This feature analyses the findings of the The Hays Global Skills Index 2012, which studied the skilled labour markets of 27 global economies and revealed the strengths and weaknesses in each country’s workforce. The Index is the specialist recruitment sector’s first definitive data set on professional skills availability that analyses specific local causes for mismatches in demand and supply.
Countries were scored between 0 and 10.0 on seven factors, including talent mismatch, the local education system’s ability to adapt to the evolution of businesses’ requirements and labour market flexibility. These scores were averaged to provide a single, overall Index rating. A score of 5.0 indicates a balanced market for skilled labour while less than 5.0 implies a slack labour market – with few skilled jobs – and more than 5.0 a shortage of skilled employees – and subsequent pressure to increase wages. A sobering finding was that very few countries have stable scores across all factors.
Sharing the skills puzzle
The reason for some these problems in the demand and supply of skills in the labour market can be put down to a mismatch between the businesses’ current and future needs and those skills provided by education, according to Michael Dickmann, Professor of International HRM at the UK’s Cranfield School of Management. In essence, many educational institutions and business schools are failing to develop candidates with the skills and abilities that companies and sectors as a whole require. “This exists, probably, because education and businesses don’t coordinate in a way that would allow education to adapt,” Dickmann says.
Case Study – The US
The financial crisis hit the world’s most powerful country hard, with increasing long-term unemployment and subdued economic growth holding back job creation.
Despite an identical Index score of 6.4 to Germany, the US’ labour market pressures stem from different causes – talent mismatch and wage pressure in high-skill roles and occupations rather than the European nation’s well-matched talent but severe high-skill industry wage pressure.
There are signs of US wage pressures for high-skill jobs in many sectors, especially oil and gas, life sciences and IT. A combination of factors are the culprits, including an ageing population, immobile workforces, tight immigration and industries without the ‘glamour’ to attract graduates, according to John Faraguna, President, Hays North America.
“The university system is probably the best in the world, but the primary and secondary systems need improvement,” he says, pointing to government figures that show only 15 per cent of undergraduates take STEM degrees and one-third of teenagers drop out of high school.
Case Study – The UK
Following several years of sustained buffeting from the crisis in the eurozone, the UK economy is strained – scoring 7.9 for economic fragility in the Index.
The country also has among the highest levels of talent mismatch at 9.0, and its overall Index score of 5.0 is only brought down by the extremely low wage pressure across the UK jobs market , rated 1.3 in overall wage pressure in the Index.
Skills shortages exist in sectors as diverse as energy, IT, health, education and finance regulation and there is unhappiness over tightening of immigration rules for skilled workers to add to the UK talent pool.
“Employers need to take a strategic, long-term look at the skills they are lacking and commit to investment in developing talent in these areas, whether through training, apprenticeships, university bursaries or considering training people with transferable skills,” says Nigel Heap, Managing Director of Hays UK & Ireland.
Case Study – Japan
"In many ways it is an exciting time for Japan. We see some very promising signs after nearly two decades of little progress,” says Jonathan Sampson, Regional Director, Hays Japan.
Despite high levels of structural unemployment – endemic talent mismatch – there is an improving macroeconomic outlook in Japan, with growth expected to remain at two per cent for the next two years, above the recent historic average for the country.
However, Japan still has one of the highest levels of talent mismatch (8.1), due to an ageing population, a relatively closed immigration policy, limited diversity and the increasingly global requirements of Japanese companies.
“It is not that there are not enough available people to perform the roles needed, but they do not possess the skills required in an increasingly global environment,” Sampson says.
Insight – Crossrail
The UK's Crossrail project is the biggest engineering programme in Europe, involving 42km of new rail tunnels and employing 15,000 people at its peak between 2013 and 2015.
To Valerie Todd, the scheme’s Talent and Resources Director, it became clear in the planning stages that there was a shortage in the underground construction skills needed. “Identifying the issues at an early stage was half the challenge,” she says.
Historically, major tunnelling projects in Britain have taken place sporadically, sometimes with 30-year gaps between them, leading to a limited and ageing skilled workforce.
The organisation decided to set up a £12.5 million Tunnelling and Underground Construction Academy in London aimed at training a new generation of workers.
“We are ensuring a steady drip-feed of the skills and resources we are going to need as we deliver the project over time,” Todd says.
But the Academy is not only for the lifespan of the project. “With the unprecedented level of tunnelling and underground construction due to take place in Europe over the next decade, it was clear that other partners and industry bodies had the same issue on their horizon,” Todd says.
“Through working with industry partners and other major projects, we were able.