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Matching skills to jobs boosts happiness, productivity and innovation

  • better use of skills is associated with improved job satisfaction, while employees who use their skills well are often better paid than those in roles which do not stretch them.
  • employers who better match skills to job roles benefit from improved retention of workers, higher productivity and better industrial relations.
  • policy-makers can boost productivity and economic growth by better understanding the skills that employers need, and working with local stakeholders to help employers make best use of the skills already available to them in their workforce.

Encouraging employers to make the most of their employees’ skills can improve productivity, reduce inequality, and contribute to economic growth, according to a new report launched by the OECD and the University of Warwick Institute for Employment Research.

Governments have traditionally focused on increasing the number of people entering the job market with academic or vocational qualifications.

But many employees report that their skills are not used effectively in their work.

The OECD-ILO report, Better Use of Skills in the Workplace: Why It Matters for Productivity and Local Jobs, finds that putting skills to better use can improve outcomes for individuals, employers and economies, and presents eight case studies demonstrating best practice in improving skills use in the workplace.

For individual employees, better use of skills is associated with improved job satisfaction, while employees who use their skills well are often better paid than those in roles which do not stretch them. Employers who better match skills to job roles benefit from improved retention of workers, higher productivity and better industrial relations.

By better understanding the skills that employers need, and working with local stakeholders to help employers make best use of the skills already available to them in their workforce, policy-makers can boost productivity and economic growth.

Chris Warhust, Director of the Institute for Employment Research at the University of Warwick, and one of the contributors to the report, said:

“Interventions to encourage better skills utilisation face a number of hurdles. With the exceptions of health and safety, employment protection and equality legislation, there is little precedent for public intervention in the workplace.

“Public agencies often face a credibility gap when trying to advise firms on human resources management policies, and the short-term costs of reorganising a workplace to make better use of the skills of employees may deter businesses from making the investment.

“It’s vital that policy-makers should take a strategic approach to shaping how skills are used in the workplace, starting by raising awareness that skills under-utilisation is an issue and building the business case for taking action.”

Among the report’s recommendations are:-

  • Skills utilisation should be identified as a priority across policy areas, and should be the focus of targeted interventions: policy makers in labour market policy, economic development, skills development, and innovation should all consider what they can do to promote better skills utilisation.
  • High levels of employer engagement are required: the report found that the most successful changes are driven by industry bodies, such as employer groups or chambers of commerce. Workers themselves are also key partners in implementing change.
  • Specialised, technical expertise is needed to get employer buy-in: policy-makers should call on the technical knowledge of educational and training organisations, HR consulting firms, and trade unions to help them support employers.
  • SMEs should be targeted with tailored support: SMEs have the most to gain from making the most of their employees’ skills, but many lack the management or HR capacity to develop workforce innovation programmes. Specialist targeted support can help SMEs to make changes in their workplaces.
  • Multi-faceted interventions are needed – both at the level of workplaces and local economies: Co-ordinated approaches across training, employment and economic development are needed to help create an environment in which better utilising skills “pays”, and is a natural decision for firms.

Better Use of Skills in the Workplace: Why It Matters for Productivity and Local Jobs was launched on 2 November 2017 at a conference jointly organised by the OECD, Warwick University, the Work Foundation, and the Centre for Cities.

The event brought together stakeholders from national government departments, cities, Local Enterprise Partnerships (LEPs) as well as business, NGOs and research institutions to discuss the key challenges facing the United Kingdom in building more and better quality jobs.

8 November 2017

NOTES

  • Better Use of Skills in the Workplace: Why It Matters for Productivity and Local Jobs is available here. The joint OECD-ILO report provides a comparative analysis of case studies focusing on improving skills use in the workplace across eight countries.
  • The mission of the Organisation for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of people around the world. The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems, and, drawing on facts and real-life experience, recommends policies designed to improve the quality of people's lives.
  • Established in 1981, the Warwick Institute for Employment Research (IER) is a leading international social science research centre. Its research is interdisciplinary and made relevant to policy makers and practitioners. It is renowned for consistently delivering high quality research. Research questions are tackled in projects funded by a range of public and private sector organisations and through publications in academic journals. IER has built a considerable reputation for its expertise in a broad range of research fields around the labour market and its relationships with the wider economy.

Contact:

Sheila Kiggins,

Media Relations Manager, Social Science

+44 (0) 7876 218166

+44 (0) 2476 150 423

s.kiggins@warwick.ac.uk

READ THE FULL REPORT HERE