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This publication focuses on a topic of critical concern for policy-makers in recent years: skill mismatch. Cedefop has been active in skill mismatch research and analysis for almost a decade now, identifying significant areas of concern and contention surrounding the issue, including clarification of key concepts. It has also engaged in original data collection and analysis, resulting in several publications. Most prominently, in spring 2014 Cedefop undertook the first European skills and jobs survey (ESJS), a large-scale primary data collection of about 49 000 adult employees in 28 EU Member States. This report summarises many of the insights gained by closer empirical scrutiny of this new European data set. We focus on skill mismatch because the economic crisis, with its mass destruction of jobs in some sectors, was associated with a significant decline in employment for individuals with lower qualifications and skills. The average duration of unemployment was extended and long-term unemployment, primarily comprising the lower-educated, expanded to a wide range of employees at all levels. In some EU countries traditional modes of production and business models have been disrupted greatly. Research revealed that these growing labour market imbalances have seeped into higher structural unemployment rates, with the consequence of exacerbated concern that skill mismatch is worsening in the EU. Shifts in skill demand and supply have been reflected in the stated inability of employers to fill their vacancies with people that have the right skills. Data repeated by several sources indicated that four in 10 EU employers said in 2013 that they have difficulty finding the right skills when recruiting. When looking to the future, further concern arises that Europe may be unprepared for the evolution of a new digitalised economic reality. For example, Cedefop's European skills forecasting model projects that by 2025 about 48% of all job opportunities in Europe will need to be filled by individuals with tertiary-level qualifications. The ESJS also shows that about 85% of all EU jobs need at least a basic digital skills level. It is visible, even to the untrained eye, that unripe technological advances, such as machine learning, big data analytics, the internet of things and advanced robotics, together with restructuring in global value chains, are reshaping the world of work as we know it today. Existing research on skill mismatch has revealed that there are sizeable differences in the magnitude and economic costs of the many different types of skill mismatch. One-size-fits-all policies are unlikely to be effective as EU countries tend to suffer from different forms of the problem but it is clear that undertaking policies to reduce skill mismatch can result in sizeable efficiency gains. A Cedefop estimate, based on the ESJS, has shown that the existing skills of the EU's workforce fall about one fifth short of what is needed for workers to carry out their jobs at their highest productivity level. This calls for concerted action to stimulate further adult learning in Europe.
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