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Is The Skills Gap Really A Skills Mismatch?

POSTED 05/16/2014
By Nicole Dessain

For my talent management consultancy’s talent.trends 2014 report, I naturally looked at several indicators that bear on recent discussions of the skills gap. For a variety of reasons, though, the skills gap remains a riddle.

For example, consider that unemployment, especially among the young and the long-term unemployed, remains high. According to the International Labour Organization, more than 74 million youths were unemployed in 2013 — almost 1 million more than in the year before. The World Economic Forum views this as a major risk facing the global economy in 2014 and beyond.

At the same time, many companies state they are unable to fill available roles. A recent study found that 27% of employers in Europe left a vacancy open because they could not find anyone with the right skills.

Therefore, “gap” may  not be a complex enough summary of the issue facing the employment marketplace. Unlike previous talent shortages, the challenge we face today is a skills mismatch.

Two major factors contribute to the complexity of this challenge: a geographic skills imbalance and an education-to-employment skills mismatch.

Geographic skills imbalance

An Ernst and Young study last year argued that hard skills tend to be concentrated in emerging markets, whereas soft skills are more available in developed countries. This gap is likely to widen as western students are outperformed by other countries in math and science. According to the most recent PISA study (an international assessment that measures 15-year-old students’ reading, mathematics and science literacy) Asian and some Northern European countries rank highest in mathematics with Hong Kong taking the lead.

India is keenly aware of the geographical skills imbalance and has been positioning itself as an exporter of IT talent for years. For example, Narendra Modi, Indian prime minister candidate, is determined to continue on this path, saying in his campaign speeches that, “IT+IT=IT, or Indian talent + information technology is equal to India tomorrow. The IT sector can be the shining light of Brand India.”

Consider another example of geographic imbalance: Within Europe alone the mismatch between needed skills in one geography and high unemployment in another is startling. While German companies struggle to find engineering talent and Switzerland struggles to find healthcare skills, youth unemployment in Spain and Greece remains at a record high.

Education-to-employment skills mismatch

The other factor in this trend is that educational institutions are not graduating enough students with entry level skills. A recent study revealed that 57 % of global organizations polled were not confident that educational institutions will generate the talent needed by their businesses.

The growing technology sector and the ever-evolving needs for digital skills create demand especially in computer science. It is estimated that by 2020 there will be one million more computer science jobs in the US than computer science students.

The rate of women pursuing degrees in computer science and engineering in the US has been stagnant over the past years, further narrowing the pool of available STEM (Science/Technology/Engineering/Math) talent. Computer science actually is more male-dominated today than it was two decades ago: Women received 29.6% of computer science B.A.’s in 1991, compared with 18.2% in 2010.

Girl Class Working

By 2020, there may be 1 million more computer science jobs in the US than computer science students. photo credit: Jisc

Why the skills mismatch trend is critical in 2014

The most sought after skills on LinkedIn in 2013 were technology related competencies with the top three being social media marketing, mobile development and cloud computing. The fastest growing occupations in the US between 2013 and 2017 are expected to be in technology, healthcare, market/management analysis and the oil and gas sector.

2014 will shed a new light on the technical skills shortage as critical policies such as immigration reform in the US are debated. The reform is strongly supported by a vocal community of high tech employers led by Facebook’s CEO Mark Zuckerberg’s political action committee.

 This gap is likely to widen as western students are outperformed by other countries in math and science.

2014 will further highlight the disruptive impact of technology on academia and its potential to enable just-in-time education. For example, the recent emergence of the MOOC (Massive Open Online Courses) movement is igniting a spirited conversation about the future of higher education.

While the global economy is still struggling to meet current skill needs, new advancements in technology have created innovations with some of them coming to mass market as early as 2014 (e.g. “the internet of things”, 3-D printers, “wearables”, Watson, and driverless cars). This will further drive demand in technical skills and create new competency needs.

All of these disruptive technologies have the potential to exacerbate the skills mismatch, driving up demand for new skills without necessarily easing the geographic or education-to-employment factors.

While significant policy changes are needed to address the global skills mismatch, companies can also play a part in solving this riddle. How will you contribute to solving the global skills mismatch?

Jagged Edge Media JAcom Consultants