We are hiring! Skills shortage in industrial countries

The working industry is facing a lot of challenges right now. Beneath the encompassing pandemic, there is the ongoing change through innovative technologies, like Artificial Intelligence, allowing the industry’s revolution towards automation. On the other hand, there is a less tangible development: skills shortage. When talking from skills shortage what is mostly meant is a lack of positions fitting jobseekers, so employers are not able to find employees meeting their expectations. But it can also mean a worker does not have certain skills that are expected from him. Either way round: There is a great demand for positions that companies try to fill. This article is about matter of the problem of finding skilled workers and what consequences it has.

Origins of a lack of employees

Of course, in a complex construct as a society, there are various reasons leading to a state of skills shortage. Experts mention four reasons as main aspects.

1. The mindset regarding education

In nowadays society, high education is considered as a crucial requirement for a fulfilling job and a bright future. Therefore, the average level of graduation increased and there is an academization of society ongoing. For example, among the mid-sixty-year-olds only one fourth have an A-Level or a comparable degree, while nowadays more than half of the mid-twenties have one. As people want to do jobs adequate to their qualifications, many jobs cannot be filled due to an over-qualification of the possible applicants.

2. The age-structure

Everybody who even had a quick glance at the age structure of our society is aware of the Baby Boomers Generation - a peak in birth rates. They are born between 1946 and 1964 when the second world war was over and the economy started to flourish again. Consequently, this generation is now between 56 and 74 years old and contemporary more and more of them are retiring. This age group offered a lot of experience and workforce, which is hard to be fulfilled by the following generations.

3. Definition of skill.

The wording skills shortage implies the word skill, which can be interpreted in different ways. Most people are thinking of it as the level of education and degrees. This connects to point one: In nowadays society, high education is considered as a crucial requirement for a fulfilling job and a bright future. But for many employers, there are not only those hard skills that qualify an applicant for a certain job but also the soft skills. The lack of soft skill is truly a problem in the working world. This is, inter alia, due to the mindset in society as young people are often admonished to keep their CV in mind. Sometimes, this seems to be considered more important than building a strong personality and gaining soft skills.

4. Economic Growth: low unemployment.

What actually is a very good sign regarding the wealth of a country, can also lead to problems. If a country is economically growing and is therefore constantly in need of new workers, low unemployment is a result. What might seem good for jobseekers, can be very worrying for employers. There is a shortage of workers fitting their job offer on the Labour Market.

Working on it

There is a variety of factors that can be adapted to face the skills shortage in business. Especially managers need to realize there is a priority shift away from the size of salary more to other factors that make jobs attractive to employees, for example, appreciation, flexibility, and feedback culture. However, there are jobs, where not only the soft factors have to be improved, but also adequate paying. In times of COVID-19, there was a focus on the paying gap between economic and social jobs. As many social jobs, like educator or nurse, are system relevant, there need to be a fair paying in comparison to economic jobs. Consequently, there has not only to be a new way of thinking making jobs more attractive due to satisfaction and happiness but also to fair paying and an upgrade of appreciation for less prestigious jobs. Additionally, in the process of work not only being duty but also a part of the personal identification, companies need to offer reskilling to their employees. A new way of thinking could also be offering on-the-job training to qualify a worker for a job, who initially lacked required skills or experience. But there are also quite unconventional solutions. For example, the government of New Zealand did a proactive step and set up a Website, where people can check whether their profession is defined as a skill shortage in NZ. If so, the government provides information about Visa right away.

Use it or lose it

One thing is sure: The economy needs to face the development of a growing shortage of workforce. Many companies are not as lucrative as they could be, because of a lack of skilled workers.

At the moment in Germany, there are expected to be around 560,000 open positions as an average over 2021. However, compared to the years 2018 and 2019 this number shrank by more than 200,000 open positions. Before the crisis, the number of open positions was expected to triple to over 2,3 million vacancies by 2030. This forecast might not be valid anymore and it is hard to foresee the next couple of years, but the encompassing mega trends and challenges will stay the same. Especially for the electronics industry those are: faster development cycles and higher complexity, which can lead to problems in terms of time and quality. Therefore, this may currently not be the case for every company, but the need for skilled workers is inevitable.

This crisis will be overcome. By that time, companies should have worked on the best working conditions they can offer for their employees to offset the origins of skills shortage mentioned before. This will help companies to be successful in the long-term and face the future without the restrictions we have to deal with at the moment.

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