'Growing the local economy now'

IoD Northern Ireland launched their Skills and Workplace Forum Report today. Five interesting recommendations in the report, plus views from the panel that followed focusing on skills imbalances affecting economic growth here. 

The IoD says the skills landscape in NI is unsettling with around 4,000 workers shy of required labour market needs. Having spent some time reading through it, I've pulled out to some of the main points.

Understanding the Skills Challenge

Setting the scene, the report mapped out how skills shortages have far-reaching implications for economic growth, leading to increased labour costs, lower productivity, slower adoption of new technologies, and reduced tax revenues. These shortages not only constrain business productivity and innovation but also result in higher hiring costs and increased staff turnover. 

According to the report authors, the complexity of the skills landscape requires a multifaceted approach to develop sustainable solutions. Key to this is ensuring that skills training aligns with the needs of the labour market, supporting individuals to enter and stay in work long-term.

Starting point: the Apprenticeship Levy

The panel were invited to pull out one thing from the report as a possible starting point. The one thing that could move the dial immediately was the Apprenticeship Levy (here's a link to the DfE webpage explaining what this is).

Introduced to fund apprenticeship training, its implementation here has created a competitive disadvantage for local firms compared to those in GB. Currently businesses lack direct access to the £80 million fund, limiting their ability to create flexible employment opportunities and train the workforce effectively.

To rectify this, the report recommends changing how the Apprenticeship Levy operates locally. Specifically, it should be ring-fenced for labour market partnerships, skills development, and lifelong learning, similar to the Skillnet model. By securing new funding arrangements and collaborating with local businesses and the UK government, Northern Ireland can enhance or even rethink its skills infrastructure.

Other Recommendations

1. Reducing economic inactivity: Addressing the high incidence of sickness-related economic inactivity through a holistic skills model and unique partnerships across sectors.
2. Greater engagement with schools: Enhancing career guidance and integrating business insights into education through targeted teacher and industry exchanges via school boards.
3. Improving access and widening participation to entrepreneurship, vocational and academic routes: Ensuring fair access to various educational and career pathways while promoting entrepreneurship and retaining local talent.
4. Making childcare work for everyone: Supporting scalable community-based childcare solutions through innovative funding mechanisms and strategic collaboration.

Kathleen O'Hare from the NI Skills Council spoke well around bringing teaching and business professions together to exchange and engage more around skills needs. I read more into the question of future skills needs which brought me to the last NI Skills Council meeting where there was a very detailed update from John Healy (prior to appointment as head of Invest Northern Ireland ) covering his engagement with the US Special Envoy Joe Kennedy III at the Investment Summit last September. 

The US delegation’s stated ambition was to bring $7 billion of investment into Northern Ireland. In John's view, "there is recognition of the real talent that exists in the Northern Ireland labour market, but also recognition that the talent pool needs to grow substantially to support Northern Ireland’s potential; skills supply is the most significant constraint to business development.”

These are pressing issues and the near to medium term value of solving this has a substantial reward figure attached to it (and that $7 billion refers mainly to digital and ICT sectors).

Sadly, I wasn’t able to hang on for the Economy Minister Conor Murphy's contribution, but it’s very positive and timely for a report of this quality to be produced and addressed by the Economy Minister at a time when many business leaders are thinking about US investment (following Joe Kennedy's whistle-stop visit this week).

The Economy Minister is already moving in a direction that aligns with the IoD recommendations. Last month Murphy revealed he is also assisting the Education Minister in developing a new scheme to make childcare more affordable. This level cross-departmental collaboration is so important to driving the change outlined via today's report, and is an example of how today's five recommendations can find quick and practical implementation.

Louise Smyth Lorna McAdoo Chelsea Brennan Kirsty McManus Dip IoD, MBA Patrick Gallen Andrew Brownlee Grant Thornton (NI) LLP MCS Group | Your Specialist Recruitment Consultancy SONI - System Operator for Northern Ireland Sentinus