The Workforce Conundrum Part 1: The Job Needs / Skills Gap

We have been hearing about workforce issues for some time now, but do they really exist?  I guess that depends on your perspective.  Many seem to think so…so, let’s start peeling the onion to get to the heart of the matter and see if we can’t ultimately recommend some solutions as well.

First, a bit of background on me, so you know from which I speak.  I have the privilege of leading a trade association that operates on behalf of the entire electronics industry (www.ipc.org).  Because of this role, I see many different segments of the industry (design, suppliers, raw materials, manufacturing (boards and assembly), harnessing, primes, etc.).  These members range from multi-billion-dollar multinationals to small and medium-sized organizations (~80%) y across the globe.   These companies serve many critical industries like medical, transportation, communication, consumer, computer, defense, aerospace, etc. and are in most parts of the world.  These companies employ millions of people and are most assuredly in a growth market.

The range of concern varies broadly among these companies.  When I ask the question, “Is workforce education a problem?” the answers range from “a little one,” or “sure, we have some challenges,” to much more desperate “my business is suffering – we’re going to close our company if we don’t find some good people” type of responses.  There has been no strong correlation to size of company for these responses, and the issue is global.  The European Union (EU) is striving to resolve this issue through efforts like the “New Skills Agenda,” and the United States has many programs it is exploring including more recent efforts like improving the apprenticeship programs.  The situation also exists in Asia as much of the workforce can be transient in nature.

So, it is a real issue, but before we jump into how to solve the issue (that would be a bit presumptuous at this point), it makes sense to initially better understand – why is this such a problem?

The job needs/skills gap issue is one of several major factors that are helping to aggravate this increasingly challenging thorn in the global economy.  Are there really that many jobs out there that need filling?  The short answer is ‘yes.’  Let’s add a little data to that definitive statement, shall we?  Eurostat has shared that the percentage of jobs available in the EU has nearly doubled over the past decade.  In just the past year (2016-2017), only two countries in the EU have decreased their job vacancy rates (Greece and Malta).[i] (See figure 1 below.) This could be due to a few factors. One, there are perhaps more jobs being created, so there is a higher percent of those jobs going unfilled, or two, there are less people capable of filling the jobs that are open. Or a combination of both.

Figure 1

The situation highlighted in the EU is similar in the U.S.  In a study by Deloitte and The Manufacturing Institute, 84% of the executives agreed there was a talent shortage in the U.S. manufacturing sector.  it was estimated that there will be 2 million jobs open of the 3.5 million manufacturing jobs by 2025. (see figure 2 below)[ii].  It appears that not only have there been jobs going unfilled for some time, but the situation is getting worse!

 

Figure 2
Source: Deloitte analysis based on data from U.S. Bureau of Labor Statistics and Gallup Survey.

So, in much of the world, we have more and more jobs open.  One of the major reasons WHY — the people with the skills required to fill them just aren’t there.  Next week, we will look at a related reason WHY we are facing this workforce conundrum: Are people available for these jobs?

 


[i] Job vacancy statistics. (2018, September 17). Retrieved September 19, 2018, from https://ec.europa.eu/eurostat/statistics-explained/index.php/Job_vacancy_statistics

 

[ii] Giffi, C., Dollar, B., Drew, M., McNelly, J., Carrick, G., & Gangula, B. (n.d.). The skills gap in U.S. manufacturing 2015 and beyond. Retrieved September 19, 2018, from http://www.themanufacturinginstitute.org/~/media/827DBC76533942679A15EF7067A704CD.ashx Analysis by Deloitte and The Manufacturing Institute

 

Hi-Res image at https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Job_vacancy_rates,_2016_and_2017_(%25)_FP18.png

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