Skills mismatch

OECD writes that skill mismatch is one of the main challenges faced by economies. Empirical evidence shows that, in far too many cases, workers are not well-matched with their current jobs. Some are over-skilled for their current jobs – they are capable of handling more complex tasks and their skills are underused – while others are under-skilled for their current jobs – they lack the skills normally needed for their job.

Skills mismatch on the job can be a temporary phenomenon: sometimes, for example, the demand for skills takes time to adjust to the fact that there is a larger pool of highly skilled workers available. At the same time, the mismatch between workers’ skills and their tasks at work can also adversely affect economic and social outcomes. Over-skilling can be a problem because it may lead to skills loss and a waste of the resources that were used to acquire these skills. In addition, over-skilled workers earn less than workers who are well-matched to their jobs and tend to be less satisfied at work. This situation generates more employee turnover, which is likely to affect a firm’s productivity. Under-skilling is also likely to affect productivity and slow the rate at which more efficient technologies and approaches to work can be adopted.

Skills policies should support employers in making better use of the skills available to them. Mechanisms that help managers, particularly in small and medium-sized enterprises (SMEs), to identify effective work and organisational practices, should be emphasised. These include promoting innovation and adopting technologies and practices that make the best use of the existing skills base.

Offering relevant adult education and employer-provided training can also help tackle skills mismatch, especially under-skilling. Many studies show that training can be complementary to changing demands for skills. The incidence of mismatch can be reduced through better management and more transparent information.

There are several ways to measure skills match/mismatch. Most of the academic and policy analyses on mismatch to date have focused on qualification rather than skills because of data availability. Some analyses use indirect measures of skills mismatch, but few have been based on direct measures. The Programme for the International Adult Assessment of Adult Competencies (PIAAC) will change this situation, as it will provide direct measurement of skills, as well as measures of the use of those skills at work.(Source: OECD)

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