The mismatching of skills is a big problem in the European Union. It costs the bloc’s economy at least 2% of productivity per year, according to a recent study commissioned by the European Economic and Social Committee.

This means a loss of 80 cents for each hour of work. Worse still is that the situation is not expected to improve due to demographic trends and ongoing technological developments.

According to the!dM96Ft (study), companies in most of the EU’s Member States are witnessing a growing shortage of workers with skills tailored to their needs. In some occupations, such as ICT professionals, medical doctors, and science, technology, engineering and mathematics (STEM) professionals, as well as teachers, nurses and midwifes, the impact on the economy is already significant. Moreover, there is also a noticeable shortage of intermediate-level skilled occupations, such as truck drivers, cooks and welders.

The way skills mismatches affect European companies includes additional spending on employee training, loss of competitiveness and innovation capacity and slower recruitment processes. Over 70% of companies engaged in professional, scientific or technical services and 67% of ICT companies admitted that skills mismatches have a serious effect on their human resources policies.

The study, which was prepared by the Institute for Market Economics (IME) at the request of the Employers’ Group of the European Economic and Social Committee, found that the companies of five reference countries surveyed pointed to insufficient traditions in lifelong learning and (re)qualification as being the most significant factor in skills mismatches. People aged under 24 and over 65 are the most exposed to these mismatches.

The only solution is for efficient and more popular vocational education and training (VET) practices and greater emphasis on lifelong learning and effective labour intermediation. It is also important to improve skills evaluation to help identify in advance the skills to be needed on future labour markets.