Unemployable v Unemployed

Posted on: 09.04.2013    11:23:42

To the man in the street, let alone the millions of unemployed around the world it seems incongruous that with 100 million youth unemployed in each of Europe, the Middle East and India and an unknown number in China that there are still skills shortages around the globe.

What are the main causes?

Labour market inflexibility with politically generated barriers to entry in the believe that this will protect the home market whereas in reality it creates damage because if businesses cannot find the talent they need to work in their home market they will look elsewhere for a combination of that talent and possibly lower costs.

Inadequate, or inappropriate education, producing people with no, low or unwanted skills. This is a tragedy and here political and business leaders need to put up their hands and takes responsibility. Belated steps are now occurring but it will take a generation to put the problems right and we very much need to be thinking back from the future and not forward from the past in planning the skills requirements for the future. The world is changing and the pace of change will continue and if we continue to churn out the unemployable we only add fuel to the fire and inflame social unrest.

Training. Business bosses complain they have to carry out basic educational training as the school standards are so poor. This might be the tip of the iceberg because business should be the hand in the educational glove directing strategy with the overview of the politicians with responsible implementation left to the educators who have measurable deliverables where not everybody gets a prize and there is a price to failure. This does not absolve business from offering more support by early on the job training with work experience, apprenticeships etc. However, training doesn’t ever cease in life and the individual needs to grasp responsibility.

Everybody wants experience and most businesses shy away from giving opportunities and therefore miss the cream. In international recruitment as a generalisation employers are looking for 3-15 years’ experience depending on the role. To get it they will pay up and this is inflationary all around due to the spiral effect discussed below.

Global competition for talent tends to be directed at the cream of the weaker economies as the international markets only want the best. Economically Europe is going through a huge realignment and we are seeing the best talent from Greece, Italy, Spain and Portugal and increasingly France registering to work overseas. Now this talent has been educated, nurtured and experience gained in the domestic market but now the very best are leaving taking with them not just their skills but assets and future earning power. They will need to be replaced which creates openings in the home market but usually at an inflated price. It may lead to targeted immigration to overcome skills shortages.

The last point is not universal. The welfare state, where it exists, can lead to a lack of personal responsibility to help yourself falling back on the state for assistance. The original countries of the European Union within Europe, parts of the Middle East and Australia would be good examples. The benefits of being in work are not sufficiently great to encourage many people onto their bikes to improve their personal circumstances. This is one for the politicians and of course us as voters.

So what are we seeing today? It is basically a skills mismatch in terms of talent that might be driven by abilities or location forcing employers to turn to the international markets to seek the skills they need.

The world disease is employability owing to low skills, poor education, market inflexibility and a lack of targeted training. Unemployment is the symptom and the means of keeping score.

The outlook is likely to get worse in the digital age and as longevity increases so we will continue to see both high unemployment and skills shortages occurring simultaneously.

 

Author: Chris Slay

 

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