The Global Skills Shortage

There were a couple of good, somewhat interrelated articles on Bloomberg this morning. First up, the global talent shortage (extract, emphasis added):

The Surprising Global Shortage of Skilled Workers

…Even as economists and politicians fret about the problem of global unemployment, those with the right résumés are in hot demand. That’s leading to talent shortages around the world, according to a survey released on May 29 by Milwaukee-based Manpower Group (MAN), one of the world’s largest temporary workers agencies.

All told, over one-third of the 38,000 companies Manpower surveyed earlier this year in 41 countries and territories reported that they were unable to find the workers they needed. That is 4 percentage points higher than it was in 2009, during the global financial crisis. The figure is still well below the 41 percent that reported shortages in 2007, before the crisis…

…Not surprisingly, the largest number of employers reported shortages in Asia, where economies have been relatively resilient to date. Some 45 percent of employers surveyed there cited difficulties in finding the right people to hire…

…The reason companies said they face shortages? The largest share, or 33 percent, said they simply couldn’t find the workers they need. A key issue was a lack of such hard skills as IT knowledge or facility with a foreign language. Insufficient work experience, a dearth of soft skills, or what the survey called “employability”—meaning characteristics like motivation and interpersonal skills, wanting more money, and being unwilling to work part-time—were also factors, in descending order of importance.

Companies will continue to face challenges regarding talent shortages unless educational systems are changed, argues Joerres, who says a major problem is the skills mismatch—the gap between job-seekers’ abilities and what employers need. One way to fix this is to vastly expand the size and number of trade schools, he says.

Two conclusions I think we can take from this. First, Malaysia is not alone in having a skills gap between what employers want and what the education system is providing. Second, vocational education is set to become an increasingly important part of the educational landscape.

Personally, I think this provides some anecdotal evidence that this is less a matter of education not being up to scruff, but as much about the workplace evolving and the education system (not just here but worldwide) not adapting rapidly enough.

Just think of all the changes in the workplace over the last twenty years. When I first started working nearly twenty years ago, clerk/typists were still a common feature in the private sector and PCs weren’t all that common. Now any prospective employee is expected to be able to type, edit and spell on their own PCs, making a whole class of workers obsolete.

My auto mechanic says when he began working in the 1990s, fixing cars was all hands-on work…now you almost need a computer science degree because for nearly every new car on the road, the engine is managed by an on-board computer.

When the Malaysian economy was dominated by manufacturing and agriculture, it was enough to read, write and count. Manual and factory work doesn’t really require much more. Rote learning is ideal for that kind of environment – structured work doing repetitive tasks.

But with services becoming increasingly important –76.3% of growth last year came from services – language and social interaction skills are more required than ever. The workplace is more connected, more socially interactive, more intellectually challenging, and competition much fiercer. Has the education system kept up? There have been changes, but the rate of adaption is I think probably too slow. Heck, companies themselves are having trouble keeping up with the complexities of business today.

Hence we get this dichotomy of better exam results but reduced employability. I’ve no doubt there is a quality issue as well, especially given the rapid expansion of the education system to cater for ever larger age cohorts. But framing educational reform as an attempt to do the same thing but better, is I think doomed to failure. Education has to adapt to changing employment needs, which means we have to do things differently, not just better.

One thing that just struck me last week – industry/academia engagement to resolve this problem has largely revolved around involving private sector employers in helping set university syllabuses (among other things). But what if we extend that earlier into the school system, such as at secondary level? Food for thought.