Skills - Predicting, Understanding, and Locating Shortages in Europe

The study will address significant gaps in the understanding of skills deficiencies in Europe – i.e. the extent, causes, and implications of skills shortages and skills gaps. Skills shortages refer to where employers face difficulties recruiting people from the external labour market because applicants lack the skills, qualifications, or experience sought. Skills gaps refer to the extent to which organisations’ workforces lack the skills required to meet their business goals. There is a tendency to think that skills shortages and skills gaps will disappear over the medium to long term, so they do not require policy interventions. The evidence suggests otherwise. Shortages and gaps do not clear quickly enough, certainly from a policy-making perspective, with negative consequences for individual workers, companies, and, in aggregate, the economy as a whole. This has the potential to damage organisational performance and productivity. It is thus important to measure skills shortages and gaps, locate where they arise (or are anticipated to arise) with respect to jobs, sectors, and countries affected, and analyse their causes and means of mitigation. The study will provide a conceptual review of skills shortages and gaps, and devise a means of measuring their incidence and the extent to which they are likely to arise in the future as a consequence of key changes in the economy (notably digitalisation). The study will provide a methodology for identifying the extent, causes, and implications of skills deficiencies in Europe. A series of indicators will be devised, including a Skills Shortage Index, which can be incorporated in a software tool for use by those responsible for labour market skills intelligence at national and pan-European level. The tool will be road-tested by working with those responsible for producing labour market skills intelligence at national level to develop something that provides a valuable addition to that already produced.