Taking stock of skills

It is crucial for countries competing in an advanced economy to have a skilled workforce. But with labour markets changing so fast, how can workers keep up? The OECD Skills Strategy, due to be launched in May together with a comprehensive new survey of adult competencies, will help provide answers. 

Unemployment is at record levels in the developed countries; but did you know that, in 2009 when the economic crisis was in full swing, more than 40% of employers in Australia, Japan, Mexico and Poland reported having difficulties in finding workers with the right skills for the job? Meanwhile, up to one third of workers consider themselves over-skilled for their current job, while 13% believe they are not skilled enough.

Over the past 50 years, the balance among employment sectors–and the kinds of skills those sectors require–has been shifting. From heavy manufacturing through smart technology to services, both traditional and new occupations demand more highly skilled workers. Employers’ needs for specific skills are constantly changing and difficult to predict. Since the 1980s, most countries have worked to increase the proportion of students who complete secondary education and move on to post-secondary and higher education. Higher levels of educational attainment are associated with lower rates of unemployment and higher earnings, on average. Conversely, it’s costly for governments to support poorly skilled people who are unemployed or underemployed.

But it is not easy. Even in the most economically advanced countries, large proportions of adults have poor literacy skills. According to one study, the International Adult Literacy Survey, between one-quarter and three-quarters of adults do not have what is required to cope with the demands of modern society. Meanwhile, the Adult Literacy and Lifeskills Survey shows that individuals who have poor foundation skills, that is, skills in literacy, numeracy and problem-solving, tend to be economically disadvantaged throughout their lives.

Even skilled workers have some cause for concern in an economic downturn. If their skills aren’t put to use, whether because of a mismatch between workers’ skills and those demanded by the job, or because individuals are out of the labour market entirely, then the resources that were invested in nurturing those skills go to waste. Worse, skills that are not used can waste away. Think of them as the muscles of the mind: use them or lose them.

Given the unpredictability of the labour market, all workers, regardless of educational level, have to be willing to learn new skills and adapt to changing demands. Young people now entering the labour market may well have to change employers and even occupations several times during their (probably longer) working lives. They have to be able to manage uncertainty and change, as well as be productive in increasingly competitive circumstances. So the skills they’ll need are not just occupation-specific, but also more general–such as basic literacy and numeracy skills, skills in problem-solving and analytic reasoning, interpersonal skills, the ability to work in teams, skills in using information and communication technologies, and, quite simply, knowing how to learn. This means that governments may have to adjust their education policies to emphasise lifelong learning, in addition to training, during the compulsory years at school.

More broadly, governments need to match skills supply with demand. Again, this is easier said than done, and to help light a way forward, the OECD Skills Strategy will be launched in May 2012. It is designed to help governments review and improve the design and implementation of their national policies relating to the demand and supply of skills.

The strategy will take a government-wide approach, with ministries of education, migration, family, science and technology, as well as employment all involved. Trade unions, employer organisations, chambers of commerce, non-governmental organisations, universities and other interested parties are also playing a part in building what will be a cost-effective, pragmatic policy instrument.

It will draw on data from tried and trusted OECD sources, such as the Programme for International Student Assessment (PISA), which measures the extent to which 15-year-old students around the world have acquired the knowledge and skills needed to participate fully in modern societies. It will also draw on a new groundbreaking study called the Programme for the International Assessment of Adult Competencies (PIAAC), which assesses the level and distribution of skills among adults, with a focus on the workplace.

With first-round results due for release in 2013, PIAAC is simply the most comprehensive international survey of adult skills ever. It is based on interviews with some 5,000 adults aged 16 to 65 in each of 26 participating countries. The interviews, conducted between late 2011 and early 2012, aim to determine the level of their skills and how they use their skills at work and in their communities.

The assessment focuses on adults’ abilities to solve problems in technologically-rich environments, and their skills in literacy, numeracy and reading, including word recognition, vocabulary and fluency.

These projects are ambitious but necessary. If they can provide a blueprint for designing and applying policies that make the most of each country’s human capital and nurturing people’s skills, that will be an achievement indeed.

See: 

OECD (2011), Towards an OECD Skills Strategy, OECD, Paris.

OECD (2010), “The OECD Programme for the International Assessment of Adult Competencies”, brochure, OECD, Paris.

www.oecd.org/PIAAC 

See also: 

www.oecd.org/education

The Adult Literacy and Lifeskills Survey 

The OECD Programme for International Student Assessment

©OECD Observer No 287 Q4 2011




Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.60% Mar 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 6.993% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 12 May 2015

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