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 5: Skills match and mismatch

Main points

It is possible to explore the skills match and mismatch of people to their jobs by comparing their literacy skills and job practices. Using this approach we estimate that 41 percent of people in employment were well matched to the literacy and numeracy skill practices in their work. People with low literacy skills and highly frequent literacy and numeracy job practices can be described as having a skills shortfall. We estimate that 9 percent of people in employment had a skills shortfall on one or more of the job practice scales and a further 33 percent may have had a partial skills shortfall.

Workers with skills shortfalls and partial shortfalls were spread across industries and occupations. The construction and retail and wholesale trade industries had the largest proportion of workers with a skills shortfall or partial shortfall.

People with management responsibilities were slightly more likely to have a skills shortfall or partial shortfall. The results suggest that people with management responsibilities have more frequent literacy and numeracy job practices but not necessarily higher document literacy skills.

There was very little difference in the distribution of skills matches and mismatches by age. While there was little overall difference between men and women, differences were more evident by qualification level.

For people with English as a first language, people with qualifications below degree-level were much more likely to have a skills shortfall or partial shortfall than those with degrees or higher. People with English as an additional language were more likely to have a skills shortfall or partial shortfall than people with English as a first language, even if they had a degree-level qualification.

5.1 Skills shortfall and skills excess

The previous section established that there was a clear set of relationships between literacy, qualifications and experience and literacy and numeracy job practices. These were evident on average across the population. However, there is also considerable interest in understanding the groups for whom these relationships do not hold true. That is, those who have relatively low literacy and highly frequent literacy-related job practices and those who have high literacy and infrequent literacy-related job practices.

People with low literacy and highly frequent literacy-related job practices can be considered as having a skills shortfall. This group can be identified with some certainty from the ALL data - in that they have responded as undertaking a range of regular literacy and numeracy activities. Some caution does need to be exercised in that ALL does to capture the complexity of the tasks. For example it does not differentiate between doing simple repeated tasks or complex irregular tasks.

People with high literacy and infrequent literacy-related job practices can be considered as having a skills excess. There is an international literature which focuses on this group as being at risk of skill decline, according to the 'use it or lose it' proposition (Krahn and Lowe 1998 and de Grip et al 2008). Evidence from longitudinal studies does support the hypothesis that highly skilled people working in lower skilled job can have reduced cognitive functioning over time (de Grip et al 2008). However, the ALL survey does not provide sufficient information to identify which workers are at risk of skills decline. Within the group of people identified as having high literacy and infrequent literacy-related job practices, there will be a number of people using other high-level skills which were not captured in the survey. There will also be people who choose to not to work in a high-demand job to balance other life demands, such family. They may obtain mental stimulation from their activities outside of work. Also, as the survey is cross sectional, it only shows current skill level. Those whose literacy skills have declined due to lack of use are more likely to show up in the 'matched' group.

Within the New Zealand policy context, the greater interest is in the skills shortfall group. These are workers whose lack of skills could be holding back productivity and growth.

5.2 Identifying mismatch

This section uses the job practice scores to provide a general picture of where mismatches between skills and job practices may be found, and the characteristics of the people in those circumstances, particularly those in skills shortfall.

The match and mismatch between skills and job practices were identified using a three by three grid as shown in Figure 18. Job practices and document literacy scores were divided into low, medium and high, with respondents allocated to one of the nine categories. Those with low literacy and highly frequent job practices are described as having a "skills shortfall" and those with high literacy and infrequent job practices are described as having a "skills excess." Those whose literacy category matched their job practices category are described as "matched". The remained are described as having "partial shortfall" or "partial excess".

The upper and lower cut points for medium document literacy skills was set at plus and minus half a standard deviation from the population mean. For those in employment, this produced groups that were roughly 20 percent (low), 40 percent (medium) and 40 percent (high). The cut points for medium frequency job practices were set at 3.0 and 4.0. 4.0 and above represents undertaking all of the tasks in the literacy and numeracy practice set at least once a week. Below 3.0 represents undertaking the tasks only occasionally, if at all.

Figure 18: Match and mismatch of literacy and job practicesFigure 18: Match and mismatch of literacy and job practices.

Note:

  1. Percentages are for the overall skills match.

These points were chosen based on examination of the distributions. While they are reasonably meaningful, they are arbitrary. Choosing different ranges would produce different results. The purpose of the analysis is to establish the relative pattern of distributions. It doesn't provide absolute measures of shortfalls and excesses.

This analysis was undertaken for each of the three job-practice factors. The distribution of matches and mismatches by job and worker characteristics was generally similar. Therefore, the analysis presented in this section uses an overall indicator of skills match. This indicator assigns the minimum value for each person across the three results, where "skills shortfall" is treated as the lowest position and "skills excess" as the highest position. This indicator is weighted towards identifying who have a skills shortfall or partial shortfall on at least one job practice scale.

Using this overall indicator, it is estimated 9 percent of the workforce has a skills shortfall, 33 percent has a partial shortfall, 41 percent is matched, 12 percent has a partial excess and 2 percent has a skills excess. The distribution varies by occupation, industry and management level, as well as employee characteristics.

5.3 Job characteristics

Figure 19 shows the distribution of skills matches and mismatches across occupations. All occupations had at least 30 percent of workers with a skills shortfall or partial shortfall in one or more the job practice areas. People working as professionals or labourers were less likely to have a skills shortfall or partial shortfall than people in other occupations. Most occupations had 10 percent or more of workers with a skills shortfall. The lowest proportions were in professional and manager occupations.

Figure 19: Distribution of overall skills match and mismatch by occupationFigure 19: Distribution of overall skills match and mismatch by occupation.

Note:

  1. The error bars show the 95 percent confidence interval. The bars for the partial shortfall category are the error on the combined proportion of "skills shortfall" and "partial shortfall".

Figure 20 shows the distribution of skills matches and mismatches across industries. All industries had at least 35 percent of workers with a skills shortfall or partial shortfall. Construction had the largest proportion of workers with a skills shortfall or partial shortfall. Retail and wholesale trade had the largest proportion with a skills shortfall.

Figure 20: Distribution of overall skills match and mismatch by industryFigure 20: Distribution of overall skills match and mismatch by industry.

Note:

  1. The error bars show the 95 percent confidence interval. The bars for the partial shortfall category are the error on the combined proportion of "skills shortfall" and "partial shortfall".

Figure 21 shows the distribution of skills matches and mismatches by type of management responsibility. People who manage five or fewer staff or were self employed with staff were more likely to have a skills shortfall or partial shortfall. The proportions were lower for people without staff management responsibilities, whether employed or self employed. When the results were looked at for each job practice factor, they very closely matched the average job practices of people in each position, as shown in Figure 5 above. This suggests that people with management responsibilities have more frequent literacy and numeracy job practices but not necessarily higher document literacy skills.

Figure 21: Distribution of overall skills match and mismatch by management responsibilityFigure 21: Distribution of overall skills match and mismatch by management responsibility.

Note:

  1. The error bars show the 95 percent confidence interval. The bars for the partial shortfall category are the error on the combined proportion of "skills shortfall" and "partial shortfall".

5.4 Employee characteristics

There was very little difference in the distribution of skills matches and mismatches by age. However, differences by gender and first language are evident.

Overall, 42 percent of both men and women had a skills shortfall or partial shortfall, while 18 percent of women had a skills excess or partial excess compared with only 10 percent of men. Gender differences are more evident when looked at by qualification level, as shown in Figure 22. Men with no educational qualifications were more likely to have had a skills shortfall or partial shortfall than women with no qualifications. Men with school qualifications or tertiary certificates are more likely to have had a skills shortfall or partial shortfall than higher qualified men. For women, the proportion with a skills shortfall or partial shortfall was similar from no qualifications through to diploma level.

Figure 22: Distribution of overall skills match and mismatch by gender and highest qualificationFigure 22: Distribution of overall skills match and mismatch by gender and highest qualification.

Note:

  1. The error bars show the 95 percent confidence interval. The bars for the partial shortfall category are the error on the combined proportion of "skills shortfall" and "partial shortfall".

wenty-two percent of people with English as an additional language were estimated to have a skills shortfall in at least one job practice area compared with only 7 percent of those with English as a first language. Only 37 percent of people with English as an additional language were in the matched group, compared with 45 percent of those with English as a first language. This reflects document literacy being measured in English. However, most jobs in New Zealand require employees to be able to perform tasks in English.

The differences between first languages showed up more clearly when looking at the distributions by qualification level. Figure 23 shows the distribution of skill matches and mismatches by first language and qualification. For people with English as a first language, the highest proportion with skills shortfalls and partial shortfalls were those with qualifications below degree-level. For people with English as an additional language, there was a large proportion with skills shortfalls and partial shortfalls at all qualification levels, including those with degrees and postgraduate qualifications.

Figure 23: Distribution of overall skills match and mismatch by first language and highest qualificationFigure 23: Distribution of overall skills match and mismatch by first language and highest qualification.

Note:

  1. The error bars show the 95 percent confidence interval. The bars for the partial shortfall category are the error on the combined proportion of "skills shortfall" and "partial shortfall".