If anyone thought that the skills gap is a peculiarly British problem, that idea has just been comprehensively dashed by a new report which claims that more than a quarter of European employers are struggling to fill vacancies. In Education to Employment: Getting Europe’s Youth into Work, management consulting firm McKinsey & Company found that 27% of employers across eight major European economies say they have been unable to fill entry level positions because they cannot find people with the right skills. In addition, 33% of employers surveyed claimed the skills shortage was causing them “major business problems”. The irony of this is that this is happening not at a time of near full employment, but at the same time as unusually high youth unemployment across Europe.
The skills gap — the disjoint between the needs of employers and the supply of skilled workers — is now such a problem that we have found occasion to comment on news items addressing this subject no less than four times over the past three months (here, here, here, and here). But if we are starting to sound like a broken record on the subject, it is only because the problem is a real one which is not only growing bigger every year, but is now being acknowledged throughout society, including in the corridors of power. For instance, the McKinsey survey has attracted the attention of the European Commissioner for Education and Youth, Androulla Vassiliou, who concurred with the findings claiming that, “In Europe the mismatch between what our education systems are delivering and the needs of employers is resulting in a serious skills shortage and damaging the aspirations of Europe’s young people and, ultimately, our future prosperity”.
The reasons for mass youth unemployment and the skills gap are of course not just connected with education systems failing to train young people. There are far more fundamental reasons. As the Institute for Public Policy Research (IPPR) recognised on page 4 of their recent report into the problem of NEETs (Not in Education, Employment or Training), the problem of long-term youth unemployment is not just caused by a mismatch of skills and education but by more fundamental reasons of family and social breakdown.
Another reason is the explosion of university places. In Britain, this largely occurred in the last decade of the 20th century and was almost universally held to be a good thing. We are only just beginning to wake up to find that this has been far from a wise move, and has led to a generation where practical and vocational training are often looked down on, and where multitudes of people are — at least on paper — highly qualified, yet just don’t have the skills to do the work that actually exists. For an excellent commentary on this problem, I would highly recommend viewing Success in the New Economy, a short film produced by Citrus College in the US.
That being said, Androulla Vassiliou is right to point out the fundamental mismatch between what educational institutions are delivering and what employers need. This being the case, the question that must be asked is this: how do educational institutions find out what employers need so that they can provide the right training?
There are two main ways in which this can be done. One is to talk to employers and even to conduct local surveys. I was talking at the weekend to a friend who is an Operations Director in a small-medium size electronics firm. The company is looking to expand and so he is currently trying to recruit various positions, including Engineering Technician, Software Engineer, Hardware Engineer and CAD / Mechanical Designer. The problem is he simply can’t find people with these skills. In a situation such as this, colleges nearby need to be aware that employers in their area are having this type of problem, and be willing to think about how they can best respond.
This method, essential though it is, is obviously time-consuming and practically very difficult. It is simply not possible for colleges to contact every employer in their region to find out their ongoing needs. The other part of the solution would be access to solid, detailed data on industry, occupation and skills trends at a local and regional level. Step forward the world of Labour Market Information (LMI)!
LMI is the key to helping organisations understand the connection between economies, people and work. LMI is the key to informing educational institutions about the structure and dynamics of their local economy so that they can respond appropriately to its demands. LMI is the key to helping colleges evaluate and align their curriculum and apprenticeship programme to the skills needs of local industries and employers.
How does this work? Well if good, local LMI can tell you things like the number of engineers employed in various industries in your region — and it can –, the trends for various types of engineers in your area — and it can –, and the numbers of expected vacancies for various types of engineers throughout different industries within your local economy — and it can –, then this type of information is worth its weight in gold for any educational institution whose role it is to supply the local economy with engineers.
According to the McKinsey study, 74% of the education providers surveyed thought that young people were being equipped with skills for work, whilst only 35% of the employers agreed that this was the case. That there is a mismatch between what education providers think they are providing to employers and what employers think they are receiving from those education providers is shown pretty conclusively by these figures. Good, local LMI is not the only answer to this growing problem, but used in the right way, it has the potential to go a long way towards providing effective solutions.