https://ukces.blog.gov.uk/2015/09/11/statistics-are-no-substitute-for-insight-and-judgement/

Statistics are no substitute for insight and judgement

Imagine you’re buying a house, what would you do? You'd fire up your laptop, search for ‘estate agent’, and put your cursor on the first house you see, before gladly handing over your hard earned cash. Wouldn't you?

No, of course not. You’d shop around, browse different agents, and investigate properties online. You’d look around each room, drive around the area, check out local amenities and schools, and get a second opinion. You’d think it over, ask your family and friends, imagine where all your furniture will go and even then, you will probably still feel unsure when you go to sign the paperwork.

So when you need to assess your local labour market, why wouldn’t you do the same?

Recently, I read a blog which highlighted a clear limitation of labour market information (LMI), framed in the announcement that Further Education (FE) institutions would be subject to new area reviews. Focused on how well institutions are contributing to economic productivity and responding to employer needs in their local areas, the new area reviews will see Local Enterprise Partnerships (LEPs) take a central role.

There is a need then, for LEPs to be aware of their local labour market; but here lies the problem.

When we say ‘local labour market’ what exactly do we mean? The regional labour market seems far too wide to be local, but street level would be too small to rely on any trends. LEP area seems closer, but there are still distinct sub-geographies that are vastly different, as the blog I read demonstrates. Take the ‘Heart of the South West LEP’ for example; From Barnstaple to Exmouth and Plymouth to Bridgwater, the LEP area covers a geography with 10 FE colleges, 4 Universities, 78,000 businesses, 17 local authorities and a population of around 1.7 million.

How can we provide accurate local labour market information for such a large and diverse area?

Many sources of Labour Market Information, like Working Futures produced by the UK Commission for Employment and Skills (UKCES), provide forecasts of the labour market over the next decade, but do not provide forecasts for geographies below the LEP level. Data below this level quickly becomes unreliable as the statistical base sizes to which the forecasts relate get smaller and smaller.

So what can we do?

As American Librarian Rutherford D. Rogers said, “We’re drowning in information and starving for knowledge”. Information on its own is not intelligence – it must be interpreted and synthesised with in-depth specialist analysis, insights from local stakeholders and individual experiences and perceptions, before we can understand it and use it as ‘knowledge’.

LMI then, is the frame in which you can build a local labour market assessment. It needs filling with local intelligence and insight for it to truly make sense for the local area it considers.

In 2014, UKCES published the guide ‘Information to Local Intelligence: Guidance on Local Labour Market Assessments’, which provides detailed guidance to those generating a local labour market assessment. We think there is a need to bring together information from ‘top down’ data sources with ‘bottom up’ intelligence in order to achieve a comprehensive and meaningful understanding of local skills issues.

The Organisation for Economic Co-operation and Development (OECD) agree, arguing that “raw LMI is only useful to a certain degree; analysis and interpretation is a critical part of converting LMI into useful intelligence”.

There is a wide and valuable range of labour market information – with each source offering its own benefits. Local insights drawn from a ‘bottom-up’ approach based on direct engagement with employers can be complemented with various sources of ‘top-down’ information that provides the framework in which your insights are situated.

There are a number of ways in which you can gather insights from direct engagement with employers. Sending out questionnaires allows you to get views from a wide range of local employers, but may limit the depth of insight you can gain. One-to-one interviews can supplement this by providing rich and detailed insights, or you could even set up an employer panel, gathering insights from group collaboration.

This way, valuable, rich and direct insight from a local level can be combined with comprehensive, robust and reliable information to produce a truly vital local labour market assessment, allowing your stakeholders to make long-term plans based on unrivalled evidence.

Just like the assessments you’d make when buying a house, we think it’s best when you have all the relevant information to hand - only then can you make truly informed decisions.

But we want to hear what you think.

Have you experienced these problems? How did you make sure your assessment included local intelligence? What are the best ways to gather local insights and combine them with wider LMI frameworks?

The LMI Network is a platform for users of LMI to come together and share ideas and expertise. Why not join the discussion on LinkedIn, or tweet your views to @UKCES.

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