Britain’s biggest skills problem is that many firms don’t value them
economist.com
economist.com
The only place I have found this not to be true is in finance, where there is a clear incentive to reduce operational costs in order to increase the bonus pool. In engineering, tech, healthcare (almost everywhere in local govt), actually acquiring skills is pointless (if you are able to nepo your way into a management role).
That is how you end up with large numbers of over-qualified people simultaneous with low productivity. All the subsidies and incentives for firms to train staff make no difference, we have all the skills we need but the price of those skills is very low.
The problem is management competence. Most managers are also unskilled, even managers with technical skill usually come into management after graduating not after working at a lower level.
This kind of mismanagement happens everywhere but is the rule in the UK. The US is quite far from perfect, but the UK is not even close to this level yet. We are still at the level where the system is not working.
Most middle earning jobs don't need hard skills anymore, so most of employees gradually lost them over the time (and not the opposite, like a muscle). The gen-Z is additionnaly often missing the most basic soft skills : basic, social skills, punctuality... or even coming to work at all.
So we are gradually building a generation where about two-thirds of people have... no more or almost no skills whatsoever. Can't change a wheel, can't swap a breaker, can't replace a tap, can't do more than basic IT-assisted tasks in a predefined process. More and more youngs must try hard to get their driver license, and so city dwellers conveniently skip it (but a good thing in the end). To the point that basic maths are a thing of the past for them. Perhaps 10% are currently able to write this very comment. Let's not even talk about financial education at this point, more than 60% fail at giving you the right amount of two years worth of an account interests.
I can witness that even business holders are gradually losing skills at running their own businesses those last two decades. Their skill in the differents subjects they must address all day long are almost all declining, even their core ones. They don't want to make longer work hours anymore than their employees and want to "Netflix and Chill" like everyone else.
Remains about the 20% skilled, but I have the feeling that over the last 20 years their portion is progressively shrinking. Lack of forecast made health pro number dwindle, "true" engineers (mechanical/electrical/civil) are harder and harder to find since a non-negligible part of them leave the country after completing their studies.
Are we going to make Idiocracy a reality sooner that expected ?
- France has significantly higher productivity per hour than the U.K., but possibly this is due to workers working fewer hours. France has also had (slightly) better productivity growth since the financial crisis
- Is it actually relevant for young people to be able to replace taps or whatever? Cars are more reliable these days so there are fewer forced learning opportunities. If you are young and live in some city apartment, maybe you don’t even drive and maybe you shouldn’t be doing DIY plumbing on a property you don’t own. But these also feel to me like quite arbitrary standards – most young people likely have jobs that don’t require them to know how to change a tap and when you were young, your jobs likely didn’t require you to know how to use the Internet (or whatever – I don’t know how long ago you were starting work).
- If you look at the standardised international measures for things like literacy and numeracy, you’ll likely find that (1) the highest level feels like a pretty low level of ability to you and (2) a percentage of any developed country you pick won’t perform at this level, and you’ll likely find that percentage surprisingly high
- So, maybe there’s also an effect where the older people you interact with have picked up random skills over the years and become more ‘stratified’ such that you are less likely to interact with someone whom you think doesn’t know much but the young people you meet haven’t had so many of these random chances and are a more representative sample of the general population?
I don’t know anything about the situation in France though. Maybe you’re just plain right.
France runs with very high unemployment (the UK's peak unemployment rate in 2008 was roughly the same as French unemployment rate at their economic peak in 2019), which naturally means higher productivity of those working.
France is also far more geared towards exports and large companies, which does produce relatively high levels of output per capita. But often doesn't mean high levels of consumer welfare.
Comparisons are difficult but Europe has this problem in spades, and many countries lack the educational institutions as well (although not in the case of France)...so the situation is even worse because no-one has any skills. I don't think anyone is really doing better, everyone just needs to catch up with the world.
I should have more emphasized on the long-term tendancy : almost all lights are now red in France (and not so better in the UK) :
- Educational system is in shambles. Not enough manpower, not enough funds, too many kids per classroom. Level is steadily dropping. France's PISA ranking is getting worse and worse.
- Health system is on his knees, and the decision to fire (without pay) the unvaccinated health staff put a additional strain upon it. Thousands of them left for Quebec.
- National debt is higher than ever.
- A great portion of the French GDP is in fact born from the pensions spendings (legal age for retirement was 62 till now, and 26% of the total population is 60 yo and more) and public workforce (12,4% of total GDP, very similar to northern europe).
- We lost most of our nuclear workforce and engineering because the plan was to phase out nuke power plants for renewables... until two years ago. I Have a part of my relatives directly involved in nuclear power production field, now retired and they lament the loss of the once respected french "expertise" (well, mainly bought from Westinghouse but cough).
- Big compagnies still perform well (especially luxury companies - thanks China), but the other industrial ones are outsourcing/offshoring production at an alarming rate (the plan was to relocate and reindustrialize, but this was also before the energy crisis). Not much hope here.
Consequently, spendings being high, labour costs are also high (too much, if you ask me). Even if 26% are 60 yo or more, we still "benefit" from a quite high immigration, but we aren't quite able anymore to make the better of it because of the failing public education system.
Forecast are not particulary good, hence the pressure from the EU commission to reform the French pension system and target 65 or 64 yo as legal retirement age.
In fact, very similar to the UK, with more socialism ?
For the "young ones" (I'm 40), I fear that they won't be able to acquire the skills they need if they don't have the basic knowledge (numeracy and literacy foremost) and softskills layer they are currently losing.
The UK is exactly the same btw. One of the changes the current govt is looking at is trying to stop the streamlining of students at 15 into humanities and sciences by making everyone take maths up to 18.
I think the stuff about basic skills is also correct but perhaps orthogonal. Quite agree but it makes us sound like old-school types. I have noticed that younger people don't like using the phone, it is...not good. But I think young people can learn, I worry more about older people preventing their growth.
My observation is that in general managers are optimizing the thing that personally benefits them the most: their pay, promotions and careers. The company doing well has rather little impact on that so they don't optimize for that. Promotions for managers either in the same company or at a new company are often based on headcount they managed. So they focus on making the team grow irrespective of value from that. Their bosses are aiming for the same thing so everyone is aligned.
It's not incompetence but a lack of belief that helping the corporation for the sake of helping the corporation is of any value.
But the example I gave is more prevalent within engineering generally. Engineering grads will hope to either work in banking or go directly into management scheme (GE was the premium one...when GE was big, defence is the other big one). The pay for actual engineering work (outside O&G) is very low, and only attractive because PHd work is even more exploitative.
Gotta be somewhat careful about these kinds of characterizations, though. A lot of support staff may not be doing things that are directly producing profitable output for the company, but they still provide necessary services (and, well, support) that enable the people who are "line workers" to be more, and more consistently, productive.
A great example is IT, especially in a non-tech-oriented company. Without a competent IT department, your workers will struggle every time there's a bug, or the power goes out, or they forget their passwords. And yet, as has been seen all too often, IT is a "cost center". And, indeed, it's not at all uncommon for there to be many incompetent IT people in a given large company, who are exactly the kind of unproductive drag on the business that you describe.
My point, ultimately, is that any attempt to divide employees into "produces value, good for the company" and "unproductive, bad for the company" cannot be done by simple categorization; it requires actually evaluating the individuals' contributions. Which, exactly as you say, far too few managers are actually capable of doing.
Imo, banks are the rare example of an industry that has moved with the times in the UK (largely because many of them, even the British ones, are run and managed by non-UK people). They are far from perfect, but you don't see bankers getting paid the same back-office admin guy...that does happen in engineering though.
Imagine replacing middle managers with basically dictation and tracking personnel and delegatingdecisions and report to chatgpt.
His conclusion was: programmers are getting replaced, and he will replace them.
In reality, he will get replaced because all he is doing copy-pasting snippets. To actually build a full system that will slough away staff requires domain knowledge that a chatbot doesn't have. ChatGPT will come first for the people using it most now.
I often think about starting a business-process outsourcing company in the UK. I know there are companies in Japan (also a country known for overhiring). But then you talk to managers about their processes, and you realise they genuinely do not understand anything about technology...it is just pointless, like trying to teach German to a chimp.
The stuff you see in local govt/healthcare would bring people on here to tears. The local govt was trying to hire people to improve processes...their listed tech contained no programming languages and just included managed services. You see tech roles, and it is all the same: just managed services, no actual coding...it is incredible.
you talk about hiring under-qualified people, but they also hire over-qualified people and don't know what to do with them.
I got hired out of university as a "data scientist" in the govt; but it turned out they actually didn't have any data science to give me. they just slotted me into the same excel clusterfuck workflows they always had. the inefficiency was unimaginable, it was like the spreadsheet dark ages. i tried to clean things up on my own initiative, automate them, have proper version control and data pipelines in code rather than manual steps described in piles of word documents; but I was the only person in my section of the org chart who had the skills or even cared about the problems. I could make things better in my tiny corner, but everyone I had to work with was clueless, so there was only so much I could do. so I just quit out of boredom and frustration.
then I got a SWE job for more than twice the pay.
People in the UK talk about the skills shortage...your comment is exactly what I say in response: what shortage do we have of universities? What shortage do we have of young people willing to use their skills or learn new things? What shortage do we have of job applicants in these roles? We have all the people but go into almost any company (or govt), and look who is managing. It isn't only old people either, I remember interviewing for a place that has had open roles of years, missed the upturn...I interviewed and said told him I hadn't done a11y front-end before (this was full-stack), it was a deal-breaker...as if I could never learn another thing in my life....this guy was a dev.
The thing with govt really gets under my skin because it is so bad and the country needs better. The upside is massive. It is excruciating.
All our trading was done by computers, with everything written to a database.
I show up at the fund admin's office, and what do I see? There's two young guys my age sitting there with the printed trades, thousands of them... typing them into a computer. One typing, one double checking. They had been at it for days when I arrived.
When you think that OEICs actually have to trade at that number too...scary.
I have seen this in funds too. I knew one place that had school leavers booking their trades on internal system. They weren't high-frequency but I remember the guy showing me round, and he had three of these guys stacked up in this cupboard with Excel.
Where can I find those Type-I organizations that Dominic Cummings keeps banging on about?
They don't exist. Cummings doesn't live on this planet (he hasn't even had enough experience in govt to be called a bureaucrat, he has just had a host of jobs due to family connections...he is the thing he complains so much about).
There are still firms that make things eg Aerospace, and there are orgs that do good work, but you won't get paid anything sensible.
Don't forget you can work remote as well.
I often have an imposter syndrome,but it looks like the bar is really really low.
Complaining about govt is eternal though. My local council offers unskilled, internal-only jobs at pay levels similar to dev jobs in the private sector at the same level of seniority...and the council has twenty people to the job of one person...what can you say?
My monkey, just told you to "vaffanculo", but s/he genuinely does not understand anything about spiecies. Which is where i dodged a bullet...
That is the first thing I can think of where it doesn't need to be particularly connected to reality.
Even fiction needs to have long-term coherence; propaganda can be "arguments as soldiers".
- some developers don’t want to work
- some developers have no social skills and work to ruin the morale of everyone else on their team
- some developers don’t want to interact with the client or the business
- some developers don’t want to do anything that remotely looks like project management or agile or otherwise.
- some developers have no idea what the business does or how to meaningfully contribute as engineers
- some developers don’t want to pair, mob or provide training of any kind to junior engineers
- some developers don’t want to participate in interviewing or recruiting others on the team
- some developers just want to write code and go home
there’s a reason we have middle managers and until devs want to do more than “just write code” than…
…there will always be middle management in engineering.
This is the only good point here. The truth is, middle managers exist because technical work is seen lowly anywhere the management is stupid enough to think that technical competency is easy to acquire.
Also, these developers that never participate are usually the ones that get promoted to middle management.
Managers that do not value technical competence very often think that it is easy to acquire; that it only takes a few years of work, and / or that being able to interface with computers is a rather banal skill. This makes them grossly undervalue people that work with software / computers. Middle Managers are hence elected as buffer between them and the "peasants" (AKA "IT Guys"). Usually, these middle managers are elected right from the peasantry, and often it's the person that sticks out. This is also often the least technically competent member of the team / department.
“Hello individual contributor, this is WorkGPT, you have completed 6 TPS reports, and your minimal quota is 2. Rectify the situation immediately or join the PIP program.
Have a Nice Day!”
It's unclear which jobs with be enabled with more productivity vs replaced completely.
As a software engineer, basically all the skills I use to do my job on a day to day basis are things I've learned from experience, or informal mentorship from other engineers, or reading blog posts on programming practices and then applying those things and seeing what works and what doesn't.
But to an economist none of this counts. A 24 year old that just started their first job after getting a masters degree in CS is considered objectively more skilled than someone with an undergrad degree and 10 years of experience.
In practice, how well this works depends on how effectively employer and training provider coordinate, and how committed the employer is to delivering on the mentorship part.
Working in another field (public services might be a good example) it’s often not possible to test out hypothetical solutions, or find relevant expertise, or to even discover that whole areas of knowledge actually exist. In that context, relevant qualifications have a little more weight.
Not my experience they don't want these people on the Netherlands not with my skin colour I guess.
The full list is here: https://www.instituteforapprenticeships.org/apprenticeship-s...?
Top 3 on the list: Space systems engineer, accounting finance manager, robotic systems engineer
In any case, people leave because they are unsatisfied and/or underpaid so if the company has that covered attrition will be low.
This is a win-win deal with absolutely nothing 'morally wrong'.
(I'm hypothesising wildly, this isn't necessarily accurate).
It's a bit of a daft situation really. Companies spend far too much on hiring that could be going on wages. My wages specifically. :)
This was brought home (pun intended?) to me back in 2015 when my wife and I were vetting realtors for the sale of our house. One of the realtors, actually an 'elderly' husband and wife, after being told (by me) that I was a software developer proceeded to share that they had retired from working in HR at a software company and went on with 'oh my, don't you know how crazy and entitled those ridiculous software developers are!'
That wasn't their first misstep, and we went with a different realtor.
Stop rewarding bad behaviour with bailouts.
The UK acquired the same firms, went full ham on regulation, and there has been massive corporate deleveraging because most banks don't really do corporate lending anymore.
However, any firm that did have existing finance relationships was grandfathered in. Rates fell, and so these old inefficient firms have largely survived hoarding both labour and finance (the UK also has a disproportionate number of very unproductive family-owned firms).
The UK is the textbook case of finding the absolute worst thing to do at the worst time. I wouldn't say the issue is necessarily bailouts but regulators (and particularly the BoE) not understanding that the financial cycle plays a role, that bureaucrats shouldn't be intervening into management decisions by banks, that fiddling the price of money has trade-offs...I agree, but the decision to bailout is a product of beliefs that continued to damage after 2010 (and this was far less the case in the US, the bubble in tech stocks/SPACs/etc. demonstrates that the system is still alive...this didn't happen in the UK).
1) Managers often don't know what skills people lack or how to take them a few steps up using new skills. Usually these are not the core skills people need to do the job. For instance, an accountant could do a decent job, yet only have basic knowledge of excel. The accountant's manager, depending on the complexity and the psce of the company,may or may not be aware of it. Everyone's happy the way it is. However, if the accountant knew Excel better, some tasks would take only half the time, whilst others could be automated and so. This is extremely common in a lot of companies
2) People don't want to upskill. Yes, I'm aware it's a blanket statement, however both as a manager and simply as a colleague, I found this to be the case. Very few,even if they are aware of the problem( e..g. skill shortage) try to address them. I can't count the number of times I told people to at least try to learn x, because their job would become much easier and they'd get more money. Nope, not interested.. Also, actively offering people time and access to learning resources don't seem to help much either.
How much more money? I'm frankly not sure there is any skill you can learn on your own (without full-time commitment and/or paid formal education) in a reasonable time that would make financial sense for a typical 50k/year office clerk to learn, at least not in the UK.
The closest to this would be software engineering, but even then, it would take you ~10 years of experience to reach the level of a proper senior software engineer, and even that only gets you 80k on average in the UK - a sizeable chunk of which will get stolen by the taxman.
10 years of effort starting from scratch to not even be able to double your salary (and again, the net salary is even smaller, as taxes increase) is not a winning strategy. You're better off bullshitting and playing office politics to move up in the pecking order at your current company and increase your salary that way.
There are lots of things people can learn in a relatively short period of time that would benefit them. It may not be financial reward at first, but being able to draw the necessary insights, do things faster and more efficient are beneficial the many.
one thing to consider is that they may have been bitten by this kind of talk before, possibly at the jobcentre. "go on this training course, you'll get a new role with higher pay" -> then it just never materializes. or they get more responsibilities piled on, but the higher pay mysteriously never arrives. so apathy sets in.
it helps that we are working with less common tools to begin with, so i hire people that are willing to learn something new from the day they join.
About half of people in the US with college educations do jobs that don't require them. For most of the US population, college is not cost-effective.
This is going to be a problem as the US is forced to get back into manufacturing in a big way by world events.
It's fine to hire people 'without skills' provided that you give people an incentive to get them-- i.e. you pay them more if they have skills, and a lot more. If it's well-known that workers with skills command high salaries, then workers will train themselves or acquire the certificates that bring those higher salaries.
Britain's failure is in having bad compensation for workers, and being unwilling to give them incentives to acquire skills.
The answer is that these low skilled jobs should be eliminated by more automation - which is great - but then you need to find a lot more higher skilled jobs for everyone to do.
I think the UK has ceased investing as much in skills because every upskilling in office work or having more workers with the necessary degree is largely net zero competitions between marketing departments that will most likely all be in the UK.
For countries that were not traditionally on top and running the industry consortiums they have a small chance of pulling the income from countries like the UK.. But mostly their workers just end up over skilled for the work available for countries like Spain.
The price of low skill labour in the US has been increasing, I think. I don’t know if that’s because of increased demand or reduced supply or something else though.
A second problem is that non-tech companies lacking competent in-house technical expertise will always choose to outsource it to a shitty consultancy which will take advantage of them, waste years and not deliver anything viable or cost-effective in the end.
I think that’s not actually true because people have incomplete information. I think it’s also not static – for example it’s much easier to automate ordering of your product, arranging payment, etc, now than it was 20 years ago, even though the technology for forms/payments over the Internet still existed back then.
To be clear, when I write automation, I don’t really mean automating whole jobs but rather automating the bits of jobs where people don’t add value so that they may spend more of their time doing the things that add value.
When it’s time to hire, you want someone with 40 years of rust experience, who is under 30, and is a 20x rockstar.
If jobs were a thing that not everyone had to do, and it drew in passionate people who really just want to do that work, not only would we have more efficiency and creativity. We’d also have more job satisfaction and probably even faster absolute progress.
This situation is only going to get worse. Our economic system is very sticky and the expectation of everyone has to work makes people “feel good”.
Introverts who prefer to stay anonymous and private because they value privacy, having contact with as a few people as possible, will always come off worse.