Global Skills Mismatch – Affects 1.3 billion people worldwide is imposing a 6% annual tax on the global economy

A skills mismatch that affects 1.3 billion people worldwide is imposing a 6% annual tax on the global economy in the form of lost labor productivity. Boston Consulting Group (BCG) explores this and other findings in its report titled Fixing the Global Skills Mismatch, which is being released today.

According to the report, the skills mismatch is the key barrier to human capital development. Affecting two out of five employees in Organisation for Economic Co-operation and Development countries, the skills mismatch is, for employers, essentially a hidden tax. And because uneven economic growth and global divisions of labor can lead to greater disparities among the world’s economies, the mismatch creates risks for governments.

The report points to the need for a more human-centric approach to education and employment that will treat an individual not just as an element of the workforce or a passive consumer of education and training services but as an equal partner in the creation of a future-ready society and economy.

“The system for building human capital needs to be updated,” says Dr. Leila Hoteit, a BCG senior partner and coauthor of the report. “Not only does the future economy demand a human-centric approach, education systems need to adapt to new and more sophisticated market requirements.”

Transforming Education and Labor Markets

Skills are becoming obsolete at an increasingly fast rate—technical skills, for example, are outdated in two to five years, and it is expected that by 2022, 27% of available jobs will be in roles that do not yet exist—heightening the need for reskilling and upskilling.

At a time of high uncertainty, people need the cognitive and noncognitive skills and knowledge necessary for adapting to employers’ changing requirements. At the same time, people must take responsibility for their own professional development to be able to choose a career path and to fully unlock their potential.

The report highlights that to address the skills mismatch, the 20th-century social contract—with its standardized forms of education, nontransparent labor markets, and job-for-life expectations—needs to be transformed into a fundamentally new pact that involves employees, employers, the government, and the education system. The future economy demands a new approach. To realize the full potential of human capital and to fix the global skills mismatch, we must address seven challenges:

  • We are insufficiently focused on training for jobs that have yet to appear. It is expected, that by 2022, 27% of available jobs will be in roles that don’t yet exist.
  • Most members of the labor force are not involved in lifelong learning and continuous retraining. But skills are becoming obsolete at an increasingly fast rate—technical skills, for example, are outdated in two to five years—heightening the need for reskilling and upskilling.
  • Many people lack motivation and accountability for personal development. Only 28% of respondents to a BCG survey reported that they consider using self-service content for learning.
  • Access to labor market opportunities is limited. About 41% of job seekers find jobs through online platforms, 14% through social networks. Meanwhile, 3 billion people (mostly in Asia and Africa) lack access to the internet.
  • Redistribution of human capital is uneven. In the US, 90% of job applications are for positions within 100 kilometers of the job seeker’s location; the pool of candidates increases by as much as 20% when the search region is expanded.
  • The potential of certain labor categories is locked up. In the US, for example, working-age people with disabilities make up as much as 7% of the population, and only one-third of them work.
  • The values and needs of the labor force are shifting. Generation Z is ready to accept 10% lower earnings to work fewer hours. Only 36% of that group consider career growth to be a major priority.

“Countries must rethink the way education and training are funded, designed, and delivered; change mindsets accordingly; and implement a more collaborative approach through which best practices can be shared and labor markets can become more open,” sums up Sergey Perapechka, a BCG partner and coauthor of the report. “Collaboration will be needed not only within countries but also across borders. Countries that have open labor markets and are prepared to share best practices with their peers will be far better equipped to resolve labor market mismatches.”

Chosen excerpts by Job Market Monitor. Read the whole story @ A Human-Centric Approach to Fixing the Global Skills Mismatch and report



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