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Global – Labour market strained talent mismatch at highest since 2012: Hays Global Skills Index

01 October 2018

While global economic growth is expected to maintain its momentum over the next 12 months, it is not generating a corresponding improvement in labour productivity or wage growth according to the latest Hays Global Skills Index.

This year’s overall index score — an aggregate of the seven key indicators across all 33 markets surveyed — edged up to 5.4 from 5.3, suggesting that the global labour market has come under greater strain in the last year.

The report, “Investing in the Skills of Tomorrow; Avoiding a Spiralling Skills Crisis,” examines professional employment markets across 33 markets and measures the ability of companies to access skilled workers. It found almost half of the countries assessed have seen a rise in the rate of unfilled employment vacancies in 2018. Overall across all countries, the talent mismatch is now at its highest since the index began in 2012.

“This year’s Index has highlighted a growing mismatch between the skills workers possess and the skills that are required by businesses,” said Hays plc Chief Executive Alistair Cox. “It’s already a problem if employers can’t find workers with the necessary skills and experience for today’s roles, and going forward the issue will only become more challenging with further advances in technology, particularly in AI and machine learning.”

The research also indicated that many countries across Europe, the Middle East and the Americas are stuck in a low growth trap, whereby weak productivity growth has led to reduced investment in labour and capital, further weakening overall productivity levels. Most worryingly, this stagnation may be part of a longer-term trend; the result of macroeconomic forces such as an ageing population; a downturn in global trade; and reduced investment in education and training.

The data also presented a pattern of narrowing wage gaps between lower-skilled jobs and higher-skilled occupations, which may serve to reduce wage inequality levels globally. The research also showed across all markets covered in the report that the gender pay gap persists. It also revealed women are less likely to participate in the labour market than men and when they do, are less likely to find skilled employment.

“There are important long-term trends to consider here and the reasons behind them are important for business, policymakers and workers themselves,” Cox said. “It is crucial that going forward more investment is made in education and on-the-job training so that workers can fill the roles their employers are creating and boost productivity. We are at a critical junction, where if we don’t seek to address these issues in the very near future, then the skills crisis risks spiralling out of control and the global labour market will struggle to keep up and provide the skills the world needs.”

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