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Enterprise skills are important but not at the expense of specialised skills

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Enterprise skills are important but not at the expense of specialised skills

Enterprise skills seem to be top of mind for many people in education and training these days, and at first glance it is not hard to see why. In an era where technology is disrupting industry after industry and young people are told their career might span multiple sectors, it is understandable that enterprise skills – those that are useful for multiple employers across a wide range of industries – are in vogue.

There is no doubt that enterprise skills are important. But if educational institutions are encouraged to give them greater emphasis, we need to consider what they are giving up to do so. And if enterprise skills are being taught in the place of specialised skills – those that are specific to a particular industry – it is not at all clear that students receiving training will be better off.

We have spoken to hundreds of employers and done a deep-dive analysis into millions of job advertisements, thanks to our partnership with Burning Glass, and found some eye-opening results that challenge the trend toward enterprise skills.

Employers are looking for Aspiration, Application and Aptitude

When we think about what vocational skills students should be learning, the needs of employers ought to be front of mind. There is little benefit in producing graduates with limited job prospects, so we need to equip students with the best chance of employment once they finish studying.

But what are employers are seeking?

As a leader in Nous’ skills practice, I have talked to more than 200 employers of all sizes about their skills needs, about whether the education system is meeting those needs and about how they can work with educators to improve provision.

Among those I spoke to were a multinational tech company struggling to find workers with the required blend of technological and management skills, a medium-size construction company in a regional area that could not fill its apprenticeships despite high youth unemployment and a family-run agriculture business unable to find staff with a strong commitment to the industry.

I have found that a diverse range of employers are generally seeking three things from applicants:

Aspiration, Application and Aptitude

The views among employers were remarkably consistent on Aspiration and Application. Passion for a career and a willingness to work hard were considered non-negotiable by employers when selecting their future team members.

But attitudes toward Aptitude varied much more, spread across a continuum. At one end were employers who said, “Give me someone with potential and I will train them”, while at the other end were employers who said, “Give me someone who has the skills in my industry to hit the ground running”. Most employers sat somewhere in the middle, depending on how hard they found it to secure skilled employees.

For students, educators and employers divergent approaches to aptitude raises some critical questions:

  1. Are students and applicants given adequate opportunities to experience an industry or occupation before they commit years of their life to building the skills needed to be successful? In a recent pilot run by the Apprenticeship Employment Network, 50 per cent of students changed their career preference after being exposed to their preferred and alternate occupations.
  2. How do we best prepare students to be work-ready? As the Business Council of Australia argues, “developing work readiness is a joint responsibility between the individual applying for work, their family, the education system, business and government”. While responsibility remains with the applicant, other actors play a role to provide the exposure and opportunities to learn.
  3. Does upfront learning really serve the best interests of students and employers? There is strong appetite for programs that combine modularised learning with employment, particularly among smaller employers. Some employers expect a work-ready graduate who can be productive from day one, so these employers are less likely to invest in training.

Specialised skills are in demand for individual jobs

Another way to understand what skills employers are seeking is to look at what skills they seek in job advertisements. To explore this question, Nous Group has partnered with Burning Glass, an analytics software company that provides real-time data on job growth, skills in demand, and labour market trends.

Together we have analysed 7.4 million unique job advertisements from around Australia. These job advertisements cover every sector of the economy, from mining to services, and every level of seniority, from entry-level positions to the C-suite. In total, 672 occupations were included.

Lately we have been particularly keen to see what this data tells us about the debate between enterprise skills (which are also sometimes referred to as 21st century skills, employability skills, soft skills, baseline skills or transferable skills) and specialised skills. Burning Glass analysed the skills desired by employers, ranking them in the employer’s order of importance.

It was clear that enterprise skills were the most frequently cited skills; a handful of common, transferable skills appear in many job advertisements, such as communication, teamwork, planning and a detail orientation. This should be no surprise, given these skills span most occupations.

But analysis at an occupational level reveals that enterprise skills rapidly fall down the list of desired skills.

A handful of common skills appear in many job ads

Communication skills were a top 10 skill for every occupation. But no other enterprise skill appeared in the top 10 skills in more than 60 per cent of occupations. And when enterprise skills were on the list sought by employers, they had an average ranking of between 5 and 8. In other words, specialised skills were more frequently cited by most employers.

When people are applying for a job, they are not applying for the average of all jobs. Instead they are applying for a specific job in a specific organisation in a specific sector. And analysis at this level shows that specialist skills are in demand.

To understand these skills needs, we looked at the top 10 skills sought by employers for three particular occupations: registered nurse, plumber and accountant.

For these occupations we found that specialised skills ranged from four (registered nurse) to eight (accountant), with employers seeking a narrow range of skills that were specific to the occupations in question.

Different occupations have different skill profiles

There is no doubt that enterprise skills are important as we skill up young people or help people later in their careers make transitions. But these enterprise skills cannot be at the expense of specialised skills.

There is clear evidence that specialist skills are valued but must be renewed over time as they lose their relevance. Research shows STEM graduates earn higher wages initially – but these returns decline by more than 50 per cent in the first decade of working life.[1] And countries that emphasise apprenticeships and vocational training have lower youth unemployment rates at labour market entry – but higher rates later in life.[2]

Collectively these suggest a balance is needed between skills that stay with you over a career (enterprise skills) and skills that have a more limited life (specialised skills).

For educators, large employers and governments, the data is now available to explore skills needs in much greater detail than previously possible.

Understanding both the micro markets for labour and the skills that make the greatest difference (specialist or enterprise) is critical in creating a responsive education system, in meaningfully and sustainably developing the workforce and in fostering a productive and competitive economy.

The opportunities that lie ahead are great.

Get in touch to find out how your organisation can harness the potential of skills data to meet future workforce needs.

 

[1] Deming, D. and Noray, K. (2018). STEM Careers and Technological Change. NBER Working Paper No. 25065. National Bureau of Economic Research

[2] Hanushek, E. (2017). For long-term economic development, only skills matter. IZA World of Labor.