develop and manage a National Skills Database that brings together a wide array of information that can coded and stored by occupational group. This includes employment data (provided by the Central Statistics Office), skills demand and shortage intelligence (employment permits data, recruitment agency survey data, job vacancy data from the PES and an online recruitment site), graduate destination data, as well as supply-related information (education and training participation and output data). Since 2010, the occupational forecasts have been incorporated with the National Skills Database and related reports (the annual National Skills Bulletin). The efforts of the SLMRU to access, code and maintain these data as part of a continuous programme is one of the defining characteristics of the Irish approach. It has enabled the development of occupational employment profiles at a detailed level that provide a holistic view of the current and future prospects by occupation. 1.2 The post-crisis focus on economically-valuable skills The economic crisis in Ireland post-2008 led to major public service reform and a renewed focus on labour market activation policy. The Action Plan for Jobs launched in 2012 (and renewed in 2016) was an umbrella cross-departmental policy focused on job creation and growth. Substantial reform of the education and training system has been geared towards its closer focus of providing labour market-relevant provision. The reforms have led to a renewed interest in the evidence to determine where limited public resources should be targeted – including by sector and occupation. The occupational forecasts and other related evidence have been used to design specific education and training programmes. These have variously been targeted at providing training and work placements for the long-term unemployed in certain growth clusters (Momentum) and re-skilling unemployed people in higher education priority subjects and courses (Springboard+). The forecasts have also shaped the government’s National Skills Strategy in 2025 and its Enterprise 2025 strategy. May, 2016 1
Mutual Learning Programme Host Country Paper
2 Background
2.1 Policy priorities during the crisis and recovery
There has been a high degree of flux within the Irish labour market and economy over
the last decade. The economic crisis of 2008 profoundly affected the labour market. An
employment rate that was rising, from 67.5% in 2005 to 69.1% in 2007, fell sharply in
subsequent years to a low of 58.8% in 2012.
Since then, the employment rate has risen steadily, reaching 63.1% in 2015 (Central
Statistics Office). The Irish government’s National Skills Strategy launched in 2016
explains this ‘astonishing recovery’ partly in terms of reform to the public finances and
partly in terms of a major job creation programme (the Action Plan for Jobs).
While the strength and sources of recovery can be debated (cf. the Europe 2020
employment rate target of 70%), there has been a clear shift in the public spending
strategy and policy approach since Ireland’s public service reform plan was published in
2011. This is highly relevant to understanding how skills anticipation activities fit within
the policy cycle, as two apparent themes underpinning reform in Ireland have been:
A closer focus on the needs of the economy now and in the future, to ensure that
the whole package of employment support and training is labour market relevant.
Understanding and predicting the changing composition of skills required by
employers therefore arguably rises in importance.
A much stronger focus on the effective disbursement of limited public funding,
especially in the context of skills and training programmes. Policy design
therefore becomes more closely-aligned to understanding which areas provide
the greatest return on investment based on evidence about the changing shape
of skills demand, as well as the analysis of the occupations and sectors likely to
drive future growth.
2.2 Skills supply in Ireland
Ireland has the highest proportion of people under the age of 15 in the EU (Department
of Education and Skills). The National Skills Strategy explicitly references this
‘youthfulness’ as an opportunity for the economy and a challenge for an education and
training system tasked with ensuring the relevance of the skills it provides.
Ireland also has the third highest share of third level graduates in the EU-28 after
Luxembourg and Cyprus (McNaboe and Condon). Yet there is evidence of mismatch
between the available jobs and skills. The 2014 European Skills and Jobs Survey
reported that Ireland had the fifth highest rate of skills under-utilisation among the EU
Member States (i.e. percentage of adult employees reporting that they have higher skills
than required for their jobs).
Cedefop also reported that, in 2013, Ireland had the third highest level of higher
education mismatch of young tertiary education graduates (36.8%, compared to the EU
average of 24.9%). This indicator measures the share of graduates employed in roles
that are not categorised as managers, professionals, technicians or associate
professionals (ISCO 1-3) based on the occupational classification. It is a rough measure
as it assumes that no jobs in other occupational categories require higher-level skills,
or take account of the fact that some of these employment outcomes may be temporary
in nature (Cedefop). However, it coincides with the reported experience of education
inflation (i.e. employers being able to raise job entry requirements in a challenging
labour market situation) in Ireland immediately following the crisis, although the
forecasts suggest that this might be reversed as the economy recovers (Behan).
Furthermore, labour market participation has been in decline in Ireland. While the
unemployment rate fell from 15.1% in 2012 to 8.8% at the end of 2015, nearly 900,000
people (30% of the total working active population) were economically inactive in 2015.
May, 2016 2Mutual Learning Programme Host Country Paper
Labour market flows through migration have also had a considerable impact on skills
supply in Ireland. The crisis led to a flow of Irish nationals, especially young
professionals, emigrating. After 14 consecutive years of net immigration from 1996 to
2009, Ireland has experienced net emigration each year up to and including 2015
(between 70,000 and 90,000 people annually, which equates to 2-3% of the entire
working age population each year). It is estimated that in almost every year, the single
largest group of emigrants is people qualified at the third level. For example, in 2015,
third level–qualified emigrants are estimated by the Central Statistics Office to account
for 53% of all emigrants (39,800 out of 75,400 emigrants).
These supply-related issues indicate that reductions in unemployment experienced in
Ireland require careful contextualisation. It has been argued that that high
unemployment during the height of the crisis would have been even more problematic
were it not for the high levels of net emigration and a fall in labour market participation
(FitzGerald and Kearney). As Ireland shifts towards a recovery focus, there is
heightened emphasis on these two dimensions of skills supply:
The National Skills Strategy includes a specific objective to encourage Irish
migrants to return to the country.
Since 2012, Ireland’s Pathways to Work strategy has attempted to ensure ‘that
as many jobs as possible go to people on the live register’ through increasing the
labour market focus of activation programmes and incentivising employers to
take on people who are unemployed.
The Pathways to Work 2016-2020 strategy sees a shift in focus ‘from “activation in a
time of recession” to “activation in a time of recovery and growth”. Alongside renewed
focus on the long-term unemployed, this includes an objective to ‘extend the approach
of activation to other people who, although not classified as unemployed jobseekers,
have the potential and the desire to play a more active role in the labour force’.
2.3 Skills demand in Ireland
As Ireland has moved into the economic recovery phase, there is some evidence of skills
shortages emerging, especially in relation to professional and associate professional
roles, and in sectors such as ICT, science and engineering. Sectors that were deeply
affected by the recession, such as construction, have started to report skills shortages
since 2014 (Department of Education and Skills). Sectoral projections forecast new jobs
in the period to 2020 in areas such as data analytics, agri-food, biopharma and
hospitality.
The government’s Enterprise 2025 strategy sets out an ambition to create 266,000
additional jobs from 2014 to 2025, focusing on sectors in which Ireland is thought to
have a comparative advantage (such as ICT, life sciences and financial services). Skills
development and talent management are at the heart of the strategy as ‘differentiators’
for the Irish economy. The strategy includes a joint objective for the Department of
Jobs, Enterprise and Innovation and the Department of Education and Skills to
‘strengthen the mechanisms and metrics for ensuring delivery on the skills needs
identified at sectoral and occupational level’.
May, 2016 3Mutual Learning Programme Host Country Paper
3 Policy measure (the Irish approach to skills forecasting)
3.1 The institutional landscape and key characteristics of the model
3.1.1 Policy objectives and defining characteristics of the Irish approach
Skills forecasting research in Ireland aims to support policy-making with regard to
education and training provision, labour market policy, immigration policy and careers
guidance. The key characteristics of the Irish approach to how forecasting has been
developed and embedded nationally are arguably:
A finely-grained level of occupational disaggregation, including over 130
occupations at the most detailed level, sometimes analysed and reported in terms
of 17 higher-level occupational families with shared skill sets;
An integrated approach to occupational forecasting and the capture and
presentation of related data through the National Skills Database, which compiles
and makes publicly-accessible a wide range of skills related data by occupation;
The close connection between the work of skills anticipation research and the
mechanisms for informing policy, notably through the Expert Group on Future
Skills Needs, which advises the Government on skills needs and labour market
issues, and is a key lever for tackling mismatches identified by data and research.
3.1.2 A long history of occupational forecasting
Ireland has a well-established programme of occupational forecasting. The first national
occupational forecasting model was developed in 1991 by the independent Economic
and Social Research Institute (ESRI) in partnership with the national training agency at
the time, FÁS. Twelve Manpower Forecasting Studies were produced by ESRI and FÁS
from 1991 to 2007. In 2008, the management of the occupational forecasting model
developed by ESRI was brought in-house by the Skills and Labour Market Unit (SLMRU),
which was hosted by FÁS at the time.
The SLMRU has produced the two most recent series of occupational forecasts,
encompassing the period of the economic crisis and beyond. The most recent forecast
was developed in 2013 and published in January 2014, including projections up to 2020.
The starting point for the occupational forecasts is the Medium-Term Review (MTR), a
macroeconomic forecast produced every three years by the ESRI, most recently in July
2013.
3.1.3 A central resource for on-going skills intelligence
The SLMRU was set up in 2001 as the research arm of the tripartite Expert Group on
Future Skills Needs (EGFSN), which, at the time, reported to the enterprise ministry
(the Department of Enterprise, Trade and Employment as it was). The EGFSN is
responsible for advising government on current and future skills shortages. Its
membership includes employer representatives, trade unions, the education sector and
government. Its status reflects the strong tradition of social partnership in Ireland.
The EGFSN produces regular skills monitoring reports for regions and sectors, as well
as an annual snapshot of skills demand (the National Skills Bulletin) and supply
(Monitoring Ireland’s Skills Supply: Trends in Education/Training Outputs). The EGFSN
also undertakes specific research projects to inform policy making. For example, in 2015
it produced a study on future requirements in the hospitality sector that linked to
Ireland’s Tourism Strategy. A previous review in 2013 of demand for high-level ICT skills
informed the government’s ICT Skills Action Plan. The EGFSN is, in a sense, hard-wired
into the policy-making process even though it operates in an advisory capacity.
Since its inception in 1997, the EGFSN has maintained a strong research focus. The
decision to set-up the SLMRU reflected a desire to develop an ‘in-house facility capable
of providing a skills monitoring role tracking trends in skills demand and supply across
the economy’ to complement externally-commissioned, in-depth sector studies (Behan
May, 2016 4Mutual Learning Programme Host Country Paper and McGrath). It was determined that the training agency FÁS, which also reported to the enterprise ministry, should host the SLMRU. FÁS already had a research capability, including undertaking the Manpower Forecasting series. The development of an internal government capacity for on-going skills monitoring has arguably been central to the Irish approach to analysing skills demand and supply. It enabled the development by the SLMRU in 2003 of a central repository to capture a wide array of data to inform policy makers’ understanding of skills demand and supply, collated in a National Skills Database. The database has grown and evolved over time. Since 2010, the occupational forecasts have been integrated within the National Skills Database. 3.1.4 A shift in the ministerial responsibility In 2011, the Irish government published a public service reform plan that included critically reviewing and rationalising various public bodies as part of a new economic recovery programme. The EGFSN was absorbed into the Department of Education and Skills. The SLMRU now sits within SOLAS, which is a successor to the SLMRU’s previous hosts, FÁS. SOLAS is a national agency of the Department of Education and Skills with strategic responsibility for planning, funding and organising further education and training across Ireland. It was set up in 2013 as part of a substantial reform programme to the Further Education and Training sector that is, in many ways, still underway. The move of the Expert Group and the SLMRU from the enterprise ministry to the education and skills ministry might indicate a shift in its focus. However, it also reflects a renewed focus on how the education and training system supports efforts to tackle unemployment and to enable enterprises to have a greater influence over the education and training design. 3.2 Occupational employment and skills projections 3.2.1 The macroeconomic model and scenarios used The latest 2014 occupational forecast was the second iteration produced in-house by the SLMRU. It provides projections for expansion demand. Current levels of replacement demand are analysed separately. The 2014 forecast covered the period to 2020. It was developed, as in previous iterations, by translating the Medium-Term Review (MTR) sectoral employment forecasts produced by ESRI into the occupational employment forecasts. The MTR is produced every three years, most recently in July 2013. It is based on the HERMES macroeconomic model (HERMES-13), which has been used for over 25 years in Ireland. Drawing on the National Income and Expenditure data, the HERMES-13 model includes 180 behavioural equations (aggregated and transformed within the simulation model to total 824 equations). The external environment is modelled using the UK-based National Institute of Economic and Social Research’s global econometric model (NiGEM). The HERMES model has evolved considerably over time to reflect changes to the structure of the Irish economy and to extend the model – for example, reflecting substantial changes to the pattern of migration in Ireland over the last two decades and shifts to a service-led economy. A specific adaptation for HERMES-13 involved ‘a renewed focus on the linkages between debt levels and economic activity’ to reflect lessons from the economic crisis (Bergin et al). Reflecting uncertainty on the future economic prospects, the MTR provides three scenarios for the future path of the Irish economy depending on the wider performance of the EU economy and the associated response of the Irish economy. These form the basis for the SLMRU’s occupational forecast: A recovery scenario (most optimistic); A ‘constrained credit’ scenario; May, 2016 5
Mutual Learning Programme Host Country Paper
A ‘zombie EU’ scenario.
The occupational forecast also explores, in less depth, a scenario (‘competitive
manufacturing’) that draws on separate research undertaken by the EGFSN on
manufacturing sector skills requirements to 2020.
3.2.2 Translating sectoral into occupational and education projections
In its most recent iteration, the MTR produced forecasts for 11 sectors. In order to
develop occupational forecasts, the SLMRU had to update the sector classification from
NACE 1 to NACE Rev 2 in line with the national labour force data (the CSO Quarterly
National Household Survey, or QNHS). It also disaggregated the ‘other market services’
sector from the MTR into five discrete industry areas: accommodation and food; IT;
financial, insurance and real estate; professional, scientific and technical services; and
other market services.
An analysis was then undertaken of the occupational distribution of sectoral employment
based on the QNHS. The QNHS captures occupational data based on the Standard
Occupational Classification (SOC), which maps to ISCO.
At the most detailed level, the QNHS captures data on 367 occupations. In order to
produce the occupational forecast, these were aggregated into 133 occupational
categories, combining groups with fewer than 3,000 people to support data integrity.
Sector by occupation matrices were produced for the 15 SLMRU-derived sectors based
on the historic QNHS data. Projected occupational shares for the period 2013-2020 were
derived by the log-linear extrapolation. By applying the projected occupational shares
to the existing sectoral employment projections, it was possible to produce occupational
employment projections. This form of shift-share analysis allows the scale effects,
sectoral effects and occupational effects underpinning the projections to be separated
out (as shown in Table 1).
Table 1. Shift-share analysis: Occupation Employment Projections 2020
Effects Projections
Scale effect Employment in Ireland is projected to increase
from 2013 to 2020 under all scenarios, in part
(level of employment growth for
recovering from losses in the 2007 to 2012
the economy as whole)
period:
- From 1.7 million to 2.0 million under the
recovery scenario
- Only rising to 1.9 million under the constrained
credit scenario and 1.8 million under the zombie
EU scenario
Sectoral effects The projections indicate positive sectoral effects
under all scenarios in IT and construction sectors.
(growth resulting from
The latter sector was one of the sectors hardest
employment in a sector
hit by the economic crisis and has been growing
increasing faster or slower than
rapidly from a low basis.
overall employment)
The important agriculture sector experiences a
negative sectoral effect under all scenarios as the
use of technology reduces labour intensity.
Manufacturing employment is also projected to
decline, even under the additional competitive
manufacturing scenario.
Employment in sectors such as distribution varies
by the scenario, growing in line with the economy
May, 2016 6Mutual Learning Programme Host Country Paper
under the recovery scenario, but with a negative
sector employment affect under the constrained
credit scenario.
Occupational effects Occupational employment effects are gradual in
nature and not affected by the different scenarios.
(growth resulting from a changing
occupational profile in sectors) Positive occupational effects are predicted for
managers, professionals and sales occupations
among others.
Negative occupational effect tend to be
concentrated in administrative and elementary
occupations.
Source: 2014 occupational forecast.
The shift-share analysis is provided for the nine broad SOC groups (managers,
professionals etc) and for the 133 detailed occupations within those groups. This helps
to draw out the projected differences within occupational groups. For example, while
administrative occupations overall are predicted to have a negative sector and
occupational employment effect, this is driven by decline in the demand for government
administrative occupations and Personal Assistants. Conversely, financial administration
is estimated to have a positive sector and occupation effect. This group represents
nearly half of the overall expansion for all administrative occupations.
A separate grouping of occupations is also provided within the analysis for the purpose
of drawing out the potential skills implications. Employment projections for 17
occupational families are intended to ‘indicate more clearly the demand for different skill
types under various scenarios’ (Behan). These occupational families are shown in Table
2.
For example, drivers form part of the transport occupational family; whereas under the
SOC classification, they reside in the operatives broad occupational group. The analysis
tries to highlight connections between families, such as showing that the prospects for
the separate education, health and social care families are similar as they are driven by
government policy.
It is also possible to anticipate the future skills mix in terms of educational level. The
Irish model categorises level according the components of the education and training
system:
Below higher secondary (ISCED levels 1-2)
Higher secondary (ISCED level 3)
Further education and training (ISCED level 4)
Third level or above (ISCED levels 5-6).
Projections by educational level are forecast based on constant shares, assuming the
education distribution of employment remains the same as in 2012. This projection can
only be highly-indicative, but it shows, for example, that the number of additional third-
level graduate jobs by 2020 ranges from 38,000 to 127,000 jobs depending on the
scenario (Behan). The analysis provides high-level, quantified evidence that growth –
and associated skills requirements – is primarily focused on higher-level skills. A
separate, illustrative forecast is also provided based on log-linear extrapolation to
attempt to account for the likely changing distribution of educational shares within
occupations, although this is extremely difficult to predict.
May, 2016 7Mutual Learning Programme Host Country Paper
Table 2. Occupational families based on skills similarity
Occupational Example occupations Occupational Example
family family occupations
ICT, science and Scientists; engineering Security Police officers; prison
engineering technicians; web operations officers; fire officers
(STEM) designers
Legal Three occupational Education Three occupational
families sharing families whose
Business Health
characteristics of prospects are driven
Financial positive sector and Social care by their strong public
occupational effects sector focus
Solicitors; accountants; Teachers; childcare
financial administrative workers, nurses
workers
Construction Construction Non-construction Fitters; Electricians;
managers; civil craft Butchers
engineers; bricklayers
Transport Transport and logistics Administrative Clerks (not included in
managers; air traffic other families)
controllers; drivers
Sales and Marketing directors; Arts, sports and Chefs; sports
customer care business sales tourism coaches; art, media
executives; contact and design
centre workers professionals
Farmers Farmers Operatives Food processing;
assemblers; routine
testers
Elementary Cleaners; security;
agricultural labourers
Source: 2014 occupational forecast.
3.2.3 Forecasts as part of a wider evidence base
The occupational forecast provides a basis for predicting the future direction of travel
within the Irish economy, including an indicative magnitude of change. The assumptions
underpinning the model are explicit, which allows users the make their own
interpretations of the scenarios that are set out.
In the context of HERMES-13 model, specifically, though, the projected shifts in the
profile of the economy by sector (which inform projections on occupational shifts and
the educational profile of employment) assume a continuation of trends from 2007 to
2013 in the period 2012-2020. It is arguably less straightforward to use historic
relationships as a basis for future projection when the most recent period has seen
major shifts in the country’s economy.
The occupational forecast is also only part of the puzzle. Expansion demand has to be
considered alongside replacement demand in order to build a complete picture of net
employment change and overall skills demand. In Ireland, replacement demand by
occupation is estimated based on the annualised data on labour market transitions
derived from national data (the Quarterly National Household Survey). It is based on
the number of transitions from employment to inactivity (e.g. retirement) and net losses
from inter-occupational movement.
May, 2016 8Mutual Learning Programme Host Country Paper
The HERMES model on which the occupational forecast is based also assumes an
equilibrium between supply and demand in the labour market, and needs to take
account of the future supply as a function of ‘capacity of the education system, student
preferences, labour market participation rates and migratory flows’ (Behan).
Occupational forecasts are therefore presented alongside other sources of evidence to
provide a fuller picture of the dynamics underpinning future skills demand.
3.3 Development of the national skills database
Since the SLMRU was set up in 2001, one of its major activities has been to develop and
maintain a National Skills Database. This underpinned its work to provide skills
monitoring support to the Expert Group on Future Skills Needs. As noted above, since
2010, the occupational forecasts have been incorporated within the National Skills
Database.
The National Skills Database approach is interesting as it focuses on matching different
sources of data, using occupation as the common variable. It does not attempt to
combine different datasets. Rather, it produces comparable information about different
occupations drawn from a range of sources. This provides a holistic picture of skills
needs. Most of the evidence included within the database relates to current skills
demand, supply and mismatch. However, the composite picture provided about current
skills demand and supply arguably serves to illuminate the forward-looking evidence
within the occupational forecasts.
The database was initially developed to fill a gap in the availability of demand-side skills
and employment information. For example, there were no national employer surveys on
skills. At the time, SLMRU, as a small unit, did not have the resource to produce this
data. Partly, therefore driven by necessity, the Unit started work to explore what
existing data sets could tell them (for example, using different forms of vacancy
information as a proxy for current employer skills demand).
The SLMRU engaged potential data holders in order to establish a relationship with them,
to understand the nature of potential data that could form part of the skills intelligence
model and to broker access to the data. It took around 1.5 years to get the database
up and running, and it was launched in 2003. Over time, the SLMRU has developed a
network of data providers, which has grown organically over the years. Alongside the
occupational forecasts, the key data incorporated in the database includes the following
sources:
Employment data from the QNHS (held by the Central Statistics Office);
Vacancy data (drawn from separate sources to provide a combined view of
vacancies: PES data held by the Department of Social Protection; Job adverts
published in The Irish Times and on the IrishJobs.ie recruitment website; and the
results of an annual recruitment agency survey undertaken by the SLMRU);
Monitoring of job and redundancy announcements by the Irish Development
Agency;
Jobseeker data (held by the Department of Social Protection).
Employment permit data (held by the Department of Jobs, Enterprise and
Innovation);
Graduate destination data (held by the Higher Education Authority);
Data on education and training provision and participation (from the Higher
Education Authority, the Department of Education and Skills, Quality and
Qualifications Ireland, and SOLAS).
A key aspect of maintaining the database has been to manage a process to access data
from an increasing number of data holders. It has required intensive work to foster
relationships with different data holders to negotiate access and form data sharing
May, 2016 9Mutual Learning Programme Host Country Paper agreements. For example, SLRMU staff had to become Officers of Statistics, a legally- defined role under Ireland’s Statistics Act of 1993, in order to compile and analyse the CSO data. The SLMRU sees its value in its ability to store, code and clean the data. It has developed a database and an interface for data entry. It handles regular deposits of new data, some of which is provided on weekly or monthly basis. There has been extensive work required, especially at the start, in order to be able to produce a dataset in a consistent format based on the SOC classification. This has required a fair degree of labour- intensive activity, as they have to handle various data formats, including flash files, hardcopies and even handwritten information. Occupational profiles based on the data held in the National Skills Database are accessible online to the public via the SOLAS website. The information also informs the regular reporting of the Expert Group on Future Skills Needs. There are also two annual reports capturing the state of the nation in terms of skills demand and supply. This includes the National Skills Bulletin, which has been produced annually by the SLMRU since 2005. It brings together distinct data sources to provide a holistic view of the labour market in terms of skill needs across a large number of occupations. This includes macro-economic data on growth, jobs and competitiveness; as well as detailed labour market information on employment, unemployment, labour market transitions and international mobility, disaggregated by sectors and key demographic information. At the heart of the bulletin are a set of occupational employment profiles providing statistical analysis of the 133 detailed occupations. A complementary annual report (Monitoring Ireland’s Skills Supply) looks at the inflows and outflows from education and training. May, 2016 10
Mutual Learning Programme Host Country Paper 4 Results and future plans 4.1 Providing accessible data and intelligence While the forecasting approach itself has not been evaluated, the wider work of the Expert Group on Future Skills Needs was reviewed in 2012. As noted above, this review was part of the public service reform plan. The review found that the ‘work of the Group is highly valued’ by both the education and enterprise ministries, partly because of its reputation and credibility with industry and education providers, but also because it ‘provides a mechanism for identifying future skill needs’ (Department of Education and Skills). Beyond this, there are two dimensions to the impacts and influence of the occupational forecasts. The first dimension relates to the accessibility of the intelligence in terms of how it is packaged up and disseminated through the existing policy infrastructure (and beyond), via the reports channelled through the Expert Group on Future Skills Needs and the versatility of information held in the National Skills Database. It is difficult to measure this diffuse or soft impact, but it stems from the material being effectively communicated and widely-accessible to a range of users. It is arguably an area in which the Irish approach is at its most innovative. For example, the National Skills Bulletin presents intelligence at the detailed occupational level in an accessible tabular format that collates a huge amount of information. This includes the projected medium-term growth rate based on the occupational forecast, presented as simple categories (below average; average; and above average). The unemployment rate related to each occupation is presented based on the same categorisation. The table also shows the replacement rate, turnover rate and other characteristic information for each occupation (such as the percentage of the workforce over 55 years of age). It indicates whether there are evidenced skills shortages, and even manages to include space to provide short commentary on the nature of those shortages where they have been observed. The report also provides qualitative narrative summaries of the higher-level occupational families, describing the latest situation by sector and occupation (often highlighting the interaction between sectors and occupations). 4.2 Influencing the policy design The second dimension, which is more tangible in nature, relates to how the occupational forecasts have been used as part of the policy design process to directly shape programmes. This influence arguably connects directly with Ireland’s experience of the economic crisis, which, as noted above, led to a shift in the public policy approach. This included an increased focus on the effective use of limited public resources – targeting interventions to support employment outcomes and measuring what works. One aspect of this response has been the Skills to Work initiative, which contains a portfolio of programmes that support businesses to offer jobs to the long-term unemployed. One of these programmes, Momentum, targets long-term unemployed people, by providing training and work placements. Launched in 2012 and providing 6,500 places, it is innovative in the Irish context because it was designed using an outcomes-based payment model for training providers, and it involved close engagement with employers in terms of its job placement module (Exodea Consulting). Crucially, in the Momentum programme, the training element is designed to meet labour market needs. The training aspect is structured in terms of four thematic clusters, three of which were defined as future employment growth areas based on the SLMRU forecasting results. This includes ICT, digital media, gaming and telecommunications, as well as transport, distribution and logistics and sales and marketing. The evaluation of the programme in 2014 indicated that Momentum compared favourably with similar programmes in other countries, and made positive reference to certain design elements May, 2016 11
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of the programme, including both its outcomes-based payment approach and its focus
on priority sectors (Exodea Consulting).
Another programme, Springboard, provides higher education opportunities for
individuals who have been made redundant or are otherwise employed to re-skill and
gain employment in a new area. Since launching in 2011, over 10,000 people have
enrolled on courses through the programme.
Similar to Momentum, the programme has an explicit focus on providing education
attuned to the current and future labour market demand. As such, the list of courses
supported within the scope of Springboard is defined according the evidence of skills
needs gathered by the Expert Group on Future Skills Needs via the SLMRU. The EGFSN
also produces guidance for higher education providers tendering to provide places for
eligible Springboard participants based on the current and future skills needs of
enterprises (including the current demand and future projections of skills needs).
Early evaluation of the programme in 2013 indicated that 30% of participants were back
in work within six weeks of completing their course (40% after six months). It also
showed that 40% of completers were employed in the ICT industries, which indicates
an effective connection with priority occupations as set out by the forecasts (Higher
Education Authority).
4.3 Future prospects
A new occupational forecast is scheduled to be produced during 2016. Alongside this,
the way that skills intelligence is used to inform policy is likely to continue to evolve as
part of ongoing reforms in Ireland. Strikingly, the use of data and intelligence, including
occupational forecasts has clearly shaped the National Skills Strategy to 2025.
Furthermore, the strategy appears to hard-wire the focus on evidence of skills demand.
Two of its six objectives are directly relevant to the use of skills demand and supply
intelligence:
1. Education and training providers will place a stronger focus on providing skills
development opportunities that are relevant to the needs of learners, society and
the economy.
2 Employers will participate actively in the development of skills and make effective
use of skills in their organisations to improve productivity and competitiveness.
New structures are being introduced to enable a closer interaction between actors on
the supply side and on the demand side. The skills strategy sets out plans to establish
Regional Skills Fora to enable direct employer input into shaping the future skills mix
locally. A new National Skills Council will ‘utilise intelligence on skills requirements to
proactively address emerging skills gaps’. This may appear to be evolution rather than
revolution, given the existing social partnership structures in place in Ireland (e.g. the
Expert Group on Future Skills Needs). However, it provides new avenues to share and
enrich skills demand evidence through closer contact with employers.
It may provide a more direct mechanism to influence education and training provision,
in a similar way to the Momentum and Springboard programmes. It may also be that
the new structure of regional skills fora and the National skills Council will enable a more
sophisticated dialogue with employers based on the available evidence of skills needs
(and, perhaps, provide a degree of challenge within on-going debates about the source
of blockages within the skills and employment system). There is a recognition that
employers themselves are crucial to closing the skills gap. The missing piece of the
puzzle is, perhaps, in relation to the systematic evaluation of skills-related
interventions; in order to fully understand why only a certain proportion of course
participants may end up in a related job or obtain a job at all.
May, 2016 12Mutual Learning Programme Host Country Paper 5 Difficulties and constraints 5.1 Data limitations There are clear constraints within the Irish approach related to what can and cannot be done with the data. If one of the strengths of the approach is the ability to build a composite picture at the occupational level of the various dimensions to skills needs, then an associated weakness is that the overall picture is necessarily hampered by the different levels of data quality across the different sources. The National Skills Database incorporates data gathered using different methodologies (surveys, web analytics, administrative data) and sometimes derived for a purpose distinct from the understanding or forecasting of skills needs. The benefit is that the reach of intelligence drawn into the skills anticipation model is broad. It is also, arguably, an efficient use of individual research and data collection activities, magnifying their impact through incorporation in a large-scale occupational database. The approach may create certain methodological imbalances. There is, for example, a degree of rigour to the occupational forecasting of expansion demand. Yet, in terms of quantifying future demand for occupations – and, by proxy, skills – the expansion demand is typically much less significant than the replacement demand. The National Skills Bulletin is explicit in stating that its approach, based on analysing labour market transitions data, both over-estimates and under-estimates demand in certain regards. For example, it does not capture situations in which an employee leaves, but there is no intention to hire a replacement. Conversely, it does not capture factors such as emigration. Perhaps more significantly, it means that the measures of replacement demand are captured based on historic data and, unlike the expansion demand, not underpinned by the econometric modelling. The forecast does not therefore provide a complete estimate of net employment change by sector or occupation. However, it is debatable how much of a problem this is in practice. The occupational profiles in the National Skills Bank and in the National Skills Bulletin report the replacement rate and the projected medium-term growth rate side-by-side, alongside data on the percentage of the workforce by occupation that is aged 55 years or over (a proxy for demographic effects). This arguably makes it easier for policy- makers to interpret the dynamic of employment change, even if it makes it more difficult to quantify the overall needs. The skills element of the forecast (i.e. occupational projection by education level) makes projections based on the assumption that the educational shares within each occupational groups remain constant in the period to 2020, based on the 2012 shares. In essence, it maps the current educational distribution of the workforce by occupation to the future occupational composition of the economy. The forecast acknowledges that this is unrealistic. By also providing an illustrative forecast based on log-linear extrapolation, the research goes some way to accounting for the fact that the educational composition of occupations evolves over time. However, while the future direction is relatively predictable based on factors such as technological development, the magnitude of the shift is unknown. Others factors that may influence occupational composition by educational level, such as the capacity of the education and training system to supply workers in the assumed volume, are also unpredictable. This is an inherent limitation to medium-term forecasting of skills requirements; although, it should be emphasised, this does not undermine the exercise in itself. 5.2 Data granularity and accuracy There are a set of further challenges that are likely to be echoed in the forecasting exercises in other countries. Much of the work of the SLMRU has been driven be a need to meet policy makers’ requests for relatively granular data at the occupational level. It May, 2016 13
Mutual Learning Programme Host Country Paper is not practicably feasible to disaggregate all datasets to level that users would like. Indeed, it is possible to suggest that the Irish approach provides for a relatively high- degree of occupational granularity (over 130 occupations). In the most recent period, it is arguable that the nature of the economic shock felt in Ireland has made accurate forecasting incredibly difficult. Looking backwards to predict the future is immeasurably more difficult where the shocks are seismic or unpredicted, as with the 2008 economic crisis that impacted substantially on Ireland. Continued revisions to the model and the use of scenarios supported by careful interpretation (and clear ‘health warnings’ in key publications) provide the best reasonable measure of addressing this problem. May, 2016 14
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6 Success factors and transferability
6.1 Success factors
The success of the Irish approach to skills forecasting is linked to the following:
Time spent being able to develop and refine the model, with an associated
organisational continuity to build capacity for all aspects of the process. As policy
in Ireland has evolved over the last 10-15 years, including the institutional
landscape, the SLMRU has been able to develop and maintain an ‘in house’
expertise that, while responding to the changing needs of the Expert Group that
it supports and of the government, has been able to maintain a focus on
improving the forecasting data and analysis.
A focus on making the best use of existing data sources alongside work to
produce the detailed occupational and skills projections. There appears to be an
acceptance that forecasts provide high-level, indicative evidence, but this
evidence can be enriched when presented alongside comparable occupational
information on the current labour market and skills dynamics (current shortages,
workforce demographics and education level, migration).
The longstanding focus on the occupation as the main unit of analysis has
provided the key for being able to match different datasets. Some datasets are
already coded by the SOC classification, while others need to be mapped to the
common coding system. This can be painstaking activity, requiring reference to
the large coding index, but it provides a highly-granular picture of occupational
prospects.
Relationship building to broker data access, as well as a focus on investing in the
data handling as an ongoing task to build and maintain the National Skills
Database that underpins a wide range of reporting outputs.
The positioning of SLMRU as a unit within the system of public agencies, therefore
being connected to the levers that influence policy. The step change in how the
forecasting data is used as part of the policy-making process, as a consequence
of the economic crisis, has been crucial here.
6.2 Transferability
Certain aspects of the Irish experience are likely to be transferable to other contexts. A
key requirement is to have a central resource within a ministry or public agency to
provide forecasting research and analysis. There is a difference between a public
authority with responsibility for labour market research that primarily commissions
research and a unit whose main focus is on undertaking research and analysis.
The SLMRU is not a particularly large body. It has six full-time equivalent staff. However,
it is arguably able to maximise its impact by focusing on the analysis of existing data
sources rather than managing large-scale primary research. It directs resource towards
data cleaning, handling, storage and analysis.
It is also important to note that the Irish model has been developed and refined over a
substantial number of years. It is debatable whether an agency would have had the
capacity initially to manage the currently available process from a standing start.
However, the over-arching approach of focusing resource on building a central capacity
to try to get the best from existing data sources is an attractive and widely-replicable
approach. The SLMRU perhaps has certain advantages that could inhibit this endeavour
for other countries. Without the macroeconomic forecasts produced by the ESRI there
would be no starting point for producing occupational forecasts. Furthermore, the
national datasets (such as the QNHS) that it draws on provide for a relatively rich
analysis. Hence, although certain aspects of the Irish approach are transferable to other
contexts, attention should be paid to the factors specific in the Irish context.
May, 2016 15Mutual Learning Programme Host Country Paper References Central Statistics Office (2016): Measuring Ireland’s Progress 2014 Behan, Jasmina (2014): Occupational employment projections 2020, SOLAS, Dublin Behan, Jasmina; McGrath, John (2004): The systems for the early identification of skills needs in Ireland, The Skills and Labour Market Research Unit, Dublin Behan, Jasmina; McNaboe, Joan; Shally, Caroline; Burke, Nina (2015): National skills bulletin 2015, EGFSN, Dublin Bergin, Adele; Conferey, Thomas; FitzGerald, John; Kearney, Ida; Znuderl, Nusa (2013): The HERMES-13 macroeconomic model of the Irish economy, ESRI Working Paper No. 640, Dublin Cedefop: Skills panorama – Matching skills and jobs Internet: http://skillspanorama.cedefop.europa.eu/en/skills-themes/matching-skills-and-jobs Department of Education and Skills (2016): Ireland’s national skills strategy 2025 Department of Education and Skills (2012): Critical review: The expert group on future skills needs Department of Jobs, Enterprise and Innovation (2016): Action plan for jobs 2016 Department of Jobs, Enterprise and Innovation (2015): Enterprise 2025 – Ireland’s national enterprise policy 2015-2025 background report Exodea Consulting (2014): Programme evaluation – Momentum programme for projects under the labour market education and training fund – Report 5 Final report, Dublin Expert Group on Future Skills Needs (2016): Guidance for Higher Education providers on current and future skills needs of enterprise - Springboard+ 2016 including ICT Skills Conversion Expert Group on Future Skills Needs (2015): Assessment of future skills requirements in the hospitality sector in Ireland, 2015-2020, Dublin FitzGerald, John; Kearney, Ide – editors (2013): Medium-term review 2013-2020 – Number 12, ESRI, Dublin Forfás / Expert Group on Future Skills needs (2013): Future skills requirements of the manufacturing sector to 2020, Dublin Forfás / Expert Group on Future Skills Needs (2013): Addressing future demand for high-level ICT skills, Dublin Higher Education Authority (2013): Evaluation of Springboard – Second-stage report, Dublin McNaboe and Condon (2015): Monitoring Ireland’s skills supply – Trends in education and training outputs, EGFSN, Dublin May, 2016 16
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