Over the last year it has been hard to avoid articles with headlines warning business and technology leaders about the skills gap and its impact on the UK economy and CIO UK has detailed the issue in our own sector.
The American Society for Training and Development defines a skills gap as the point at which an organisation stops growing, or cannot execute on its strategy, because it cannot attract new employees with the required skills, or it fails to retain the skills it has in-house.
When one thinks of a gap it conjures up an image of something that can be measured. So a logical question is: can the skills gap be measured?
It can. To calculate the measurement I rely on an economic maxim known as the Beveridge Curve, named after British economist William Beveridge. The Beveridge Curve plots an elegant sloping line based on two pieces of data: a country’s overall unemployment rate and the number of open job vacancies in the country. According to William Beveridge, as national unemployment rates rise and remains high the number of open job vacancies drops and remains low. Why? Because in times of high unemployment organisations are not keen on hiring new workers, or they see no economic need to advertise vacant jobs because prospective new employees are lining up outside their doors.
In June 2009 the UK unemployment rate was 7.9 per cent and there were 432,000 open job postings. Four years later, the UK’s unemployment rate remains stuck at 7.8 per cent. But the number of open job vacancies has risen 15 per cent to 495,000 open posts even as 2.5 million people remain unemployed. That employment anomaly should not happen according to William Beveridge. I call that open job vacancy enigma to the U.K Beveridge Curve a skills gap. The more job vacancies there are in a country the wider the skills gap. According to a report from the Federal Reserve Bank of San Francisco, scores of countries around the world are feeling the pain of Beveridge Curve skills gap.
As I spent six years researching and writing, The US Technology Skills Gap, I read many reports affixing blame for the creation of the skills gap. Some blamed politicians. Others said its result of employers being too selective in hiring new workers, often posting job descriptions that run on for 500 words or more! Some said the gap widened because employers were looking for “purple squirrels or pink unicorns”, aka the ideal worker, and were reluctant to offer any semblance of on-the-job training and development. Incredibly, there are even some, mostly economists and academics, who claim the existence of skills gap is a myth and made up out of thin air.
The global skills gap is real. And while I believe each of those groups contribute in some way to form a nation’s skills gap, the primary antagonist in developed countries like the UK and the US is the stark, out-of-touch-with-reality structure of national public education policy.
Since 2000, the Organization for Economic Co-operation and Development (OECD), an international non-profit, has fielded every three years a reading, math and science proficiency examination called Programme for International Student Assessment (PISA). For countries participating in PISA, the examination is a pivotal benchmark because of its focus on the skills of 15-year old students. These students have spent 16-years in their country’s education system and will become workers within three years.
Here are the comparisons for UK students between the 2006 and 2009 PISA tests (the 2012 results will be available later this year). The trend line in the comparison should cause concern among business, IT and government leaders in the United Kingdom.
Subject U.K. Place in 2006 U.K. Place in 2009
Reading 17th place 26th place
Mathematics 24th place 28th place
Science 14th place 16th place
Source: OECD, PISA results 2006 and 2009
(Note: in the spirit of full disclosure, the results for the United States in the 2009 PISA examination are worst with American students placing 31st in mathematics, 23rd in science and 17th in reading.
For astute business and political leaders in the UK, the 2009 math, science and reading results should come as no surprise. For over a decade, the highly respected World Economic Forum has annually fielded a Global Competitiveness Report that meticulously ranks 134 countries in 110 economic, financial, social and political areas.
Two of those evaluation areas are: overall quality of the educational system and overall quality of math and science education. The table below shows where the UK, a country that invests £154,000,000,000 on public education, ranks in those important criteria among 134 other countries (included for comparison is the ranking for the United States, which annually spends nearly $600,000,000,000).
Criteria U.K Ranking U.S.Ranking
Quality of education system 27th 28th
Quality of math/science education 42nd 47th
Source: World Economic Forum Global Competitiveness Report 2013
The challenge of “fixing” a country’s national education skills gap is daunting. There are just so many chefs in the kitchen of systemic educational reform. My review of the education rankings for the UK and the US, two powerhouse countries with very similar education infrastructures, one thing is apparent: throwing money at the problem is not working.
In my book “The U.S.Technology Skills Gap” I make several recommendations to technology executives on ideas that might work.
Build as a core component into your national plan for growth a strategic imperative to proactively hire only the brightest university graduates to be teachers. As American business executive Lee Iacocca once said, “in a purely rational society the best of us would be teachers and the rest of us would have to find something else to do.” South Korea reveres teachers and pays them well. Many starting teacher salaries in that country start at £42,000.
A big challenge in the United States is that 50 per cent of the country’s math and science teachers, teach those subjects yet have no university degree in science, technology, engineering or mathematics.
Innovative companies like IBM and its landmark Transition to Teaching program proactively encourage workers with undergraduate degrees in science, technology, engineering and math to consider second careers as science and maths teachers. There must be tens of thousands of IT workers in the UK with undergraduate technology degrees who could be recruited to new careers as teachers.
Unfortunately the perception for many young people in the UK, especially young women, is that science and maths are hard subjects to learn and not particularly relevant to their lives. But, you, the CIO, knows that is so untrue. What would be the impact on the United Kingdom if every reader of this column called the local school and offered your advisory/mentoring services to young British students interested in tech careers?
To end on a positive note, the same 2013 World Economic Forum Global Competitiveness Report did report something is very much working in the United Kingdom. When the global recession began in 2008 the United Kingdom was ranked the 14th most competitive country in the world. By 2013, the U.K. climbed all the way to being seventh.
To continue the climb up the World Economic Forum list, leaders in the UK must rethink its education policy that is world class in teaching the basics of science and maths, the cornerstones of an inventive, innovative economy.
About the author: Gary J. Beach is publisher emeritus of CIO Magazine and author of The U.S.Technology Skills Gap: What Every IT Executive Needs to Know to Save America’s Future.