At Hays we are seeing different challenges in labour markets globally, but one thing that seems to resonate across them all is that there are still not enough skilled workers and businesses are struggling to find the skills they need to operate and ultimately, succeed.
Ever since the financial crisis struck, global labour markets have been buffeted by one shock after another - we have witnessed high youth unemployment in Europe; a massive fall in labour market participation (which plainly means the number of people in the workforce or activity looking for work) in the US; ageing workforces in Japan and Germany; low productivity in the UK; rising skills gaps in Asia Pacific and the need for structural reform in India and Latin America.
The Global Skills Index’s scoring is an aggregation based on seven key indicators: education flexibility; labour market participation; labour market flexibility; talent mismatch; overall wage pressure; wage pressure in high-skill industries; and wage pressure in high-skill occupations.
With growth rates outpacing expectations and the rest of Europe, Ireland’s improving economy triggered a significant change in employers’ attitudes towards hiring. According to this year’s figures, Ireland overall score has decreased to 5.7 out of 10 in 2015, down from 5.8 in 2014. With lowering unemployment rates and positive economic outlook, it’s the mismatch of skills that is currently putting pressure on Irish labour market.
“There are many promising signs that the Irish economy is starting to turn around. Growth rates are higher than in the rest of Europe and have far outpaced expectations. Companies in high-growth sectors such as construction and property, IT and engineering face increasing skills shortages, along with a necessity to review their attraction strategies to secure talent in a rapidly evolving employment market.
Particular stress is seen in those sectors and professions which experienced both an exodus of established skills during the recession and a dearth of new talent coming through the education system.”
Richard Eardley, Managing Director, Hays Ireland
The report also revealed the following:
• A worrying ‘employment gap’ - the difference between the number of people in work today and the number that would have been employed had labour market participation remained at pre-crisis levels. Although employment levels are rising, this gap is still equivalent to over 11 million people globally, equivalent to one in 20 of today’s total workforce.
• The talent shortage, particularly in highly skilled industries, is having an adverse impact on productivity with people being either over- or under-qualified for their jobs and working longer hours without necessarily improving output.
• The challenges employment markets face also highlights that a supportive regulatory environment is required to help businesses grow and create jobs, opening up new opportunities for people. More action is needed by governments not only to steer economies through the recovery but also to enable businesses to access the talent they need to build their workforces of the future.
Please visit The Hays Global Skills Index 2015 website for more information.
Notes on methodology
The Hays Global Skills Index 2015, a report published by Hays in collaboration with Oxford Economics. The report, titled “Labour Markets in a World of Continuous Change” is based on an analysis of professional employment markets across 31 major global economies, highlighting the dynamics of the world’s skilled labour market.
The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market, such as education levels, labour market flexibility and wage pressures.
An overall score of above 5.0 indicates that the labour market is ‘tighter’ than normal. A score below 5.0 indicates the market is ‘looser’ than normal. Within these overall scores, however, the scores attributed to each of the seven indicators can vary significantly, highlighting the different dynamics and pressures faced by each country.