institute for employment studies

publications by IES authors

Job Matching in the UK and Europe

Bevan S, Cowling M
Research Report RR25, Sector Skills Development Agency, July 2007

a study commissioned by the Sector Skills Development Agency

This study was commissioned by the Sector Skills Development Agency to help inform the evidence base on which its policies and activities are based. It seeks to explore how well the skills of workers meet the demands of their jobs in UK and Europe, and what factors lie behind this.

What is the Purpose of this Study?

This study has examined the job matching issue from two perspectives. The first is the viewpoint of employees, derived from the European Working Conditions Survey, conducted in 1996 and 2000. Using a self-report measure of job matching, we have been able, using univariate statistics and multinomial analysis, to examine the following questions:

• What is the extent of job-skills mismatches amongst those in work in the UK labour market?
• How has this varied across EU countries and across time?
• What types of workers are most likely to be mismatched to their jobs?
• Are job-skills mismatches associated with lower levels of training?
• Are firms training the ‘wrong’ workers (i.e. those who do not need the training in order to fill the job requirements, rather than those who lack the skills required to do their jobs)?

Second, and drawing on our empirical findings, we have conducted qualitative research in four organisations in the UK which employ some of the workers we have identified as most likely to experience job-skills mismatches to explore in finer detail why, and how, this occurs.

Job Skills Matching in the EU-15

The overall rate of job matching in the EU-15 increased slightly from 84% in 1996 to 85% by 2000, however the UK had the lowest rate of job matching in the EU-15 in both periods. The UK’s performance improved (from 77% job matching in 1996 to 80% in 2000 of the EU average) although not at a rate fast enough to eliminate the deficit.

Of those who reported that their skills did not match the demands of their job, 7% of EU workers said the demands of their job was too high for their skill levels (under-skilled) and a further 7% said that they possessed more skills than demanded by their job (over-skilled) across the EU-15. While the rate for under-skilling was little changed since 1996, there had been a decline in over-skilling and hence a corresponding improvement in job-matching.

In 2000, while the UK reported the lowest rate of job-matching, the highest rate was in Denmark at 92%. Under-skilling was most prevalent in France (12% of employees) and least in Finland (3%). In the UK, 11% of employees reported they were under-skilled. Over-skilling was most prevalent in the Netherlands (12%) and least in France (5%) and in the UK the rate was 8%.

Job Skills Matching in the UK

Women report slightly higher levels of job-skills matching than men in the UK. Older workers are slightly more likely to consider themselves under-skilled than over-skilled (this is borne out in multi-variate analysis of the data for women), in contrast to younger workers who hold the opposing view. This is interesting and suggests a need for continuing training for workers of all ages to ensure they remain fully able to cope with the demands of their job. It also suggests that many younger workers start their careers by doing jobs not fully commensurate with their skills, but grow into this as their careers develop.

By sector, in 2000, the highest rate of job matching is in the Construction sector and the lowest in Transport and Communications, although the variation is just 6 percentage points. The Transport and Communications sector had the highest rate of under-skilling and Retail and Wholesale the lowest. Hotels and Catering had the highest rates of over-skilling and Construction the lowest.

Employees in Plant and machine operative occupations were least likely to report skills which matched the demands of their job (76%) and, correspondingly, most likely to be under-skilled (17%). Employees in Unskilled/elementary occupations were least likely to be under-skilled (6%) and most likely to be over-skilled (14%).

Longer job tenure is associated with better job matching, the implication being that both employer and employee deploy processes to ensure better matching of skills to jobs, whether through training or job enhancement/promotion. However, the survey data also suggest that job tenure can be associated with higher levels of under-skilling among some employees – and is consistent with earlier findings on age with the same implications for policy.

The incidence of training declines as we progress from under-skilled, to matched, to over-skilled workers. Yet in 2000, 42 per cent of under-skilled workers received no training. In addition, 40 per cent of over-skilled workers did receive training. There was no evidence that training led to over-skilling, however.

Emerging Issues

We conducted qualitative research in four businesses which has illustrated a variety of employer practices which can either perpetuate or eliminate job-skill mismatches. For the most part, the steps taken by employers to improve job matching seem mostly reactive and tactical rather than proactive and strategic. Changes in the nature of skill demand are often dictated by labour market constraints or by market pressures. There appears to be very little workforce planning activity linked to business planning, nor do many organisations seem to be engaging in wholesale skill audits.

In the context of job matching, it is possible to categorise the approaches which employers are taking to resourcing and performance management in the following ways.

1. ‘Credentialism’: The recruitment of workers with higher than necessary qualifications out of a mistaken belief that the best qualified are the best matched. This approach drives over-skilling and can lead to high levels of employee dissatisfaction and attrition.
2. The ‘Magnet’ Employer: The use of an attractive employer ‘brand’ to attract better qualified employees than is strictly necessary as part of a deliberate strategy to have ‘the pick’ of the labour market.
3. The ‘Bounded Job’ Model: The recruitment of employees into narrowly defined jobs which are, effectively, de-skilled or whose boundaries limit discretion and autonomy. These approaches may exist in organisations where cost control is important, where technology allows jobs to be highly routinised, where Trades Unions influence the amount of job flexibility allowed, or where a ‘command and control’ culture exists. The use of this model can lead to under-utilisation of skills, i.e. over-skilling.
4. The ‘Low Demand’ Model: as suggested by writers such as Keep & Mayhew (2004), organisations who resource themselves with low wage and low skill employees because consistent consumer demand for low quality products and services means that this is a viable business model. This also reflects both an organisational culture and labour market conditions where there is no penalty for under-skilling.

These examples illustrate that at least a proportion of the job-skill mismatches identified by surveys and other data can be explained by the resourcing practices adopted by employers. Some of their practices are deliberate responses to market pressures, others have come about as a result of custom and practice or inertia.

Conclusions

Based both on our survey and qualitative findings, it is possible to reach the following conclusions:

1. There are still parts of the economy where there remain pockets of over-skilling and under-skilling and that these can impede labour utilisation and, ultimately, labour productivity growth. They also threaten the salary progression, career and skill development opportunities of a proportion of the workforce, as well as their sense of fulfilment in their work.
2. However, there is no room for complacency as many of our EU partners have a better record than the UK and some of them have improved their rates of job skills matching even more impressively than us.
3. Although there are sound arguments for the supply-side causes of job mismatches, the demand-side causes are often underplayed and poorly understood.
4. We conclude that active and targeted training activity by employers can reduce job mismatches. Our data supports the view that training intensity is highest where under-skilling is most prevalent and that there is little evidence that training leads to over-skilling. Our qualitative research also shows how training can improve job matching.
5. In addition, it is also clear that sometimes subtle (and not necessarily radical) changes to the way work is organised and jobs designed can also offer opportunities to re-align the skills of the workforce with the demands of the firm and its customers. This can sometimes require a crisis, strategic vision and the willingness to take a risk by changing traditional approaches to designing work.

Further Research

This study has focused on data collected at two points in time and based on employees’ self-reports. While the results shed considerable light on many aspects of the job skill matching issue, these aspects of the methodology are also inherently limiting. Future studies should seek to collect data over longer time periods and rely less on self-reported data. In addition, while our qualitative data has helped us to understand better the approaches to resourcing, performance management and training being adopted by organisations in an effort to maximise job matching, further work which examines the perceptions and roles of individual employees in this process would also be useful.

Job Matching in the UK and Europe, Bevan S, Cowling M. Research Report RR25, Sector Skills Development Agency, 2007.
ISBN: (no ISBN). Bound copy: £free

• How to obtain this publication