Study: Growing Skills Shortage Threatens Economic Recovery

Thursday, 24 Oct 2013 10:58 AM

By Michael Kling

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Even though unemployment remains high, many employers cannot find workers qualified to fill empty positions, according to a new study by recruiting consultant Hays Plc.

The study, title "The Hays Global Skills Index," indicates a fundamentally flawed labor market and highlights the growing gap between the needs of employers and the skills of those seeking work — a gap that's causing major inefficiencies in the global labor market.

"In short, too many people out of work and too many unfilled vacancies," writes Hays CEO Alistair Cos in a post for LinkedIn. "Six years after the first shocks of the economic downturn, the underlying strengths and weaknesses of the world's labor markets are exposed now more than ever."

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Rigid employment laws in some countries create inflexible labor markets and make employers reluctant to hire new workers. Plus, education is often misaligned with employers' needs.

To tackle the problem, governments must permit flexible contracts for overtime, wage adjustments and immigration for those with special skills, Cox argues. And educators should collaborate more closely with companies to help students acquire skills that are in demand.

Employers, for their part, must boost training and apprenticeship program for younger workers and offer retraining opportunities for older workers.

Expect both more unemployment and unfilled jobs if the problem is not addressed, he warns.

"This will slow economic recovery, lead to lower future job creation and be a waste of generations of talent."

While the problem is worldwide, it is particularly serious in the United States, which is struggling with a jobless recovery, Cox adds in a company blog post.

The recession, he says, doesn't explain ongoing high unemployment or the job market's failure to deliver skills businesses need.

Cox isn't the only one warning of a skills shortage.

Universities are meeting only 30 percent of software development staffing needs, said West Texas A&M University computer science coordinator H. Paul Haiduk, reports the Amarillo Globe-News.

"This country is in jeopardy if we don't realize that the new work force must be highly trained technically," Haiduk said at the university's recent technology summit on career opportunities, according to the Globe-News.

"In this world, we need young engineers to succeed and then take over for us," agreed Kevin Shuma, vice president for software development at CA Technologies. "No matter how good the hardware and software are, without the people to keep it going and add new development and think new thoughts, it doesn't work."

Editor’s Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See If You Qualify)

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Survey: Americans Falling Behind in Growing Global Skills Gap

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