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Skill mismatch The European experience Konstantinos POULIAKAS Department for Skills and Labour Market CEDEFOP International Labour Office (ILO) Geneva, 11-12 May 2017

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  • Skill mismatch

    The European experience

    Konstantinos POULIAKAS

    Department for Skills and Labour Market

    CEDEFOP

    International Labour Office (ILO) Geneva, 11-12 May 2017

  • 2

    Five priority areas (2008)

    Improve measurement of skills/skill mismatch

    Examine skill mismatch persistence and impacts

    Improve understanding of processes and dynamics

    Focus on skill mismatch of vulnerable groups

    Improve data availability and use

    Cedefop skill mismatch agenda

    2009-2017

    Multiple reports and briefings

    Inputs to European Commission/WEF

    New EU-level data collection

    (European skills and jobs survey)

    Online database of skill mismatch policies

  • 3

    Despite being the generation with the highest education attainment ever, today's young have paid the highest price for the crisis…However, high levels of unemployment co-exist with 2 million unfilled vacancies, an indicator that some people lack the right skills or mobility. (Commissioner M. Thyssen, ‘Avoiding a lost generation’ , 19 Jan 2015)

  • Skills shortages in EU

    • About 4 in 10 employers in EU have difficulty filling vacancies with right skills (3rd European company survey)

    - Pronounced in Baltic states, AT, BE, HU, BG, MT, DE - Low in south-east Europe ES, EL, HR, CY

    • Structural shifts in EU Beveridge curves (ECB, 2012)

    • High- or medium-skilled bottleneck jobs e.g. ICT, health, green jobs, skilled trades

    • Low skills/skill gaps of those out of work (OECD, 2013; Cedefop, 2015)

    • Evidence of 70 million low-skilled EU individuals (OECD, 2013)

  • ‘Genuine’ skill shortage (12%)

    Lack of applicants with right skills and capabilities

    Uncompetitive wages (29%)

    Inability to offer a competitive salary

    ‘Apparent’ skill shortage (46%)

    - Lack of right skills & and inability to offer competitive wage (24%) & HRM inefficiency (22%)

    HRM inefficiency (13%)

    No competitive graduate training program/slow hiring process/limited resources to market vacancies

    Few ‘genuine’ skill shortage vacancies

    Source: Cedefop (2015) Skill shortages and skill gaps in European enterprises

  • Skill shortages: more than meets the eye

    Skill supply

    Business cycle

    Employer talent management practices

    Labour market Institutions

    Country-level Enterprise-level

    Source: Cedefop (2015) Skill shortages and skill gaps in European enterprises

    -0.2 -0.15 -0.1 -0.05 0 0.05 0.1

    % staff worked overtime

    Private sector

    Health & social work

    Training

    Casual workforce

    Changing workplace

    Atypical hours

    Wholesale/retail

    % female workforce

    Finance & business

    Probability of high-skill bottleneck, 2013, EU28

  • 7

    Skill mismatch, lifelong

    Overqualified

    Underskilled

    Skills obsolescence

    Overskilled but skill deficit?

    Skill gaps

  • 05

    %1

    5%

    20%

    10%

    24-29 30-39 40-54 55-65

    % underqualified % overqualified

    % with skill gaps

    Some ongoing convergence among

    EU countries/generations (Chlon-Dominczak et al., 2016; McGuinness et al., 2017)

    Country differences: unemployment,

    VET, female participation, EPL?,

    product market/housing regulations

    29% qualification mismatch

    ~16-17% overqualified; 29% tertiary

    ~ 45% skill mismatch

    Young: qualifications, low skills

    Older: skilled, low qualifications

    Source: Cedefop European skills and jobs survey (ESJS)

  • Skill mismatch: churn between & within jobs

    28% 27% 39%

    52% 50%

    54%

    10% 22% 5%

    0%

    20%

    40%

    60%

    80%

    100%

    Previous job Start of job Current postNA

    Skills lower than needed by job and need to develop further

    Skills matched to what job needs

    Skills higher than needed to do job

    40% of matched

    Source: Cedefop European skills and jobs survey (ESJS)

    http://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-survey

    http://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-survey

  • Who are the mismatched workers?

    Source: Cedefop European skills and jobs survey (ESJS); graphs show estimated odds ratios, adult workers, EU28

    http://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-survey

    0.00 1.00 2.00 3.00

    High educated

    Male

    Elementary jobs

    Plant and machine operators

    Accommodation and food

    Part-time

    No routine tasks

    Frequent learning tasks

    Motive: career prospects

    Motive: job security

    Financial constraints

    Few job opportunities

    Mismatch: Basic literacy

    Mismatch: Learning to learn

    Mismatch: Problem-solving

    Overskilled

    0.00 1.00 2.00 3.00

    Age: 55-65

    Tenure: > 5 years

    Low educated

    Before inactive

    Before unemployed

    Managers/professionals

    Scientific activities

    Manufacturing

    Fixed-term contract

    Learning tasks

    Financial constraints

    Motive: gain work experience

    Mismatch: Planning skills

    Mismatch: ICT skills

    Mismatch: Technical skills

    Underskilled

    http://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-surveyhttp://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-and-jobs-esj-survey

  • 11

    Human capital (14%)

    Information asymmetry (11%)

    Assignment to low-skill jobs (7%)

    Compensating attributes (5%)

    Mobility and career concerns (2%)

    Other search constraints Country differences

    (5%)

    Unexplained (Part of wage gap due

    to differential returns to characteristics of

    overqualified or other residual factors)

    (56%)

    Decomposition of raw wage gap between overqualified and matched tertiary graduates, 2014, EU28

    Overqualified wage penalty: low work skills, information gaps, bad job quality

    Source: McGuinness & Pouliakas (2016) based on Cedefop European skills and jobs survey (ESJS)

  • 69% interacting

    with colleagues at

    work

    63% attended

    training courses

    59% trial and error

    51% self-training

    40% supervisor

    taught on the job

    Sustained skills matching is intertwined

    with high informal learning in good jobs

    22% of EU adult workers have not

    developed their skills further in their jobs Drivers of skill growth

    Source: Cedefop ESJS

    77.5

    88.5

    9

    Ski

    ll fo

    rmatio

    n in

    job

    0 10 20 30

    Years with current employer

    Non-complex job Complex job

    Fitted values non-complex Fitted values complex

  • Elements of EU skills matching policies

    o Include skills matching in ALMPs

    o Workplace learning as part of adult training

    o Well-defined link between skill needs anticipation and (regional) policies

    o Tailored training to learner skill needs (vouchers)

    o Include relevant stakeholders in curricula design

    o ICT competence-based matching

    o Web-based feedback of ALMPs

    o Strong link of ALMPs and education tools (validation)

    o One stop shop guidance centres

    o Networking teachers-business

    o Skills as asset for FDI

    Source: Cedefop (2015) Tackling unemployment while addressing skill mismatch; skills matching policies database

  • EU skills matching policies

    Road ahead Improve skills matching activation services

    Improve skills intelligence and information for better guidance and career choices

    Improve skills governance – partnerships between multiple stakeholders (education, industry, social partners)

    Incentive local development or industrial policies in close alignment with skills policies

    Combine skills, activation, employment and mobility policies with product market, housing & other social policies

  • 15

    For more information [email protected]

    www.cedefop.europa.eu

    mailto:[email protected]://www.cedefop.europa.eu/

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