Labour and Skills Shortage in EU – An index by CEDEFOP

Cedefop’s Labour and Skills Shortage Index (LSSI) aims to provide a standardised measure of occupational shortages that can inform decision-making regarding workforce and learning needs in the European Union.

Three pillars are identified and measured as potential drivers of future labour shortages, namely demand, supply and supply–demand imbalances.

ƒ Demand uses the estimated pressure exerted by future employment growth as a potential proxy for shortages. High-growth occupations are likely to have lags in the provision of the right types of qualifications and skills by education institutions and make it more difficult for employers to find the right employees.
ƒ Supply looks at future requirements arising from replacement needs. These refer to the employment needs that arise when workers leave an occupation due to retirement, career changes, family reasons or health issues, for example. These replacement needs often generate more job opportunities than new job creation. As a result, significant job opportunities can exist even in declining sectors.
ƒ Imbalances in the labour market occur when there is a mismatch between supply and demand for specific qualifications within occupations. There might be too few workers with the right qualifications, leading to an allocation of workers with low- er-than-needed qualifications, often associated with skill gaps and reduced productivity. Alternatively, an occupation might be using workers who are overqualified for tasks usually associated with lower job satisfaction and higher turnover, thus leading to higher costs for the employer.

Chosen excerpts by Job Market Monitor. Read the whole story @  Briefing note – Cedefop labour and skills shortage index | CEDEFOP