A global skills chasm has emerged as the skills gap worsens for a fifth consecutive year. Businesses across the world continue to struggle to find and attract the right talent, with the lack of skills threatening business growth and jeopardising productivity. According to a new report from Hays plc, the global professional recruiting group, the skills gap has worsened by 14 per cent across Europe, putting increased strain on businesses. Wage pressures are increasing for skilled professionals as employers are forced to increase salaries in the hope of finding and retaining suitable employees.
These are the key findings of the fifth Hays Global Skills Index 2016, a report published today by Hays in collaboration with Oxford Economics. The report, ‘The Global Skills Landscape - a complex puzzle’ is based on an analysis of the professional employment markets across 33 global economies.
Despite the impending consequences of Brexit in the UK, the uncertainty around the US election and the slowdown in emerging markets, the global economy is steadily recovering and there has been an increased demand for skilled labour across the globe. However, this has led to increased difficulty in employers identifying the skilled talent available. The continued challenge to find skills in key areas is not unique to one country and, as a result, businesses are struggling to manage their talent pipelines.
The report also revealed the following: • As the skills gap widens in Europe, pressure is also being placed on employment in Asia, China and India as they experience slower economic growth. On the other side of the world in the US the story is one of high talent mismatch and Central and South America are seeing increased unemployment and job vacancies, with Brazil’s unemployment rate expected to end the year at 12 percent.
• Some Governments are having a positive impact through implementing polices that are supportive to labour markets. For example, the Japanese government has introduced new ‘womenomics’ policies aimed at boosting the number of female workers and skilled migrants from overseas, and structural reforms in Belgium are helping to improve the overall job market.
Change may be on the horizon for the global skills shortage as the rise of automation and robots is set to have a huge impact on the labour market. With the rapid rise in robotics and automation, machines are now capable of conducting non-routine tasks such as driving, legal writing and diagnostics, and this ‘rise of the robots’ could help ease the global skills shortage by freeing up humans to do more skilled work.
One million industrial robots currently in operation have been directly responsible for the creation of close to three million jobs, and a growth in robot use over the next five years will result in the creation of one million more high quality jobs globally.* With proof that this is a viable solution, governments, business leaders and educational institutes need to tackle the issue and ensure that they are investing in this technology in order to boost productivity, upskill workers and address the skills chasm.
Commenting on the findings of the report, Alistair Cox, Chief Executive, Hays plc said:
“As we see the global economy in a slow recovery, the global labour market faces enormous pressure as the skills gap is fast becoming a skills chasm. Businesses are challenged with both the difficulty of finding the right talent and also keeping hold of it. There are no signs that these challenges are abating in any way.
“As evidenced in this year’s report, governments also have a large part to play in ensuring that labour markets run to their full potential. We have seen examples of positive change happening across a number of labour markets, proving that by identifying these issues and taking decisive action, the skills gap can be closed.
“If businesses do not have access to the skills that they need, they cannot run to their full potential. We cannot let this be the case if we want to ensure global economic prospects remain on track.”
Notes on methodology
The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market, such as education levels, labour market flexibility and wage pressures.
An overall score of above 5.0 indicates that the labour market is ‘tighter’ than normal. A score below 5.0 indicates the market is ‘looser’ than normal. Within these overall scores, however, the scores attributed to each of the seven indicators can vary significantly, highlighting the different dynamics and pressures faced by each country.