The Hays, Global Skills Index, is an annual report assessing the dynamics of skilled labour markets across 31 countries.*
According to this year’s figures, Ireland overall score has increased to 5.8 out of 10 in 2014, up from 5.5 in 2013. The Index also noted an increasingly secure economic recovery for Ireland, citing expected growth of 2.8% for 2014.
The 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.
The Index also noted the drop in overall unemployment in Ireland, from 13.1% in 2013 to 11.7% in 2014, and in long-term unemployment from 8.1% in 2013 to 7.2% in 2014, as contributors to the country’s improved ranking.
These improvements were attributed especially to Ireland’s high international PISA rating (which measures secondary school pupils’ literacy, numeracy and science ability), less restrictive labour market regulations, and less overall general wage pressure (with the exception of specific high skilled industries).
A key finding was, however, the high level of “talent mismatch” in the Irish economy. During the economic downturn, many high-skilled workers who lost their jobs relocated or emigrated, exacerbating the existing skills shortage, or in some instances creating new ones entirely.
The Hays Global Skills Index awarded the United Kingdom an overall score of 5.1, a 0.1 decrease on last year. Like Ireland, the Index cited long-term unemployment as a contributor that country’s similar problem with a high level of talent mismatch.
Based on the results of the Global Skills Index, Hays proposed three key recommendations for governments, policy makers and employers:
- Businesses need to partner with education authorities to create education systems that ensure all countries are producing graduates with the skills that closely align with what businesses need.
- Governments need to work with business to ensure that labour regulations are developed with the direct aim of increasing the availability of workers with the required skills.
- Government policy must draw a clear distinction between mass immigration and skilled migration to ensure organisations have access to the skilled workers they need.
Richard Eardley, Managing Director of Hays Ireland, said Ireland was “making inroads to reduce unemployment and drive productivity up”, adding:
“Today’s analysis of Ireland’s skilled labour market is broadly positive. A tightening labour market points to a return to a competitive, functioning jobs market, where there are both job opportunities and increasing numbers returning to work. However, employers are still faced with some serious challenges, including a skill shortages across a number of sectors. It is difficult to find professionals with the right skills and qualifications for some roles on offer and this has already put pressure on wages, which is damaging if not addressed.
“Attracting suitably qualified professionals to Ireland including encouraging our immigrants back to Ireland, ensuring the right legislation is in place and tackling educational deficits in schools is critical if we are to ensure that right labour market dynamics for economic recovery exist,” said Mr Eardley.
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Hays Global Skills Index key findings:
- As the global recovery continues and more skilled jobs are being created, the talent crisis will continue to worsen
- Companies are struggling to find employees with the necessary skills, particularly in high-skill occupations such as IT and engineering
- Developed economies are experiencing the most severe labour market pressures, including the US, Germany, France and the UK. Meanwhile developing countries – such as Brazil, Mexico and India – have seen conditions ease
- In 2014, wage pressure is evident in a number of labour markets around the world. Talent mismatch levels and labour market participation have also worsened
- Governments and businesses must work together to find new solutions, to better develop local workforces with the skills industry needs and thereby support further economic growth
Notes on methodology
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.
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2014 the Group employed 8,237 staff operating from 237 offices in 33 countries across 20 specialisms. For the year ended 30 June 2014:
– the Group reported net fees of £724.9 million and operating profit (pre-exceptional items) of £140.3 million;
– the Group placed around 57,000 candidates into permanent jobs and around 212,000 people into temporary assignments;
– 24% of Group net fees were generated in Asia Pacific, 42% in Continental Europe & RoW (CERoW) and 34% in the United Kingdom & Ireland;
– the temporary placement business represented 59% of net fees and the permanent placement business represented 41% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA
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