At the European Centre for Government Transformation’s Roundtable on Employment and Skills, held in Brussels on 28 April 2015, labour market leaders shared ideas and debated solutions for the skills challenges facing Europe in today’s digital economy.
The discussions, supplemented by research, illustrated that there has been a sharp increase in demand for high-skills roles and a clear narrowing of labour opportunities in middle-skills sectors. If they are left unaddressed, these trends are likely to continue.
The executive briefing shares specific ideas for how Europe can address challenges that include skills mismatches, lack of talent, fragmentation of actors and the economic vulnerability of specific groups.
The skills crisis in Europe persists, with 9.8 percent of people still unemployed and the number of people who have given up looking for work increasing to 9.4 million in 2014. Exacerbating the crisis is the decline in middle-skills, which will be further accelerated by the wave of technological change and the disruption that this brings across several industries in Europe.
Accenture research and analysis demonstrates that Europe’s currently downward trending productivity growth needs to reverse, and increase by 0.5 percent annually in order to maintain current standards of living by 2030. Productivity growth will continue to decline while there are skills gaps and mismatches, and where the bulk of jobs are in low productivity middle-skills sectors.
Key issues raised at the 2015 “Employment and Skills” Roundtable include:
Mismatch between employer needs and jobseeker skills and competencies. A fifth of the working-age population has low literacy and numeracy skills. A quarter of adults lack the digital skills needed to effectively use information and communication technologies. The mismatch between what education systems are delivering and the needs of employers is resulting in an acute skills shortage. Firms are facing a skills shortage and report having difficulties filling jobs due to the lack of a standardised understanding on the quality of skills.
Lack of talent development and a talent pipeline to meet growth needs. The digitalisation of the labour market will continue to change the skill sets demanded by employers. The lack of ICT skills, as well as soft skills for middle management, is projected to constrain EU growth and competitiveness if major changes are not implemented.
Fragmentation of actors, and misplaced expectations. Accenture research highlights that more than 36 percent of firms across our five selected countries have ‘no contact at all’ with skills and education providers. Europe has a disconnected labour market ecosystem, with each actor pursuing their own individual goals and having a narrow view of their roles in delivering on employment outcomes.
Damaging effects of a digital economy on vulnerable groups. The results of the Survey of Adult Skills (PIAAC) revealed that proficiency in literacy, numeracy and problem solving in technology-rich environments has had a lower prevalence amongst individuals with particular socio-economic characteristics, such as immigrant and/or foreign language background, age or gender.
Europe is moving into a digital labour market. The financial crisis has, to some extent, driven fundamental shifts in the labour market, but as European member states attempt to return to growth and competitiveness, they will see that the only option for doing so lies in addressing the skills challenge.
Europe must tackle the challenges of skills mismatches, lack of talent, fragmentation of actors and the economic vulnerability of specific groups in order to redress imbalances in the labour market.
Policymakers and public employment services need to acknowledge their roles as labour market brokers – providing accurate data and facilitating communication to enable businesses and educators to make informed decisions and direct skills development as required.
Employers should now see themselves as end-customers in a digital labour market, taking an active role to help develop workforce skills and a talent pipeline.
Educators are no longer simply teachers, but need to play the role of career mentors – tasked with setting out a personalised learning plan for students.
If these labour market actors are able to take on their new roles, Europe could move toward much higher levels of growth and productivity.
In this video, listen to senior government officials attending the High-Level Roundtable on Employment and Skills give their views on key challenges they are facing to tackle the challenges of skills mismatches.
The role of the employer community in addressing labour market challenges
The skills mismatch in the digital economy