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SINGAPORE (Sept 25): The global labour market is coming under increasing pressure even with expectations of economic growth to maintain its momentum over the next 12 months, finds the latest and seventh edition of the Hays Global Skills Index.
Based on this year’s report, Investing in the Skills of Tomorrow; Avoiding a Spiralling Skills Crisis, which is published by Hays in collaboration with Oxford Economics, the Overall Index score has increased slightly to 5.4 from 5.3 a year ago to suggest that the global labour market has come under greater strain in the last year.
The Overall Index score is an aggregate of the seven key indicators across all 33 markets surveyed. Even a subtle movement in the Overall Index score often “masks a wealth of insight and information at an individual country/regional” level, says Hays.
The main factor behind this tightening, says Hays, is a growing mismatch between the skills workers possess, and those required by employers – a trend seen across almost half (16 out of 33) of the markets which the Index accessed.
In line with its observations, Hays also highlights a growing number of open job vacancies coupled with a higher rate of long-term employment, a situation which is most apparent within Europe – notably Austria, France and Belgium.
Data from the Index has also indicated that many countries across Europe, the Middle East and the Americas are stuck in a “low growth trap”: weak productivity growth leading to reduced investment in labour and capital, which in turn weakens overall productivity levels.
This stagnation may be part of a longer-term trend, says Hays, which the firm believes is a result of macroeconomic forces such as an ageing population and a downturn in global trade.
Finally, Hays says data from its Index has presented a pattern of narrowing wage gaps between lower-skilled jobs and higher-skilled occupations.
While this may serve to reduce wage inequality levels globally, Hays also notes a persisting gender pay gap across all markets covered in its report – with women less likely to participate in the labour market than men, and less likely to find skilled employment even when they do.
Commenting on the latest findings of the index, Alistair Cox, CEO, Hays plc, says: “It’s already a problem if employers can’t find workers with the necessary skills and experience for today’s roles, and going forward the issue will only become more challenging with further advances in technology, particularly in AI and machine learning.”
Going forward, Cox also believes it is crucial going forward that more investments be made in education and on-the-job training, such that workers can fill the roles their employers are creating as well as boost their productivity.
“The Index has also exposed the alarming signs behind the global lack of growth in productivity and wages. Labour productivity across the globe has flatlined as firms fall behind with investing in new technology and crucial infrastructure development post the financial crisis, both aspects that can drive productivity forward,” he adds.