Literacy and numeracy at work

Publication Details

This report looks at the use of literacy and numeracy skills at work, and how this relates to the skills and education of employees. It uses data from the Adult Literacy and Lifeskills (ALL) survey to look at how well employees’ skills match the literacy and numeracy practices that they undertake at work. It looks at how skills and education relate to different sets of practices, such as financial literacy and numeracy. It also identifies which groups of employees are more likely to have a skills shortfall or skills excess, and some of the barriers to further training for those with a skills shortfall.

Author(s): David Earle, Tertiary Sector Performance Analysis and Reporting, Ministry of Education.

Date Published: February 2011

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Chapter 1: Introduction

1.1 Literacy and numeracy skills used at work

Around 40 percent of people in employment have literacy and numeracy skills below a level needed to use and understand the increasingly difficult texts and tasks that characterise a knowledge society and information economy, according to the Adult Literacy and Life Skills (ALL) survey (OECD and Statistics Canada, 2005; Satherley, Lawes and Sok, 2008). However, there has been limited information about how employees skills match with the literacy and numeracy skill tasks they undertake in their jobs. Information on this is important for understanding the extent to which having low literacy and numeracy is a significant issue for job performance and where initiatives to address literacy and numeracy in the workplace can best be targeted.

This report makes use of data from the ALL survey to develop a profile of literacy and numeracy job practices and look at how these match with the skills and experience of employees. The report addresses the following questions:

  • What are the different types of literacy and numeracy practices at work?
  • How do these literacy and numeracy job practices relate to measures of job type and skill?
  • What is the relationship between the skills, qualifications and experience of employees and the literacy and numeracy practices in their jobs?
  • What is the extent of match and mismatch between the literacy skills of employees and their literacy and numeracy practices at work?
  • What access do people with low skills and frequent literacy and numeracy job practices have to further education and training?

1.2 Research to date

Previous research in New Zealand shows that literacy and numeracy in English are related educational level, and also to other factors including first language and computer use. Literacy and numeracy skills are recognised and rewarded through wages, particularly for people in higher-wage jobs.  There is a definite relationship between literacy and numeracy skills of employees and the literacy and numeracy practices of their jobs. However, there are a number of people who appear to be under-skilled or over-skilled for their jobs. People with low literacy and numeracy are less likely to access job-related training, particularly non-formal training.

Factors associated with low literacy and numeracy

Literacy and numeracy skills are related to education level, as well as to other factors.

People who have low literacy and numeracy skills generally have low educational attainment. However, there is a significant group of people with low or no qualifications with adequate literacy and numeracy, and conversely, some people with tertiary qualifications have low literacy and/or numeracy (Ministry of Education 2009, Smyth and Lane 2009 and Lane 2010).

People with low literacy and numeracy in English also include a significant group of recent immigrants with English as an additional language. This includes a significant proportion of people with degree qualifications and above (Earle 2009b and Lane 2010).

Low literacy and numeracy is also strongly associated with not using a computer at home or work. Use of a computer for work is strongly associated with being in a professional, technical or clerical occupation and with undertaking a wider range of regular work activities related to literacy and numeracy (Lane 2010).

Lane (2010) found that it was the combination of education, first language and computer use that most clearly defined the population with low literacy and numeracy skills in English.

Literacy, numeracy and work

The ALL survey shows that there are workers with low literacy and numeracy skills in most industries and occupations in New Zealand. Industries with a larger proportion of workers with low literacy skills include agriculture, manufacturing, transport, retail trade and accommodation and food services. Workers with low literacy skills are more likely to work as labourers, machinery operators and assemblers, drivers, personal service workers, sales workers and agricultural workers (Dixon and Tuya, 2010).

Literacy and numeracy skills are associated with wages. This suggests that the literacy and numeracy skills of workers are generally recognised in their jobs and reflected in their pay.  However, this additional recognition is much greater in higher paid job than in low paid jobs. Earle (2009a) found that a one standard deviation difference in literacy or numeracy accounted for, on average, a 20 percent difference in hourly wages. When literacy or numeracy skills and qualifications were considered together, the difference was reduced to around 10 percent.  Earle (2010) went on to show that it is people who were in higher wage jobs that gained the most additional benefit from having higher literacy and numeracy skills. For people earning under the median wage, there was a much lower association between skills and wages. Experience was also has a strong association with higher wages in high wage jobs, but not low wage jobs.

Ryan and Sinning (2009a) explored the relationship of literacy and numeracy use at work and literacy and numeracy skills in Australia. They found that workers with higher literacy and numeracy skills used them more often at work than workers with lower skills. They found evidence for increased use of literacy and numeracy at work from 1996 to 2006. Their analysis showed that literacy and numeracy use also increased with educational level.  They found that literacy use increased with age and was similar for males and females, while numeracy use decreased in the older age groups and was higher for men than for women.

Lane (2010) found that the number of different types of reading activities undertaken at work was strongly associated with higher levels of literacy and numeracy. Furthermore, people who used computers at work were much more likely to do three or more different types of reading activities. A similar result was found for writing activities. This finding reinforces the idea that of the computer as “the primary literacy and numeracy tool in the modern workplace.”

Skill match and mismatch

There has been very little information available on skills mismatch within employment. The 2008 Business Operations Survey collected information from employers on their perceptions of internal skill shortages. Half of firms in New Zealand reported having staff who were not sufficiently skilled to do their job. Businesses were more likely to report these staff to be in lower skilled occupations, such as labourers, clerical sales and service staff and tradespersons. Lack of experience was the most commonly reported reason for staff not having sufficient skills. Customer service and sales was the most commonly reported area where staff needed to improve their skills. Oral communication was also commonly reported. Written communication and numeracy were less often reported (Statistics New Zealand, 2008).

Krahn and Lowe (1998) used data from the International Adult Literacy Survey to compare the frequency of literacy and numeracy tasks at work with the literacy and numeracy levels of workers in Canada. They concluded that the majority of Canadians were employed in jobs where the literacy and numeracy practices more or less matched their literacy and numeracy skills. They found the larger mismatched group were those with high literacy and numeracy skills and apparently less frequent literacy and numeracy job tasks.

The first international report on the ALL survey also looked at skills match and mismatch, following the methodology established by Krahn and Lowe (OECD and Statistics Canada, 2005). They found for all six countries that participated in the first round, that there was a good match between literacy and numeracy skills and literacy and numeracy job tasks for the majority of employees. Between 10 to 30 percent of the workforces were under-skilled for the frequency of literacy and numeracy job tasks. Of the six countries covered, those with higher average literacy and numeracy were more likely to have a greater proportion of workers who appeared to be over-skilled for the frequency of literacy and numeracy tasks undertaken in their job.

Ryan and Sinning (2009b) looked at literacy and numeracy use at work relative to literacy and numeracy skills in Australia. They found that workers whose literacy skills were around average had the greatest job complexity relative to their skills. Relative job complexity was lower for low-skilled workers, suggesting that literacy use was less relevant to their jobs. It was also lower for high-skilled workers, suggesting they had few opportunities to apply their high skills in their work. The relationships between numeracy use and numeracy skills revealed a different pattern, with relative demands being highest for the lowest skilled workers.

Access to further education and training

Lane (2010) found that people with higher levels of literacy and numeracy were more likely to have undertaken formal or non-formal education and training in the previous year. Lane also found that people with higher levels of completed education were more likely to participate in education and training. And, at each level of completed education, those who had higher literacy and numeracy skills were more likely to participate in further education and training.

Dixon and Tuya (2010) found that people in employment aged 25 and over were as likely to access formal industry training or provider-based education irrespective of literacy levels. However, lower literacy employees were less likely to access short, non-formal courses and employees with very low literacy were somewhat less likely to attend formal courses. Also low literacy employees who only had school or no qualifications were less likely to participate in formal study.

Ryan and Sinning (2009b) found in Australia that employees with higher educational achievement were more likely to participate in further education and training.  However, this effect was not significant for formal education and training. Their findings suggest that workers were more likely to undertake training courses if they had higher literacy or numeracy job practices compared to their literacy and numeracy skills. However, they were only more likely to participate in formal education and training if their literacy job practices were high compared to their skills.

People do not necessarily have a good sense of their own literacy and numeracy skill levels. The ALL survey asked respondents to self rate their ability with “numbers and calculations”. When this self assessment was compared with the actual assessed scores, 73 percent of people with low or very low assessed numeracy rated themselves as being good with numbers and calculations. People who had low numeracy but assessed themselves as being good with numbers and calculations were more likely to participate in formal education, than those with low literacy who had a more realistic assessment of their own skills (Satherley, Lawes and Sok, 2008).