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May 16, 2016 Is the 'Skills Gap' really a 'Skills Mismatch'? Tom Knight, Account Director

Is the 'Skills Gap' really a 'Skills Mismatch'?

The current state of UK employment brings both good news and bad for job board owners. Let’s start with the good.

Employment rates are at an all-time high. According to figures published by the Office for National Statistics (ONS) they rose to 73.3% last year, which is the highest since records began in 1971.

What’s more, the number of job vacancies also came close to the highest on record, with more than 750,000 new positions up for grabs.

The bad news is, despite these solid employment figures, the UK is in the midst of a skills shortage. So why are British businesses struggling to find the right candidates?

Chris Lawton, Senior Research Fellow at the College of Business Law & Social Sciences at Nottingham Business School, believes the problem isn’t just a shortage of skills, but also a skills mismatch. Many highly qualified job seekers are taking employment where their skills are inadequately used.

According to the ONS, 25-34 year olds consistently have the highest level of over-education compared to the UK average.

“A high proportion of graduates are in employment, but due to a skills mismatch over 10% of them are working in non-graduate jobs,” explains Lawton. “This ranges from unskilled work, such as bar work, to semi-skilled employment where they are competing against those on apprenticeships.

“It means they are not getting the job they should have with their levels of skill and training.”

If skills are being wasted, but stats show there is a skills shortage, where are we going wrong? Lawton describes the phenomena as a ‘signalling problem’. Employers don’t fully understand the skills required for a job – or are unable to convey them in the application ­– while job seekers struggle to identify their own relevant skills.

“We need to work out how to improve communication between these two halves of the labour market,” Lawton states.

An interesting study held in Spain published in the Economics of Education Review in 2012 proves this point. Researchers asked employers and graduates to prioritise 19 key competencies needed to get a job – and found they varied drastically.

Employers rated ‘problem solving’ as the fourth most important skill required of their recruits, while graduates rated it 17th. Similarly, ‘the ability to apply knowledge to practical situations’ was ranked eighth by employers, but 18th by graduates. 

Graduates scored the ‘ability to work independently’ and ‘interpersonal abilities’ as having higher importance, while employers said these were generic skills.

It seems what employers want – and expect – from a skilled job seeker doesn’t match up to the competencies job seekers deem important.

“Skilled people aren’t identifying and matching the skills they have to employer needs, and employers are not identifying and advertising what they want from applicants clearly enough,” states Lawson.

Having a shortage of qualified candidates – or those who don’t recognise their relevant expertise ­– is bad news for job boards. Employers and recruiters who fail to find suitable applicants will inevitably get less return on investment (ROI) from their job postings. Lower ROI ultimately means they will be less inclined to advertise on a particular job board again, and may look for alternative ways to recruit.

A skills shortage, or mismatch, will also mean job boards lose engagement with job seekers, if they are unable to find postings that match their skill sets.

What is the solution? Job boards and recruiters can help by educating employers, helping them to identify the skills they need for a job and matching them to the right candidate. This often means keeping an open mind and not automatically dismissing an application because they don’t tick every box.

“Employers need a deeper understanding of the skills they require,” explains Lawson. “We have come out of a long recession and during that time it was all about knuckling down and surviving, so companies invested a lot less in HR. Employers have under-resourced the deployment of matching the right person to the right job, but this has to change.”

Training is also key to getting job seekers recruitment-ready. While candidates may already have a range of competencies, if they don’t suit employer requirements the bottom line is they need to upskill.  

Job boards are the ideal place to provide candidates with the opportunity to develop and progress in their profession. Even if they haven’t considered further training, if they spot a relevant course while searching for that perfect job, it may be the push they need to take their career to the next level.

Retraining the work force, better communication and a greater understanding of the skills required could all play their part in ensuring the right people are matched to the right jobs. This, in turn, will help reduce the current skills gap and safe guard the future success of your job board.

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