When an employer is hiring, they are looking for a set of skills to complete a series of tasks. Until the employer can recruit a new employee, the needed skills remain missing. Job vacancies can thus be thought of as skill-set vacancies, or as unfilled skills demand. Such sought-after skills are valuable. Salaries or wages reflect, in part, how valuable a certain skill set is to an organization. So, we can define the value of skill vacancies as the unrealized monetary value when a vacancy for particular skills goes unfilled. By combining information on job vacancies, the skills profiles of those vacant jobs, and typical wages per role, we are able to assess the aggregate cost of skill vacancies to the Canadian economy. We can then observe the value of skill shortages by looking through the lens of occupational data and computing the unrealized wages owing to vacant skills.
We further explore the fact that skills tend to correlate together in clusters. Such skill groups give us insight into the importance of training more than one skill at a time. The relative vacancy values of these groups should help prioritize policy and educational investments to address those gaps and, in doing so, to recapture some of the lost economic value.
• The unrealized value of skill vacancies in the Canadian economy rose from $15 billion in 2015 to $25 billion in 2020. Rising job vacancy numbers and wage rates, as well as changes in the mix of jobs with vacancies, all contributed to this increase.
• Measured as a share of the economy, this unrealized value increased from 0.85 per cent of GDP to 1.33 per cent—an important metric for understanding the impact of skill vacancies on prosperity and growth. This increase partially reflects the decline in GDP in 2020 due to COVID-19.
• The six most highly valued skill vacancies are active listening, critical thinking, reading comprehension, speaking, monitoring, and coordination. Vacancies related to each of these skills currently cost the Canadian economy $1 billion or more annually in unrealized value owing to unfilled job vacancies.
• Skills tend to be found in sets, which has implications for how to develop skills and potentially address vacancies. There are five broad skill groups: basic, social and emotional, resource management, systems, and technical skills.
• Skills and skill groups can be valued using the average wage and vacancies for those occupations. Doing so allows policy- makers and educators to prioritize investments. The skill group with the highest wage-and-job vacancies value is social and emotional skills, worth $8.5 billion in 2020—making up a third of the unrealized value of unfilled skills demand arising from job vacancies that year.
Chosen excerpts by Job Market Monitor. Read the whole story @ Economic Cost of Skills Vacancies