By Marieke Vandeweyer
The new OECD Skills for Jobs Database is being released today at the conference on Adapting to Changing Skill Needs at the OECD Headquarters in Paris. The database provides timely information for European countries and South Africa about skills shortages and surpluses, as well as qualification and field-of-study mismatch. The database covers a wide range of skills, including cognitive skill, social skills, physical skills and knowledge requirements. The Skills for Jobs data are available through an interactive, user-friendly web tool, as well as in the traditional database format on the OECD Statistics portal.
The importance of measuring skills imbalances
The demand for skills in the labour market is undergoing substantial change as a result of technological progress, globalisation and population ageing. At the same time, developments such as increased labour market participation of women, higher shares of younger people completing university studies and greater migration flows have altered the supply of skills. In light of these changes, it is important to ensure that the skills of each country’s workforce are well matched to the skill needs of its labour market.
Measuring skill shortages, surpluses and mismatch
The Skill Needs indicators, i.e. the indicators measuring skill shortage and surplus, are constructed on the basis of five sub-indices: wage growth, employment growth, hours worked growth, the unemployment rate and under-qualification growth (Figure 1). These sub-indices are calculated at the occupational level, and are then compared to their economy-wide averages. For example, when wages of science and engineering professionals grow faster than the average wage across occupations, this signals possible shortages, as employers raise wages to attract scarce talent. Similarly, when average hours worked in this occupation grow faster than the country average, this signals that employers might be increasing work intensity for their employees because of increased demand and low availability of workers with the required skill set and level.
No single sub-index provides, on its own, a perfect signal for skill needs. Wage growth, for example, might be driven by collective bargaining agreements, rather than by skills imbalances, and employment growth may signal demand for labour, but not necessarily a shortage of skills. By combining five sub-indices into one final indicator, the impact of confounding signals is minimised and the power of the final indicator amplified.
The indicator of surplus and shortage at the occupational level is then translated into skill needs by mapping the occupations to their skill requirements. The final skill needs indicator provides information about the direction (surplus or shortage) and the mgnitude of the need for a range of skills.
Figure 1: The structure of the skill needs indicators
Source: OECD (2017), Getting Skills Right: Skills for Jobs Indicators, OECD Publishing, Paris
The Mismatch indicators compare each individual’s qualification level and field of study to the level or field generally required in the occupation. The “normal” qualification level that is required in an occupation is defined as the qualification level that is most observed among people employed in that occupation. People can be over-qualified, when their qualification level exceeds the one that is usually required in their occupation, or under-qualified, when they have a qualification level below the most commonly observed level in their occupation. The “normal” fields of study are defined in a normative way, attaching to each occupation the fields of study that best match the jobs in that occupation.
A full description of the methodology, as well as an overview of key results from the OECD Skills for Jobs Database is provide in the new OECD publication “Getting Skills Right: Skills for Jobs Indicators”.
Using the OECD Skills for Jobs Database
The OECD report “Getting skills right: Good practice in adapting to changing skill needs” highlights a range of country examples of how policies can address skills imbalances. The information from the Skills for Jobs Database can be used to target these policies to the needs of each country’s labour market. Countries can, for example, use the data to adapt training content for the unemployed or to identify skill areas where additional incentives for training participation and provision, financial or not, can be provided.
The database can also be useful to other stakeholders. For example, the database can be a useful tool for individuals wanting to re-skill or upskill. Employed individuals wanting to make a career change, can identify which skills are most needed. This is particularly important for individuals employed in surplus occupations, who potentially face poor employment prospects. In the Skill for Jobs web tool the skill requirements of occupations can be compared to see which skills need to be further developed through training. These training profiles allow individuals to see which skill investments would be required to move from one occupation to another, and ideally from a surplus occupation to a shortage occupation. In a similar way, career guidance counsellors can use the web tool to provide advice that responds to labour market needs. The example below show that in Italy “Legal, social and cultural associate professionals”, which are in surplus, would need to invest in the development of skills such as mathematics, reading comprehension and negociation, if they would like to move into “business and administration associate professionals” jobs, for which there is a shortage (Figure 2). Finally, employers could use the Skills for Jobs web tool to identify occupational skill profiles that are similar to those they require in order to maximize their chances of recruiting for hard-to-fill vacancies.
Figure 2: Training profile for “Legal, social and cultural associate professionals” wanting to switch to “Business and administration associate professionals” jobs (Italy)
Source: OECD Skills for Jobs web tool
More details on how to use the Skills for Jobs database are provided in the Skills for Jobs user guide which is available on the Skills and Work webpage.
Stay tuned for more posts on the OECD Skills for Jobs Database and other Getting Skills Right publications.