the Labour Market Survey Report - Council of European ...

5. Estimating Skill Shortages
Even where industrial structure is only changing slowly, employers of IT Practitioners rarely find it easy
to articulate their current and (particularly) future skill needs very precisely. These needs can in principle
be fulfilled from within their own staff (the shortfall of skills within employers’ existing staff is termed
– in the UK - “skills gaps”), or by recruiting new people (buying in people from the available supply in
the external labour market – generally problems in finding the “right” people in this way are referred to
as skill shortages).
Furthermore, employers may not be able – or may choose not – to afford the necessary action to reduce
their problems in this area. Trying to measure such shortages of supply in a labour market has a number
of difficulties, and trying to predict how such shortages will develop in the future is increasingly hard,
particularly in a time of continuing change of work practices. There are thus fundamental limitations in
both identifying skill shortages in existing labour markets and in forecasting their development in the
future. These need to be considered separately.
5.1 Possible Approaches
a) Estimating skill shortages in relation to labour stock levels (numbers in employment) is not easy.
Generally, researchers view estimates of grossed up samples of Employers’ reported “Hard-tofill
vacancies” as the least unsatisfactory indicator of recruitment difficulties – i.e. shortages of
supply in the market-place. However, labour markets contain a number of additional complexities
beyond the operation of product or service markets, including the problem of “churn”*.
b) Estimating skill shortages from the growth of economic/business activity that produces a
growing demand for labour is a risky business. In essence, very few forecasts can be shown to
have been fulfilled, and indeed general macro economic modelling is often now not to be used
directly in forecasting (Smith, 1998).
A helpful review from the European Science and Technology Observatory of the different aspects of
forecasting in relation to high technology skills more broadly is given in Ekeland and Tomlinson (2001):
the study examines the relevant labour markets in terms of stock/flow indicators for both relevant
sectors (NACE) and occupation (ISCO).
The prevailing approach is generally to estimate skills demand levels from a productivity factor applied
to business activity levels arising from assumed economic growth in a sector.
5.2 Existing Estimates for the European Union
The two significant sets of estimated levels and forecasts for IT practitioners within Europe recently
carried out are those by IDC (in particular through the 2001 European IT Observatory – EITO - Report)
and an analysis carried out for the Career-Space industry consortium (drawing in particular on work
carried out within IBM United Kingdom).
* where – at a time of very high shortage – employees frequently leave their current employer to earn more at another.
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| C E P I S I.T. PRACTITIONER SKILLS IN EUROPE | Section 5