Catch 22 in The Global Skills Gap

By: Björn Elowson, September 25th 2019

Imagine the following scenario: You are working with recruitment and you are about to hire. You do know that there are 200 million unemployed globally. In Sweden alone, you also know that about 30% of the ones already hired would consider shifting job if the right offer came up. In Sweden there are also approx. 400 000 unemployed and another 1 million people that are actively seeking for other jobs. But unfortunately, you couldn’t find anyone that fits.

Difficulties with recruiting despite a high supply of labor is one example of skills mismatch. Skills mismatch is manifested in different ways; as a recruiter you cannot find suitable candidates, as a candidate you might accept an offer where you are formally overqualified or has skills that doesn’t goes under the category “formal qualifications”- which means that you have skills but cannot formally describe them. When supply and demand exists but cannot meet – it will be defined as a matching problem.

In the EU-report Insights into skills shortages and skills mismatch data from 49 000 people from 28 EU-countries is used to try to answer the question: Why do we have a skills mismatch when there is both skills (supply) and jobs (demand)? According to the report, one of the main reasons is the difficulty in searching after candidates in a correct way. Formal qualifications like educational level decreases the pool of candidates to a minimum when we should focus on potential. There are several evidences of this when so called formally underqualified workers has been asked if they feel qualified enough for the job that they have. The majority of the asked workers says that they have learned their skills on the job.

This means that they probably are a good fit for the position, though if they had to apply for the same position again – they would have been excluded. The focus on formal qualifications also leads to over qualification where 29% say that they have had to accept a position that is beneath their educational level without the possibility of using their knowledge on the job.

 Average share of overqualified young employees in Europe

Self-correcting market?

The labor market in itself is not self-correcting where for instance educational level that is not fully utilized will pay of in the next job. Among the overqualified sample as many as 24-36% states that they have not been able to use the overqualification as a stepping stone to the next job. This means that many gets stuck without the possibility to move on to a more qualified position.

The large focus on formal qualification as educational level for instance may therefore create a catch 22 where the ones without the right level are excluded and the ones that gets selected feels overqualified. It becomes a vicious circle were high education is not high enough and the ones that actually gets selected becomes dissatisfied and earns less than what they could – if the matching had been correct.

 

Minimized candidate pool!

If you for instance would hire a sales representative within B2B the following could be part of an ordinary selection profile: Bachelor’s degree within business or similar and work experience minimum 1 year within related fields. Let´s say that this actually are set criteria’s and the candidates that fulfills this becomes part of the selection process. We have thereby made the following limitation to our candidate pool (before the rest of the selection process):  

 

  • Number of potential working people in Sweden (age 20-64): 5 875 000
  • Number of people with minimum bachelor’s degree: 1 356 000
  • Number of people with minimum bachelor’s degree within business: 119 000
  • Number of people with all of the above and minimum 1 year of working experience (your selection group): 83 000

In this example we have thereby minimized our theoretic candidate pool with 98,4%. If we were to add more criteria’s the number of candidates would of course be even less.

 

The war for talents..

Globally recruiters experience increasing difficulty with finding relevant candidates. In 2011, 17% of businesses in Sweden reported problems with finding candidates, in 2016 this number had increased to 35% and in 2018 it increased even further to a staggering 49%. The reason behind this could be the large focus on formal qualifications.  The EU-report says that if we were to focus on potential instead of accumulated work experience and educational level this so-called mismatch would be solved. The Global Skills gap is thereby a matching problem, a catch 22 were focus on formal qualifications leads to the minimized candidate pool which you are selecting from – which in turn keeps this downward spiral.  

JobAgents vision:

JobAgents vision is to develop and make potential accessible. We will start with creating a sharing service were passive and active candidates will be able to make their data searchable and describe their potential in an easy manor. We want to change the match making in the world of work be letting up-to-date AI do the job for you based on relevant and shareable data.

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