A skills deficiency primer: the difference between a skills shortage and a skills gap

Friday, July 20, 2012
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As part of our research program, we recently reviewed the concepts of a skills shortage and a skills gap in 10 national employer skills surveys to bring some clarity to the concepts. With the increasing attention of the media on a growing “skills gap” in many countries, it is important that we start speaking in correct terminology. A multicountry, practice-based review of employer surveys, shown in Figure 1, reveals a distinction between skillsdeficiencies found in the external labor market (‘skills shortages’)and those applicable to a firm’s existing workforce (‘skills gaps’).

Previous employer surveys conducted primarily in the UK define a skills shortage as an expressed difficulty in recruiting individuals from the external labor market under current market conditions with a particular skill set due a low number of applicants caused by least one of the following reasons: lack of required skills; lack of work experience a company demands; or lack of qualifications a company demands (Shah and Burke 2003; Paterson, Visser et al. 2008; Education Analytical Services 2010; Shury, Winterbotham et al. 2010). Because skills shortages apply to the external labor market while skills gaps apply internally to the firm, these survey approaches imply the two concepts of a skills shortage and a skills gap are separate and distinct phenomena. This analysis will retain the same distinction and primarily concern the latter phenomenon of a skills gap in an attempt to arrive at a comprehensive, integrated definition of the explanadum that is rooted in previous literature.

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