Unemployment in many European Union (EU) countries is alarmingly high. Yet, surveys still find that firms report problems filling vacancies. Manpower’s 2013 survey found on average more than 25 per cent of firms across 17 Member States reporting recruitment difficulties. Many argue this is because young graduates and other workers are ill-prepared and Europe’s high unemployment is caused by the lack of the right skills. However, there is evidence that factors other than skill deficits are mostly responsible for rising unemployment coexisting with job vacancies that are difficult to fill.
Skill mismatch is not just about skill shortages, namely employers having difficulties filling vacancies with the right talent despite offering competitive wages. Skill mismatch is also where individuals take jobs in which their educational qualifications and skills are inadequately used.
Data indicates that current skill mismatches are not due to a lack of skills. Weak employment demand is increasing competition for jobs and more people are willing to take jobs below their qualification level. In the EU, around 29 per cent of highly-qualified workers are in jobs usually requiring medium- to low-level qualifications. The recent Survey of Adult Skills (PIAAC) in 24 OECD countries also confirms that more of the adult workforce is over-skilled rather than under-skilled.
Those arguing that the EU workforce’s skills do not meet labour market needs point out that signs of economic recovery and more job vacancies have not seen a corresponding fall in unemployment. However, there has been no collapse in skill levels since 2008 to justify skill deficits causing rising unemployment. In most EU countries, current labour shortages and recruitment in all sectors are much lower than in 2008.
While some high-performing firms may face temporary recruitment difficulties for some innovative jobs such as ICT developers, evidence points to factors other than skills such as poor wages and working conditions, reliance on temporary staff and lack of mobility being mostly responsible for difficulty in filling job vacancies. With an oversupply of highly-qualified job candidates, firms prefer to wait for the perfect applicant. PIAAC data confirms that when hiring, employers usually ask for educational requirements greater than those needed to perform the job tasks.
The 2013 Manpower study found only seven per cent of employers willing to redefine recruitment criteria. Firms tend to overlook possible candidates from other areas as well as young people, women and older workers, many of whom are skilled. Around 40 per cent of unemployed people were previously working in high-skilled or skilled non-manual jobs. Only 10 per cent of firms, according to a recent Eurobarometer survey, agree that their newly recruited university graduates lack the necessary skills, although in some countries such as the Czech Republic, Estonia, Lithuania and Slovenia skill deficiencies tend to be more
The 2013 Manpower study found some 24 per cent of employers complaining about the lack of experience and work attitudes of young applicants. However, firms fail to engage in on-the-job or dual training programmes that would improve young people’s job-readiness or enable employees to acquire work-related skills. Eurostat data shows that only about 33 per cent of employees in the EU received training provided or paid for by their employers in 2010 and most of them were already highly-skilled individuals. A significant share of employees with high skills also work in jobs that under-use their skills.
In its 2014 meeting the World Economic Forum published a paper on skill mismatch to which Cedefop contributed ( ). It argues that job creation is fundamental but all aspects of skill mismatch must be addressed to avoid structural unemployment. To understand skill mismatch better, in March 2014 Cedefop launched the first pan-European Skills survey. Some 50,000 adult employees across all 28 Member States will be surveyed to quantify the incidence of educational and skill mismatch and to see why and how it develops during individuals’ careers.
Despite a lack of evidence to support complains about large skill deficits in, efforts to bring education and training and the labour market closer together should be pursued to enable individuals to acquire the work experience and soft skills employers want. Employed and unemployed adults also need to develop their skills throughout working life. But firms must invest in learning for their workforce. To mitigate difficulties in hiring, firms also need to review recruitment practices, extend training strategies and broaden recruitment pools. If not we may only prolong the jobs crisis.