Technological, demographic and environmental changes – so-called mega trends – are just some of the shifts reshaping the labour market at unprecedent speed, far faster than previously expected.
It is imperative that skills are now put front and centre of the growth agenda. A system of lifelong learning is needed to fuel labour market resilience and economic growth.
Jobs total is increasing, but not all occupations are growing
For the last five years, the National Foundation for Educational Research (NFER) has been leading The Skills Imperative 2035 research programme to quantify the implications of these mega-trends. We published employment projections in 2022 which showed the total number of jobs was expected to grow, but that almost all this growth would be in higher skilled professional and technical jobs such as engineering, teaching and health practitioners. We identified that 12 million people in England work in mid-to-low skill occupations such as administrators, sales, and warehouse operatives, which are in decline. Our projections suggested that one million of these jobs could disappear by 2035.
A quarter of jobs in high-risk occupations could be lost
However, new analysis which has examined how the labour market has changed since 2022 shows that the pace of change has been more rapid than expected – as much as three times faster for some groups. If these trends continue, up to three million jobs in high-risk occupations could disappear before 2035.
Why these lost jobs matter
In previous periods of change in the labour market, displaced workers have found similar new jobs without creating large-scale unemployment. However, if there are far fewer low skilled jobs opportunities in future, these workers risk being permanently excluded from the workforce at a time when we need more workers because of the growing labour market. These workers tend to be lower-skilled/qualified compared to those in growing occupations. They will need support to upgrade their skills to enable them to transition to growing parts of the labour market.
These changes also pose a threat to young people
Changes also pose a major threat to young people who leave education without the skills and qualifications to access growing higher-skilled jobs. With fewer low skilled jobs opportunities in the future and increased competition from lower skilled workers already in the labour market, they run the risk of being not in education, employment or training (NEET).
We need to build a system of lifelong learning
The impact of these mega-trends on the labour market is very compelling. An urgent response is required. A system of lifelong learning is needed, with a cradle-to-grave approach to skills development at its core. In our report we set out the collective response required from across government, educators and employers.
Central to this response is the need to ensure all young people leave education with a strong base of the ‘essential employment skills’ (EES) – such as collaboration, communication and problem solving. Our research has shown that these skills are already important but will be even more vital in future, especially in growth occupations which utilise them intensively. These skills must be explicitly recognised and developed alongside the teaching of knowledge, supported by a common skills framework that schools and colleges can use.
Also central is the need to reinvigorate the adult skills system. As the rate of change accelerates, so too does the need to help existing workers reskill and upskill, given that over 70 per cent of the future workforce in 2035 are already in work. An injection of funding can rejuvenate the adult skills system after a decade of neglect, decline and fragmentation.
A joined-up, lifelong learning system – focused on both technical skills and EES – is now more essential than ever for delivering economic growth that benefits everyone.
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