MNI INTERVIEW: UK's ONS Plans Data On Skilled Worker Demand
The Office for National Statistics is developing skills demand and supply metrics at a time when labour market tightness is central to policy.
The Office for National Statistics is looking to better quantify the mismatch between the UK’s demand for labour skills and its supply in different sectors and parts of the country, aiming to publish experimental data on this key indicator of wages pressure later this year.
Gueorguie Vassilev, Head of Skills and Human Capital at the Office for National Statistics, told MNI that new measures should illuminate how regional variations in labour demand and skill distributions can lead to imbalances. His work comes as Bank of England policymakers also examine labour market frictions to better understand stronger-than-expected wages growth since the Covid reopening. (See MNI POLICY: UK Labour Market Tight On All BOE's Measures)
“When you compare unemployment to vacancy numbers, there's the underlying assumption … that in an ideal world with no frictions, no stickiness in the labour market, then those vacancies can be filled by those who are unemployed. Where we're looking to add value is to say who are the people that are unemployed? What skills can they bring, can they match where there is that demand in vacancies?” Vassilev said.
Severe skill shortages were reported in some professional service sectors, such as accountancy and information technology, in the BOE’s business survey cited in its May Monetary Policy Report, though recruitment difficulties elsewhere had eased in recent months
UNRELIABLE SIGNAL
The ONS uses online job advertisements to provide up-to-the-minute information but these cannot alone show mismatches or shortages, and provide a choppy picture of overall demand. Computer textual analysis suggests the number of ads tends to be almost twice that of actual vacancies, and also fluctuates more wildly, as companies post the same ad on multiple platforms, or neglect to take them down once jobs are filled.
High regional disparities raise a further problem for policymakers, with questions over whether workers will be willing to move to fill vacancies or whether shortages will drive up local wages.
Data published by the ONS earlier this year, based on job adverts by profession, showed “that healthcare was one of the hugely in demand types of professions” but shortages were in geographic hot spots, in Wales and around the Scottish border, rather than across the UK.
“At the UK level, we might be masking … quite wide discrepancies lower down. We have seen a bit of that on the demand side already,” Vassilev said.
The new data “will really get into the granular information of occupations, what skills and further down the line …. asking salaries for those occupations for those skills, and how they vary. So there's lots of links into levelling up and understanding the variation of skills and skills distribution as well as how it might lead to shortages, how it might impact economic growth,” he added.