The Hidden Cause of the Skills Gap Revealed

There is a vicious cycle at play in our current labour market. The “skills gap problem” has become a classic HR cliché, provoking eye-rolls and exasperated gestures – “we’ve heard it all before!”. The skills gap refers to the apparent divide between the skills employers expect employees to have and the skills employees and job seekers actually possess.

The skills gap problem is real

Yes, this is becoming a tiring discussion with every thought leader pointing at who is “really” at fault. Education and technology get the brunt of the blame – politicians and policy makers claim that technology is moving too fast, whilst our education system lags behind. Yet these explanations are lacking in corroborating evidence and proposed solutions are ineffective. So unfortunately, this deadlock prevails.

Cedefop’s European Skills and Jobs Survey 20181 revealed that four in ten EU employers had difficulty finding people with the right skills. Yet despite these concerns of an increasing skill shortage, the survey exposed that approximately 39% of adult EU employees are over-skilled and trapped in low quality jobs. Employers are struggling to find people with the specific skill sets they require. Job seekers are investing years in education only to end up with few satisfying prospects. Workers are finding that they are more often than not failing to meet requirements listed in job advertisements.

This is a macro-level issue affecting national economies, closing doors on talented workers, stifling company growth and having a detrimental effect on the entire labour market. Nobody has answers for the people at the core of the issue – the job seekers and hiring companies. They need pragmatic solutions and they need them fast.

What is the root cause of the problem?

The assumption is that our problem stems from insufficient job market input or resources. However, new insights present a fresh perspective – the LiveCareer’s Skills Gap report2 carried out in 2018 suggests that the problem lies in the behaviour of key market players.

CVs (or resumes) and job advertisements are the tools through which the labour market communicates – they form the basis of interactions in HR and recruiting. There is a misalignment between how job seekers are communicating their skills in their CV and how employers are advertising the skills they require in their job specifications. This means that friction is created as soon as job seekers and employers engage – they start off already on separate tracks. And the tracks diverge further and further apart.  In desperation, job seekers bulk send CVs to organisations and employers succumb to screening bias amidst the flood of incoming CVs. Neither party ends up happy, and no amount of policy reform, education initiatives or technology training will resolve this.

Let’s take a closer look at the research:

” We took a “big data” approach to analyzing
thousands of resumes and job ads across 12 different occupations.

In total, these occupations represent nearly one-quarter of the workforce
in the United States.” 

LiveCareer  (2018) Bridging the Skills Gap 2

Thousands of CVs and job adverts across 12 different occupations were analysed using a Natural Language Processing tool to compare required skills listed in job ads vs skills offered in job seekers CVs.

One of the most remarkable insights is that job seekers are specifying far too few skills on their CVs. This significant mismatch in the number of skills listed is evidenced in the report which indicated that job ads contain on average of 21.8 skills, whereas CVs only list an average of 13 skills.

There is a clear gap between the most valued skills from each side’s perspective as evidenced by the study – job seekers’ CVs only match 59% of hard skills and 62% of soft skills in job ads. 

Hard skills are mentioned more frequently in job advertisements across all industries – an average of 16.7 hard skills are found in job ads versus an average of 5.2 soft skills.

However, despite this, 3 out of the 4 skills most often mentioned in job advertisements are soft skills – Customer Service (13% of total top 20 skill occurrences), Communication Skills, (8,9%), and Written Communication (8.3%). These 3 soft skills account for 30% of the top 20 most frequently mentioned skills. 

A key takeaway from this is for employers across all industries not to underestimate the significance of soft skills during their candidate selection process. This corroborates research carried out by Harvard University, the Carnegie Foundation and Stanford Research Center which found that 85% of job success correlates to well-developed soft skills, compared to 15% from hard-skills.3

What are the actionable insights?

Firstly, job seekers must work on matching their skills to those listed in job advertisements (assuming they have these skills).  For soft skills, job seekers must find better ways to articulate these in a way that resonates with employers and subsequently, in interviews.

In parallel, employers must be wary of relying on automated keyword-matching software to screen candidates, as according to the data, they will most likely not find enough ‘qualified candidates’ and the perfect candidate might slip through the defined algorithms. Instead, employers should implement efficient processes for screening CVs and utilize technology to enable more effective evaluation of CVs. For example the Allsorter.com platform enables recruiters to format CVs to highlight key skills and competencies. This ensures that CVs are all standardised allowing for efficient and optimum comparison, in addition to eliminating any selection bias.