Some mismatches are fun and harmless—like when someone wears two different over-the-top socks to show their playful side. But then some have adverse effects on social and economic outcomes—like when companies fill job positions with the wrong people.
The latter, known as a skill mismatch, occurs when an employee has competencies that either exceed or are insufficient for the job tasks they perform. And it’s a scenario that leaves workers feeling uncertain about their income and career development and companies facing lower productivity, compromised work quality, and profit loss.
Skill Mismatch Types
Skill mismatch is a broad term that relates to various forms of imbalance in the labor market, including horizontal mismatches, vertical mismatches, and skills obsolescence.
Also known as a field of study mismatch, a horizontal mismatch is when someone works in an occupation that differs from what they studied in college. For example, you have a marketing degree but are working as a journalist.
With this kind of mismatch, someone has a level of education or skill above or below the job requirement. Consider the underqualified individual who is working in management but has no leadership skills. Or the overqualified individual who holds a landscape architecture degree but is mowing lawns.
While skill obsolescence comes in many forms, it essentially marks a depreciation of skills due to a physical or knowledge deficit. And the risk of skill obsolescence is higher for older workers.
Individuals who rely on physical strength to carry out their job responsibilities can experience obsolescence because of an injury or aging. Furthermore, studies show that training intensity decreases as workers age. So, when an employee fails to keep up with technology advancements, they can lose relevance in their job.
Changes and developments in the marketplace can also cause skill obsolescence. For instance, if employment in an occupation starts to shrink, employees are sometimes forced to find new lines of work.
According to a Robert Half Finance and Accounting survey of chief financial officers, the most common reason they said new hires don’t work out is due to a skill mismatch. Furthermore, a CareerBuilder employer survey found that nearly three in four respondents said they hired the wrong person for a position.
Depending on the position, a bad hire can cost a company anywhere from $5,000 to $15,000. A study performed by the Center for American Progress found that for employees earning less than $50,000 a year—which is three-quarters of all workers in the United States—the typical turnover cost is 20% of their annual salary. In other words, it costs $8,000 to fill a management role that pays $40,000 a year.
Boston Consulting Group (BCG) research shows that more than 1.3 billion people globally work in jobs they’re overqualified or underqualified for. And according to BCG, the skill mismatch takes a heavy toll on the world economy. In 2018, the world economy lost $8 trillion in unrealized GDP—what BCG considers a 6% productivity loss or tax.
Skill mismatches exist for several reasons, with these being some common causes:
• When job postings poorly describe the requirements of a position.
• When companies fail to identify skill mismatches during the hiring process.
• When technology advancements and market developments make skills obsolete.
• When experienced workers in highly specialized fields start retiring.
5 Ways to Stop Skill Mismatches
Finding the right fit for a position isn’t easy. However, there are things you, as an employer, can do during the pre-hiring and post-hiring process to avoid and fix skill mismatches within your company.
1. Look Beyond College Degrees
While college degrees are essential for many positions, companies have gotten into the habit of requiring degrees for jobs that previously didn’t need them. And it’s a practice that has contributed to the skill mismatches, skills gaps, and worker shortages that many businesses face today. After all, job competency and academic credentials don’t always go hand in hand. So, when hiring for a position, employers need to look beyond college degrees and focus on skill sets.
2. Develop Better Job Postings
Your job description is what guides the hiring process, and it’s your first line of defense against a skill mismatch. Therefore, it must be clear, precise, and thorough. You should use commonly understood language throughout and avoid ambiguous details and company jargon.
It helps to describe the education, skills, and experience relevant to the position using the mandatory-to-preferred scale. And when it comes to listing out responsibilities and requirements, you want to be as explicit as possible.
Consider the level of knowledge and skills someone needs to perform the job effectively. Try thinking in terms of: Does the position require the person to be proficient in specific computer software? Does the person need to understand certain compliance standards? What specific tools will the person need to know how to use?
3. Do Pre-Employment Screenings
Most people tell a little fib or two when trying to land a job, which isn’t necessarily a big deal. However, it’s a big deal when applicants exaggerate their skills or lie about their experience. In 2019, the University of Guelph conducted a study where 100% of the participants told researchers they would use some form of deception or stretch the truth in a job interview.
To help prevent this from happening to you, your company can have job applicants take a relevant skills assessment test—this is your second line of defense against a skill mismatch. Plus, you can use the test results to help rank your potential candidates.
4. Ask the Right Interview Questions
Job interviews are your third line of defense against a skill mismatch. Before meeting with a candidate, think about what job-specific questions you could ask to gauge their knowledge and experience level. It also helps to ask situational questions to get an overall sense of how they behave in the workplace. For example, if you’re hiring a CNC machinist, you could ask the applicant what they would do if a machine broke down on a job with a quick turnaround time.
5. Implement a Skills Training Program
If a skill mismatch slips through the hiring cracks or an existing employee lacks a skill set, the best thing your company can do is bring a short-term, competency-based skills training program into the organization. Furthermore, if your company has open positions but lacks qualified job seekers, investing in a training program can help you create a skilled workforce.
Community Colleges and the Skill Mismatch
When it comes to local employment and workforce development, community colleges are well suited to play matchmakers for the individuals and employers they serve. But to make the connection between the two, community colleges must make short-term skills training an integral part of their educational offerings. By doing so, they can combat the skill mismatches in their respective communities, increase their enrollment, and boost the local economy.
Skills Training for Skill Mismatches
The 180 Skills online skills training platform is equipped to take on the many challenges caused by skill mismatches. Housing nearly 800 skills courses and several industry-recognized certification programs, our platform covers competencies that individuals of all skill levels need to be effective at work. Our skills courses fall into one of the following four categories:
- Technical skills
- Workplace & soft skills
- Risk management & compliance skills
- Quality & continuous improvement skills
Our self-paced, highly interactive, high-quality content can be absorbed by any learner. And we ensure skills mastery by closing each skills course with an assessment that requires a perfect score for completion.
Want to know more? Contact us today!