Exploring skills mismatches

In the changing world of work, constant adaptation is a renewed requirement for governments, trade unions, businesses, individuals, education and training providers who must rely on the systematic anticipation of skill needs to establish strategic responses and prevent skills mismatch to ultimately benefit from the opportunities for social and economic transformations. The skills mismatch represents a discrepancy between the skills that are sought by employers and the skills that are possessed by individuals. Skilling, reskilling and upskilling throughout all stages of life is a precondition and an accelerator for smooth transitions into and within labour markets and is an important aspect of the human-centred approach to the future of work.

As an effort to monitor the evolution of skills mismatches and shortages, the OECD developed and published the OECD Skills for Jobs Database. This database provides information about skills shortages, surpluses and mismatches in a manner that can be regularly updated; is comparable across countries; is available at a sufficient level of skill disaggregation to be useful to policymakers; and allows the mapping of occupational shortages into skill needs. The tool enables one to:

• identify occupation groups that are hard to fill (i.e in shortage) or in surplus along with the magnitude of skill shortages and skill surpluses; and
• identify by occupation groups, skills that are in shortage/surplus along with their corresponding skill intensities.

The measurement of skills characteristics is not always straightforward and could be measured using proxies such as hourly wage growth, employment growth, unemployment rate, growth in hours worked as well as the under-qualification growth which captures differences arising due to wage, employment and talent pressures respectively. Talent pressures arise due to qualifications mismatch where a person is said to be either over or underqualified for the job.

The ILO Skills for Jobs Database is an extension of the approach taken by OECD to low- and middle-income countries (those covered by the OECD and the ILO are mutually exclusive) with some modifications described in the accompanying methodological note. Data is derived using labour market information from household surveys compiled by National Statistical Offices (NSOs) around the world. The microdata shared by NSOs is processed by the Data Production and Analysis Unit of the Department of Statistics and the ILO generates harmonized datasets according to international statistical standards, allowing for international comparability.