Maja Ochojska, Iván Bornacelly & El Iza Mohamedou, OECD Centre for Skills
Young adults today are the most educated generation ever. Compared to their parents and grandparents, more young people complete secondary and tertiary education than past decades. But this increase in global educational attainment is not matched by greater job satisfaction. Unprecedented levels of anxiety and worker disengagement are regularly reported in surveys. And this unhappiness in the jobs market contributes to burnout, high turnover rates, and reduced productivity. Some 16% of young people are not employed, in education or training across the OECD.
This has a knock-on effect on jobs; essential sectors such as healthcare and tech struggle to recruit. Globally, the World Health Organization projects a shortfall of 10 million healthcare workers by 2030, while the U.S tech industry alone has over 1 million unfilled jobs. COVID-19 exacerbated significant job and wage losses, especially for young people. By 2022, the youth employment rate in over half of OECD countries was still below pre-crisis levels by an average of 2.2 percentage points.
This, coupled with the shift towards remote work and a jobs market rapidly changing due to technology, has motivated many employers to make the shift towards a skills-first approach, or implementing recruitment practices to prioritise an individual’s actual skills rather than how they were acquired.
A skills-first approach to address job shortages
This involves spending more time screening, assessing, and validating skills rather than relying on institutional prestige or professional networks, which often unduly influence hiring decisions. Large corporations such as IBM and Walmart are already leading the charge by utilising skills-based hiring and developing internal training programmes. Smaller businesses have also cultivated connections with local training providers to inform course offerings and help students enter the workplace.
Part of this involves recognising that young people now engage in alternative learning activities, such as online courses or volunteering, to gain or boost their skill sets. Micro-credentials have also become a popular method to validate the skills individuals possess. The validation of skills acquired through a range of pathways and prioritising what job candidates can do, can help address job shortages.
Young people should also reflect on their skills and learn to signal them effectively. A skills-based resume can draw attention to their capabilities and accomplishments rather than just past job titles. The use of digital platforms to showcase work can also further demonstrate skills and expertise. Young people who face systemic barriers to gaining educational or professional qualifications, such as high tuition costs and biases in hiring practices, are likely to have acquired skills through alternative routes, which they can showcase through innovative forms of skills signalling. This, together with embracing skills-first recruitment policies, can not only serve as a powerful antidote to entrenched inequalities but help foster workplace diversity and innovation.
Pioneers in skills development
In addition, a skills-first ethos must be adopted across training, recruitment, and skills validation practices. This requires cooperation among training providers, employers, and governments. Amidst this backdrop, pioneers have already crafted initiatives to help guide pathways into the workplace. For example, Nodo, a training centre at the Universidad EAFIT in Medellín, Colombia, now offers flexible, stackable credentials catered to students keen to break into tech and AI-industries. It blends hands-on learning and specific course subjects with initiatives to connect graduates with prospective employers.
Governments also play a crucial role, in particular by enhancing communication between education providers, employers, and individuals. Singapore’s MySkillsFuture platform, for instance, assesses skill sets, tailors resources and provides certificates to validate student learning for employers. Public sector authorities have also tried to enable smoother classroom-to-workplace transitions within local communities, such as the skills-based hiring program launched by the U.S. State of Maryland, local community colleges, and the education non-profit Opportunity@Work. As many as 18 U.S. states have implemented skills-based hiring and skills-first development practices within their own hiring processes.
These initiatives are all pointing in the right direction, but more work needs to be done. At the OECD, we are working on analysing the impact of skills-first approaches in the labour market, identifying and putting forward strategies that have the potential to transform youth employment and foster a resilient and innovative future. By unlocking young adults’ potential, we can cultivate a more fulfilled, engaged, and productive workforce.
