Human Centricity Will be Key to Fixing the Global Skills Mismatch

By: Leila Hoteit and J Puckett

Employers often complain about the skills gap. But what we are in fact facing globally is a bigger problem—a mismatch that exists in a world where the skills are there but not necessarily in an organization’s industry or region. This forces the recruitment team to hire people who either lack sufficient competencies or are overqualified for the job.

According to recent BCG research, the skills mismatch impacts an estimated 1.3 billion people worldwide, affecting two out of five employees in OECD countries, causing both human and economic costs. Not only does this mismatch prevent millions of people from fulfilling their full potential, the mismatch results in a severe loss of labor productivity, hampering companies’ ability to grow—effectively imposing a 6% annual “tax” on the global economy.

The problem is that our systems for building human capital are woefully out of date. For a start, huge gaps exist between what the education system provides and what employers actually need. Without critical insights from the private sector, our education and skills development systems will continue to produce people whose competencies are regularly outdated by the time they graduate.

Meanwhile, we are still operating according to the norms of a 20th-century social contract, one that comes with standardized forms of education and training, labor markets that lack transparency, poor job mobility, and job-for-life expectations.

At time of high uncertainty, this needs to change. New forces—from the advance of the digital economy to shifting demographics and geopolitical upheavals—are shaping human capital. To remain current, we need to equip people to adapt to the changing requirements of employers, the technologies that are emerging, the new ways of working that lie ahead and to be lifelong learners.

What today’s complex and rapidly changing world of work calls for is a fundamentally new pact between employee, employer, the state, and the educational system.

This means creating conditions that will empower employees to take greater responsibility for their own professional development and enable them to choose where and how to apply their skills, and where to focus their own training and personal development.

Having worked with both private and public sectors organizations around the world, we’re encouraged to see how some governments and companies are doing this—stepping up to provide skilling and reskilling opportunities for workers.

But more can and should be done. Governments must provide equal and open access to development and employment opportunities. Employers should pursue non-discriminatory hiring based on skills and the changing values of employees. Educators need to develop personalized training that can be adapted to the constantly evolving requirements of employers.

Nor can nations do this alone. It’s rather like global trade. Just as growth rates for open economies are almost three times higher than those that are more closed, countries with labor markets that are more open and that are prepared to share best practices will ultimately be able to do the most to resolve their labor market mismatches.

Above all, we need a shift in mindsets. Instead of treating a person as simply a commodity—an element of the workforce or a passive consumer of education and training services—we believe a human-centric approach must prevail. Only when we treat people as equal partners in shaping society and the economy of the future can we fix the skills mismatch and unlock the full potential of global human capital.

Click here to read the full report ‘Fixing the Global Skills Mismatch’