1 May 2015

Who can solve the skill mismatch riddle?

It comes as no surprise that skills are a key driver of labour market success, competitiveness and social inclusion.
They also need, however, to keep up with rapid technological developments and changes in the workplace and the labour market. When a gap appears between the skills required on the job and those possessed by individuals, the resulting mismatch can easily grow from a source of frustration to a fuel for unemployment. There is growing concern among policy makers, employers and businesses in Europe regarding the divide between what types and sets of skills current education systems provide, what skills labour markets need, and the extent to which the mismatch between demand and supply contributes to keeping unemployment rates high.
Unemployment remains dangerously high in Europe, hovering at approximately 10% since 2012-2013. Yet, there are several million vacancies which at the same time are challenging employers to fill them. With 4 out of 10 employers in Europe signalling they cannot find the appropriately skilled workers, skill deficits take centre stage. This is particularly striking in the EU’s ICT sector, where, despite the current levels of unemployment, the number of digital jobs is growing by more than 100,000 per year and is likely to reach about 1 million by 2020.
What can be done, however, to solve the conundrum, especially when, counterintuitively, overqualification is one of the most important factors for skill mismatch? Others include a lack of job mobility, poor wages, inefficient recruitment and training strategies, and a skills shortage. Elements of a solution comprise of adapted education and training, but also better human resource practices and improved remuneration. More harmonised job and educational standards and requirements (for example ICT certification) will also contribute to improving the current situation.
When unemployment, skills mismatch or deficiency, education and social policy will be addressed in a comprehensive manner, the huge issues that the EU is facing in this respect will become more manageable. Currently, it is the EU Member States that deal with these matters predominantly. Broad imbalances within the EU with respect to unemployment rates, labour shortages and skills mismatch make a one-size-fits-all solution less than ideal. Existing divergences also mean that the advantages of the internal market cannot be fully reaped.
The EU has already made the task of tackling unemployment one of its top political priorities and the ongoing debate is increasingly examining the aspects of skill mismatch that hamper jobs creation. The European Commission’s Europe 2020 flagship initiative ‘An agenda for new skills and jobs’, launched in 2010, aims to ensure that 75% of the working-age population (20-64 years) is in work by 2020. The Junker Commission has also declared jobs & growth its main priority and is planning to propose measures to get people, especially the young and the longer term unemployed, into work and develop a skilled workforce.
This topic will be debated at the European Business Summit on 7th of May in the Skills & Employment 4.0 session.

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