By Katharine Mullock
While economic growth has picked up in Spain since 2014, the country is still struggling to recover from the Global Financial Crisis with unemployment still high at 17.2% (well above the OECD average of 5.8%). A key message from a new OECD report on Spain is that a better alignment between the skills people have and those required by employers would support a stronger economic recovery, while also positioning Spain to take advantage of digitalisation.
The OECD’s Getting Skills Right: Spain provides analysis and recommendations about how Spain could better address skill imbalances as part of a series of country reviews on the same topic (see related posts for Italy, the United Kingdom, South Africa and France). The report was released on 26 April in Madrid during a launch event in partnership with JPMorgan Chase Foundation and Fedea, a Spanish think tank.
Getting Skills Right: Spain provides evidence on the extent and nature of skill imbalances facing Spain. A rapid rise in educational attainment has created a large supply of tertiary graduates in Spain—35% of the population now has a tertiary degree, on par with the OECD average. However, many of these graduates are not working in jobs requiring these qualifications. In 2015, 22% of workers had a qualification which exceeded the requirements of their job, a level of over-qualification that is higher than the EU average (15%). At the same time, technological progress and globalisation have contributed to substantial changes in skill demands which has resulted in skill shortages in cognitive skills (like reasoning, quantitative and complex problem solving skills) as well as social skills and basic literacy and numeracy skills despite rising educational attainment (see figure). At the other end of the spectrum, routine skills and physical tasks are found to be in surplus including endurance, physical strength and control movement abilities.
In addressing skill imbalances, Spain faces a number of challenges. Even though participation in the new dual model of work-based training (FP Dual) has risen since its introduction in 2012, enrolment in work-based training is still low in Spain: only 0.4% of upper secondary school students are enrol, compared with 24% in the United Kingdom, 41% in Germany, and 59% in Switzerland. Employer participation in work-based training is also low, with less than 1% of Spanish firms engaged. Since vocational education and training offers the opportunity to learn applied skills which are directly linked to the world of work, higher participation in this education pathway would facilitate a better matching of skill supply and demand.
Another challenge is that spending on training for the unemployed is low. The long-term unemployed are disproportionately low-skilled older workers from the crisis-hit construction sector. Despite evidence that training can be effective at skilling the long-term unemployed for work, Spain spends relatively little on training jobseekers compared with other OECD countries.
Low literacy and numeracy skills among adults represents another challenge, particularly as this can be a barrier to the ability to learn new skills. According to the OECD Adult Skills Survey (PIAAC), about 40% of Spanish workers have low basic literacy and numeracy skills. Training options for adults to develop numeracy and literacy skills exist in Spain and some are also free of charge to encourage take up. Even so, participation is very low, possibly reflecting reluctance on the part of school leavers to return to formal education, as well as difficulties for workers to find time for such training in their work schedules.
Against this backdrop, the Spanish government and other stakeholders have undertaken a number of policy actions to reduce skill imbalances. A national job portal facilitates recruitment of workers and labour mobility. Furthermore, FP Dual provides employers with more opportunities to shape the skill supply, and recent reforms to modernise vocational training (LOMCE) have attracted more students to vocational pathways. Proposed reforms to the professional training system (Ley 30/2015) should also lead to better targeting of training subsidies on real and immediate firm-specific training needs, and where delivery will be limited to accredited institutions.
To improve the alignment between the demand and supply of skills, the OECD recommends that Spain:
- Reduce costly hiring subsidies to free up resources for targeted training for jobseekers, making them more employable over the longer-term. For instance, the use of the proposed training vouchers for the unemployed (cheques formación) could be at least partially targeted to skills or qualifications in demand.
- Expand recent pilot initiatives to offer technical support to small and medium-sized enterprises (SME) in the planning and implementation of work-based training. This has helped to increase participation of SMEs in work-based training and, if expanded, could improve employer participation in vocational education.
- Increase flexibility in the provision of basic skills training for adults—either by offering training outside of the formal education system, or in a modular format more compatible with work schedules.
- Follow through with plans to introduce a statistical profiling tool to improve targeting of public employment services by prioritising jobseekers with the highest level of disadvantage, as many other OECD countries have done (e.g. Ireland, Australia).
- Consider limiting a portion of professional training system funds to investment in high-demand skills, as employers currently use levy budgets primarily to provide mandatory workplace training (e.g. health and safety). In South Africa, for instance, a large portion of levy funds are earmarked for addressing critical and scarce skill needs, as identified by sectoral bodies.
Ensuring that Spanish workers have the skills required by firms is key to promoting the economic recovery, stronger productivity growth and rising prosperity. Other policy recommendations and good practice examples from other countries can be found in the full report. More detailed results from the Skills for Jobs database for Spain are described in the Skills for Jobs country profile.