How to bridge the gap between education and employment
Belgium has a high standard of education, according to the OECD. Given the current graduation patterns in Belgium, it is expected that 68% of young people will complete an upper secondary level vocational qualification in their lifetime, compared with the OECD average of 47%. Belgium also ranks eighth among OECD countries for levels of expenditure from primary through post-secondary education, spending $11,028 per student per year compared to the OECD average of $9,308. This is evidenced by the caliber of the country’s workforce. Indeed, AmCham Belgium’s member companies have consistently praised the quality of the highly skilled and multilingual workforce and often cite it as a primary reason for their continued investment in Belgium.
However, despite these positive characteristics, there is a growing shortage of qualified workers to meet employers’ needs. This is particularly worrying in the context of stagnant growth and the enduring economic crisis, which has provoked high levels of unemployment and therefore large candidate pools for vacancies. Yet, a recent study by Manpower has revealed that 24% of Belgian employers are struggling to fill key positions.
As businesses rely on a talented workforce in order to stay ahead of the competition, this disconnect will limit future opportunities for growth in Belgium if it is not addressed. Indeed, according to Manpower’s latest survey on the talent shortage, already almost one employer in two recognizes that talent shortages are having a negative impact on the ability to serve their clients. Technicians and skilled workers are of particular importance, for instance, to Belgium’s chemical and petrochemical industry, which needs not only engineers but also welders and machine operators to maintain the equipment and pipelines. Yet, they are the most difficult positions to fill, which does not bode well for business in Belgium.
So, why are these skills missing?
The root of the problem lies in the profound disconnect between educational institutions and the business world. A 2012 survey by McKinsey & Company found that 70% of employers blamed inadequate training for the shortfall of skilled workers, while 70% of education providers believe they suitably prepare graduates for the labor market.
Additionally, according to a survey by USG Innotiv Engineering in March 2013, 30% of new hires in Belgium did not meet the required standard. As a result, companies have been pushed to provide on-the-job training, investing significant time and money in their new employees. Unfortunately, Marc Vandeleene, Public Relations and Communication Manager at Manpower Belgium, believes that, in this respect, employer patience is wearing thin. “If graduates do not possess the required skills, they will not be hired as they do not want to take the time to train them.”
“If graduates do not possess the required skills, they will not be hired as they do not want to take the time to train them.”
-Marc Vandeleene, Public Relations and Communication Manager, Manpower Belgium
The heart of the matter is helping young people to learn relevant skills more effectively in order to meet the demands of the labor market. The Chamber therefore recommends an initiative to spur greater cooperation and communication between companies, governments and education providers. In this way, educators and education policymakers will be able to better align the curriculum with the current and future needs of businesses. One simple way to do so would be to introduce the use of technology in the classroom at an early age. Aside from imparting technical skills at a young age, the appropriate use of technology in the classroom could also inspire young people to consider future careers in ICT and, in any case, become technology-savvy.
At the same time, education will need to focus more on creativity, teamwork, entrepreneurship and practical skills, rather than on purely theoretical knowledge. Internships should to be facilitated and become an integral part of virtually every degree.
Fortunately, faced with high youth unemployment figures, young people today are taking matters into their own hands. With youth unemployment having reached a staggering 23.3% in Belgium in the first quarter of 2013, more students have opted for studies in science, technology, engineering or mathematical (STEM) subjects in order to avoid becoming part of this growing statistic. Agoria, Belgium’s technology industry trade association, has indicated that chemistry and lab technology have especially grown in popularity within Flanders, with some specific subjects witnessing a 94% increase in uptake for the 2013-2014 academic year.
Easy as 1, 2, 3?
While these figures are promising, labor market failings cannot be laid at any one door, as there are a multitude of culprits, including unsupportive public policy, rigid labor laws and traditional HR techniques. While an increasing number of STEM students will help resolve part of the problem of supply and demand, a more comprehensive review of the education system and labor market must be undertaken.
The growing disparity between skills taught in educational institutions and the skills needed by businesses is not limited to graduates. It is representative of a disruption to the traditional career path of graduate to employee to pensioner, which is rapidly becoming obsolete as careers today must take into account the continuing convulsions of technological revolution. According to Manpower, due to the more volatile and chaotic nature of our digital world, the new career path will consist of continual training and adjustment in order for older employees to be able to keep pace with new trends. The role of social media in corporate communications is but one example of how much impact technological revolutions can have on corporate strategies.
The Chamber therefore recommends that the government introduce a more supportive public policy for employee training. In turn, this will help resolve the skills gap across generations and enable employees to remain in the workforce longer. As Belgium has one of the highest early-retirement rates in Europe and has trouble activating its older workforce, this may help resolve, or at least alleviate, the looming pension crisis as well as the talent gap.
Increased flexibility is also a critical feature for deeper labor market reforms. The Association for Competitive Technology (ACT) highlighted flexible labor laws as key to allowing growth in innovative technologies, as it allows start-ups to hire without running the risk that rigid labor laws may sink their initiative. Their latest data show that in the past five years, the app economy alone has generated 800,000 jobs in Europe, demonstrating the importance of supporting small companies as they drive growth and employment.
Additionally, a more flexible labor market will allow larger businesses to adapt their human resources structures to a format which better matches the rapid pace of technological development. “The key to success is agility and flexibility,” says Marc Vandeleene.
For more of our policy recommendations, please refer to our Priorities for a Prosperous Belgium.