Chapter 3. Reducing skills imbalances

The chapter presents diagnostic evidence on skills imbalances in Flanders, the factors that affect skills imbalances and specific policies and practices to reduce skills imbalances. Flanders can reduce skills imbalances by taking action in six areas. These are: 1) ensuring that the education system is responsive to labour market needs; 2) improving information about current and future skills needs; 3) integrating career and training guidance services; 4) making skills visible; 5) promoting labour mobility; and 6) prioritising training in skills in high demand for jobseekers.

    

Introduction

Why reducing skills imbalances is important

A skills imbalance is a misalignment between the demand and supply of skills in an economy, and can comprise skills shortages, skills surpluses, and skills mismatches. Skills shortages refer to a disequilibrium condition in which the demand for a specific type of skill exceeds its supply in the labour market at the prevailing market wage rate (Junankar, 2009[1]). In the opposite case, when the supply exceeds demand, skills surpluses arise. Skills mismatch describes situations when a workers’ skills exceed (over-skilling) or fall short (under-skilling) of those required for the job under current market conditions (Shah and Burke, 2005[2]; OECD, 2017[3]). Mismatch can be measured along different dimensions, including skills, qualifications and field of study.

Skills imbalances are costly for individuals, firms and the economy. Skills mismatch has negative impacts for individuals, including a higher risk of unemployment, lower wages, lower job satisfaction and poorer career prospects. A study based on Flemish data found that the wages of over-educated youth are associated with a wage penalty of 5% per year of education that is not required for the job, compared to someone who is well-matched to their position (Verhaest and Omey, 2012[4])

For firms, the impact of skills mismatch is more ambiguous. Evidence from Belgium suggests that over-qualification can have a positive effect on firm productivity in certain working environments, for example: for firms in high-tech or knowledge-intensive industries, those with a higher share of high-skilled jobs and those evolving in more uncertain economic environments (Mahy et al., 2015[5]). However, evidence from other countries points to a negative impact of over-qualification on firm productivity (e.g. Tsang (1987[6])), possibly owing to high worker turnover and lower job satisfaction among employees. The effect of under-qualification on firm productivity is generally found to be negative. Field-of-study mismatch is usually only associated with a wage penalty when combined with qualification mismatch, for example, when workers must downgrade to a job with a lower educational requirement because they cannot find work in their field (Montt, 2015[7]). OECD evidence suggests that higher skills mismatch is associated with lower labour productivity through a misallocation of workers to jobs (Adalet McGowan and Andrews, 2015[8]).

Skills shortages increase hiring costs and lower productivity as vacancies remain unfilled for a longer period of time and firms substitute for less productive workers (Haskel and Martin, 1993[9]; Bennett and McGuinness, 2009[10]). Skills shortages also constrain the ability of firms to innovate and adopt new technologies, which can negatively influence their productivity.

Reducing skills imbalances has been identified as an important priority for Flanders. As part of its Vision 2050 priorities, Flanders puts an emphasis on skills and lifelong learning to ensure that “no talent remains unused in our society.” In January 2018, the Flemish Minister of Work signed an agreement with employer organisations to tackle labour market shortages (Pact tegen krapte op de arbeidsmarkt). The agreement set concrete commitments on the part of both government and employers, such as creating more work-based learning opportunities for jobseekers and improving skill-based matching.

Overview of chapter

This chapter presents available data on skills imbalances in Flanders, followed by a discussion of the factors that affect skills imbalances. It reviews relevant policies and practices from Flanders to address skills imbalances, as well as those from other countries that could be of interest to Flanders. The chapter concludes with a set of recommendations.

Skills imbalances in Flanders

A tight labour market in Flanders is leading to shortages in specific occupations and skills, particularly in science, technology, engineering and mathematics (STEM) occupations. Shortages are also evident in nursing and care giving, as well as in occupations such as chefs, truck drivers and accountants. Furthermore, there is a gap between the qualifications of jobseekers and those of wage earners, and the incidence of long-term unemployment remains high. On the other hand, in comparison to OECD countries, relatively few workers in Flanders are mismatched to their jobs on the basis of qualification or skills.

Skills shortages in Flanders are rising, and shortage pressure is most acute in some skills and occupations

The labour market in Flanders has been tightening since 2013, with the job vacancy rate rising from 2.6% to 3.7%, and the unemployment rate falling from 5.1% to 4.4%. The unemployment rate is among the lowest in the EU and OECD, and compares with 7.2% in Belgium as a whole (Figure 3.1). The job vacancy rate is higher in Flanders than any country in the EU, apart from the Czech Republic. Such tight labour market conditions can make it more difficult for employers to fill vacancies. Results from a national forecasting study suggest that demand for labour will continue to grow by 1.0% per year in Flanders between 2016 and 2030, which is higher than the national average of 0.9% per year (Agoria, 2018[11]).

Flemish employers are having difficulty hiring in some economic activities more than others (Figure 3.2). Occupations related to professional, technical and scientific activities have persistently high job vacancy rates, as do occupations in information and communications technology (ICT), and construction.

Figure 3.1. Job vacancy rate and unemployment rate, Flanders, other Belgian regions and OECD-EU countries, 2017
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Notes: 1. The job vacancy rates is the number of job vacancies divided by total labour demand (i.e. job vacancies plus occupied positions).

1. The job vacancy rate for France is only for firms with 10 employees or more.

Sources: Eurostat (2018[12]), Job vacancy rate by NACE Rev. 2 activity - annual data (from 2001 onwards) [jvs_a_rate_r2], https://ec.europa.eu/eurostat/cache/metadata/en/jvs_esms.htm; Statbel (2018[13]), Job vacancy rate, https://statbel.fgov.be/en/themes/work-training/labour-market/job-vacancy#figures; OECD (2018[14]), Regional Labour statistics, www.oecd.org/governance/regional-policy/regionalstatisticsandindicators.htm

 StatLink https://doi.org/10.1787/888933891547

Figure 3.2. Hiring difficulties have become a more significant issue in certain economic activities
Job vacancy rate for selected economic activities and total, Flanders, 2013 and 2017.
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Note: The job vacancy rate is the number of job vacancies divided by total labour demand (i.e. job vacancies plus occupied positions). Based on NACE Rev. 2 (Nomenclature générale des activités économiques dans les Communautés Européennes).

Source: Statbel (2018[13]), Job vacancy rate, https://statbel.fgov.be/en/themes/work-training/labour-market/job-vacancy#news.

 StatLink https://doi.org/10.1787/888933891566

The Flemish public employment service, VDAB, produces a list of bottleneck (i.e. shortage) occupations every year by combining quantitative information, such as vacancy rates and share of vacancies filled, with qualitative information from sector organisations and VDAB experts. Over the last 10 years, VDAB has observed persistent shortages in STEM occupations; both those requiring a secondary-level vocational degree (e.g. technicians, mechanics) as well as those requiring a tertiary degree in a technical direction (e.g. engineers, and site managers). Persistent shortages have also been observed among nurses and care givers, as well as chefs, truck drivers and accountants.

Shortages can also relate to skills, rather than occupations. The OECD Skills for Jobs database is an internationally-comparable index of skills in shortage and in surplus. The indicators are constructed using a multidimensional set of quantitative signals of skills pressure, including changes in wages, employment, hours worked and under-qualification, as well as unemployment rates. After first assessing shortage pressure at the occupational level, a mapping from occupation to skill (using the O*NET classification1) generates a profile of shortages and surpluses for various types of knowledge, abilities and skills. Looking at the profile for Flanders (Figure 3.3), the most acute shortages are in knowledge of health services, education and training, and mathematics and sciences. These skills shortages reflect the skills required by occupations in shortage, including STEM occupations and health and personal care occupations. There are also signs of smaller shortages in more transversal skills, such as basic skills (literacy and numeracy), social skills, systems skills, complex problem solving and reasoning abilities. While the intensity of skills shortages is low in Flanders compared with other countries in the database, resolving these imbalances still represents an important challenge for Flanders as a means to support productivity and sustainable employment.

Consistent with declines in the manufacturing sector and a global decrease in the share of employment in routine-intensive occupations (OECD, 2017[3]), surpluses are evident in knowledge of manufacturing and production, control movement abilities, precision time and speed abilities and fine manipulation abilities. Surpluses are also evident in knowledge of engineering and technology and technical skills, which are caused by surpluses in trades occupations (i.e. machinery, metal and related trades, electrical and electronic trades, building and related trades). These all make heavy use of one of the sub-components of this type of knowledge, i.e. mechanical knowledge2.

At the same time, there are shortages in several occupations that require knowledge of engineering and technology (e.g. science and engineering professionals and associate professionals, ICT professionals, ICT technicians). Former trades workers who are now unemployed or who would like to improve their employment situation could, in principle, be deployed to shortage occupations which use knowledge of engineering and technology, although they would require significant upskilling, particularly in programming, knowledge of computers and electronics, written expression, and reading comprehension.

Figure 3.3. Skills shortage and surplus, Flanders, 2016
Skills Needs Indicator
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Note: Positive values indicate shortages while negative values indicate surpluses. An indicator value of +1 represents the maximum value across countries in the database, while a value of -1 represents the lowest value.

Source: OECD (2018[15]), Skills for Jobs database, www.oecdskillsforjobsdatabase.org

 StatLink https://doi.org/10.1787/888933891585

Skills mismatch is low in Flanders

The OECD Skills for Jobs database shows that 10.2% of the Flemish workforce was over-qualified for their job in 2016, substantially lower than the OECD country average of 16.8% (Figure 3.4). Only 28.7% of workers were employed in an occupation outside their field of study, putting Flanders below the OECD average for field-of-study mismatch (32.2%) (Figure 3.4).

According to the Survey of Adult Skills (PIAAC), only 7.8% of Flemish workers were found to have literacy skills that were higher than those required by their job in 2012, which is below the OECD (PIAAC) average of 10.1%.

A comparatively small share of workers, therefore, are mismatched in Flanders on the basis of qualification or skills. Going forward, and in the context of changing demand for skills arising due to technological change, globalisation and population ageing, Flanders should position itself to maintain this low (or even lower) level of mismatch. The OECD estimates that improving allocative efficiency by reducing skills mismatches to the lowest level of the OECD could increase economy-wide productivity gains by about 2.6% in Flanders (Adalet McGowan and Andrews, 2015[8]).

Figure 3.4. Qualification and field-of-study mismatch, Flanders and selected OECD countries
Share of mismatched workers, 2016
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Note: Most recent year available for each country. Data for Flanders are for 2016. Field-of-study mismatch is calculated for all countries at the 2-digit ISCO level.

Source: OECD (2018[15]), Skills for Jobs database, www.oecdskillsforjobsdatabase.org

 StatLink https://doi.org/10.1787/888933891604

Despite a tight labour market, long-term unemployment remains high

While Flanders faces a tight labour market, the incidence of long-term unemployment remains relatively high. As shown in Figure 3.5, 35.0% of unemployed workers in Flanders were unemployed for a year or longer in 2017, which is lower than the Belgium (50.0%) and EU (45.1%) averages, but higher than the OECD average (31.0%,), and much higher than Sweden (18.5%), Denmark (22.6%) and Finland (24.2%). In 2017, nearly half of all long-term unemployed in Flanders (47%) were low-qualified (i.e. no final diploma in secondary education).

Unemployed workers may remain unemployed because their skills do not match those that employers require. A recent analysis using the Eurostat Labour Force Survey finds that 31% of unemployed individuals in Flanders are low-qualified, compared to only 15% of wage earners (Pasgang, Vansteenkiste and Sels, 2018[16]). Similarly, only 26% of the unemployed are highly-qualified (i.e. final diploma from post-secondary education), compared to 43% of wage earners. Converting these differences in education shares between wage earners and jobseekers into a mismatch index (Figure 3.6) leads to the conclusion that while the education profile of the average unemployed worker in Flanders differs from that of the average wage earner, this misalignment is low relative to other regions in Belgium and relative to the EU average, and has been declining.

Figure 3.5. Elevated incidence of long-term unemployment
Share of unemployed who have been unemployed for at least a year, 2000-2017
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Sources: National Bank of Belgium (2018[17]), Long-term unemployment statistics, www.nbb.be/en/publications-and-research/employment-statistics-trends/labour-market/long-term-unemployment; OECD (2018[18]), Long-term unemployment rate (indicator), https://data.oecd.org/unemp/long-term-unemployment-rate.htm

 StatLink https://doi.org/10.1787/888933891623

Figure 3.6. Mismatch between the education profile of wage earners and that of jobseekers, Flanders and other Belgian regions, and selected countries (2011, 2016)
Sum of absolute differences between education level shares in employed and unemployed population
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Note: The education level of wage earners is compared with the education level of jobseekers. The authors distinguish between three levels of education: low-qualified (no final diploma in secondary education), middle-qualified (final diploma from secondary education) and highly-qualified (final diploma from higher education). The absolute differences in the shares per education level are summed to create an aggregate level of imbalance. A higher percentage corresponds to a higher imbalance between the education profile of wage earners and that of jobseekers.

Source: Pasgang, K., Vansteenkiste, S., & Sels, L. (2018[16]), Is there a strong qualitative mismatch in the Flemish labour market?, http://www.steunpuntwerk.be/node/3759.

 StatLink https://doi.org/10.1787/888933891642

Factors driving skills imbalances

Persistent skills shortages in certain STEM and technical occupations over the last 10 years, combined with a high incidence of long-term unemployment, suggests that the match between the skills in the labour supply and employers’ needs could be improved. There are a number of factors causing these skills imbalances.

Global trends such as technological change, globalisation, and population ageing have led to the emergence and expansion of some sectors and occupations while others have contracted. As a result, labour markets have become more polarised, with a rise in the share of employment in jobs at the top and bottom of the skills distribution over the last two decades. Meanwhile, the share of employment in middle-skill jobs has declined (Figure 3.7). These global trends contribute to skills imbalances, as workers who had previously been employed in middle-skill jobs requiring routine skills (e.g. manufacturing) do not necessarily have the skills needed to fulfil existing jobs, or jobs that are expected to become more important in the future.

Several papers have estimated the share of jobs likely to be automated in the coming decades. A recent OECD paper using findings from the Survey of Adult Skills (PIAAC) takes a task-based approach to this problem by accounting for the heterogeneity of workplace tasks within occupations (Nedelkoska and Quintini, 2018[19]). It finds that in Belgium, about 11% of jobs are at high risk of automation, meaning that they face a 70% or higher probability of being automated. This is on par with the OECD average. An additional 25% of jobs are found to be at significant risk of change due to automation, slightly below the OECD average (30%). With a total of 36% of jobs at significant or high risk of automation, workers will be under pressure to upskill and reskill to remain employable.

Figure 3.7. Labour market polarisation, Belgium and selected OECD countries, 1995-2015
Percentage point change in share of total employment
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Note: Data presented at the country level only.

Source: OECD (2017[20]), OECD Employment Outlook 2017, Figure 3.A1.1. Job polarisation by country, http://dx.doi.org/10.1787/888933477940.

 StatLink https://doi.org/10.1787/888933891661

In addition to global trends, the responsiveness of the education system to changing skills demand is another factor behind skills imbalances. Shortages in STEM occupations can be linked to a low and declining supply of graduates in the natural sciences, engineering and ICT: only 17.4% of tertiary students in Belgium graduated in one of these fields in 2015, down from 22.4% in 2005, and well-below the OECD average of 23.4% (OECD, 2017[21]). Similarly, among upper secondary graduates from vocational programmes in Belgium, only 25% graduated with a degree in engineering, manufacturing and construction in 2015, compared with 34% across the OECD. The low supply of graduates in STEM fields in Belgium, despite persistent shortages in STEM occupations, could suggest that the education system is not sufficiently responsive to labour market needs. It could also reflect that students do not view investment in STEM education as an attractive option. A study from 2013 finds that STEM professionals in Belgium have the smallest wage premium among all EU countries (17% relative to 55% in Latvia, 53% in Ireland, and 48% in Poland) (Goos et al., 2013[22]), although this may have changed as shortage pressure has intensified in these fields since 2013. According to an EU report, interest in STEM careers declines with a country’s level of development and its living standard (Caprile et al., 2014[23]). The report attributes the low and declining attraction to STEM jobs to a range of social, cultural, economic and education factors, including the changing attitude of society towards science and technology, and the view that training as an engineer or scientist is far from being the best track to a top management position. Rapid depreciation in the currency of STEM degrees in light of technological change may also reduce a student’s motivation to study these courses.

Figure 3.8. Distribution of upper secondary student enrolment, by programme orientation
By programme orientation, Flanders and selected countries and regions, 2016
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Source: Eurostat (2018[27]), Distribution of pupils and students enrolled in general and vocational programmes by education level and NUTS2 regions, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=educ_uoe_enra13.

 StatLink https://doi.org/10.1787/888933891680

Flanders introduced the 2012-2020 STEM Action Plan to raise the supply of graduates with a STEM education. The plan involved a number of actions, including: improving the marketing and communication of STEM education, strengthening the training of teachers and educators in STEM fields, improving the process by which career and study choices are made and attracting more girls to STEM courses and occupations. Despite these efforts, the supply of STEM graduates remains low.

There is also a limited use of work-based learning in vocational programmes for young people in Flanders. Vocational programmes that include work-based learning have been shown to improve school-to-work transitions for young people by equipping them with the skills that employers need (OECD, 2017[24]). Compared to the EU average, a high share of upper secondary students enrol in vocational programmes in Flanders (Figure 3.8). However, vocational education and training (VET) in Belgium has a much stronger emphasis on school-based over work-based learning (OECD, 2017[25]; Musset, 2013[26]): in 2015, 94% of vocational enrolment in upper secondary education was in school-based programmes (OECD, 2017, p. 258[24]).

Activation of some groups is low, which restricts the supply of skills. Among the working-age population (15-64 years old), only 68% of Belgians were working or looking for a job in 2017, which is a relatively low activity rate compared to the EU average (73.3%) and countries with high labour force participation rates such as the Netherlands (79.8%), Iceland (88.7%) and Sweden (82.5%) Figure 3.9. As recommended in the OECD Economic Survey of Belgium (OECD, 2017[28]), boosting labour force participation in Belgium depends on lifting the participation and employment of certain under-represented groups, including older workers, youth, the low-skilled, and the foreign-born population. Recent reforms to the pension system to raise the eligibility age for retirement will help to reduce disincentives to work among older workers. A review of disincentives to work is beyond the scope of this report, but the Flemish government should continue to monitor activity rates among under-represented groups, and adjust policy settings to lower disincentives to work as necessary.

Figure 3.9. Labour force participation rate by age group, Flanders and EU-28, 2017
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Source: Eurostat (2018[29]), Economic activity rates by sex, age and NUTS 2 regions [lfst_r_lfp2act], http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfst_r_lfp2actrt&lang=en.

 StatLink https://doi.org/10.1787/888933891699

Career and training guidance services are currently separated in Flanders, and a recent evaluation found that while career guidance services are well-established, guidance for education and training is not (Vlaams Adviescomité project GOAL, 2018[30]). Effective career and training guidance over a lifetime can improve skills matching by making individuals aware of relevant labour market opportunities, assessing transferable skills, and pointing individuals towards learning opportunities which could help them to train for opportunities in promising jobs or sectors. Creating bridges between the career guidance and education guidance services would improve skills matching. These two services should work closely together in order to refer clients to each other and to support each other’s services.

Weaknesses in the existing system of skills validation is another factor behind skills imbalances. Recognising and validating skills, regardless of where or how they were acquired, allows them to be put to more effective use in the labour market. The Flemish system of skills validation (EVC) is currently undergoing reforms to address weaknesses, which include: a poor link between the EVC process and qualifications and an overly complex system. In the past, the system has failed to raise awareness about EVC among employers and to secure the support of key stakeholders (SERV, 2015[31]). As a result, skills validation is not widely practiced. This may be a particular challenge for older workers, with a recent analysis forecasting that skills obsolescence of older workers will be a major social risk in Flanders in the future (Sels, Vansteenkiste and Knipprath, 2017[32]). Better skills validation would help older workers to retrain in expanding occupations and sectors without having to start new degrees from the beginning.

Labour mobility facilitates the optimal allocation of skills to the regions, occupations and sectors where they are most needed. Barriers to labour mobility may include language, housing, transportation costs, poor recognition of skills or credentials and variation in licensing requirements. Evidence suggests that there are barriers to geographic mobility in Flanders and Belgium. A body of Flemish research finds that the risk of over-qualification during a graduate’s first years on the labour market is positively correlated with the regional unemployment rate. De Witte and Hindriks (2017[33]) interpret this evidence as implying that the geographic mobility of young people is constrained; otherwise, there would not be such large negative impacts from regional labour market shocks. Variation in regional unemployment rates is also symptomatic of constraints in the free movement of labour (Zimmer, 2012[34]). In 2017, the unemployment rate in the province of Antwerp in Flanders was nearly double that of the province of West Flanders (5.9% versus 3.2%). At the country level, this variation is even more extreme: the Brussels-Capital region and the Wallonia region had an unemployment rate that was more than triple and double, respectively, the unemployment rate in Flanders (14.9%, 9.7%, versus 4.4%). Such a large variation in unemployment rates between regions suggests that there may be barriers preventing workers from moving to areas where their skills would earn the highest return.

Movement from one job to another can also result in better skills matches, but such movements are modest in Flanders. Across OECD countries, the job-to-job transition probability averages 7%. This probability masks significant cross-country differences: Norway, Sweden and Germany all have transition probabilities in excess of 16% (Garda, 2016[35]). In Flanders, only 5.6% of workers move from one job to another on an annual basis, similar to Belgium (4.9%).

Policies and practices to reduce skills imbalances

This section discusses how to reduce skills imbalances through relevant policies and practices. It is based on input from the stakeholder workshops, bilateral meetings, site visits and OECD analysis of international and national data sources and literature. Stakeholder perspectives on specific recommendations are indicated where they appear.

During the two OECD Skills Strategy workshops in May and September 2018, stakeholders in the table groups assigned to the skills matching topic discussed a wide range of issues and proposed recommendations for Flanders. The OECD team has carefully considered each of the perspectives and recommendations and prioritised and elaborated those viewed as most important in this section. A comprehensive list of the proposed ideas can be found in Annex A.

Ensure the education system is responsive to changing skills demand

While the objective of education and training goes beyond preparing individuals to contribute to the labour market (see Chapter 2 on learning culture), this is an important objective. An education system that is responsive to labour market needs provides adequate incentives to institutions to offer courses in high demand, and to potential students to take those courses. It should also equip individuals with the necessary foundational skills to succeed in the labour market, now and in the future.

In vocational education, work-based learning offers real on-the-job experiences that make it easier to acquire both hard skills using modern equipment and soft skills by working with people (OECD, 2010[36]). Employer willingness to offer workplace training signals that a VET programme is relevant and has labour market value. Although there is still a strong emphasis on school-based over work-based learning in vocational programmes in Belgium, Chapter 2 on learning culture explores how Flanders is starting to expand its use of work-based learning in vocational programmes, and what more can be done.

In general education, an assessment of the financial returns to education for particular fields of study provides some indication of the incentives that potential students face to invest in those fields. In Belgium (Flanders data not available), graduates of STEM fields earn a higher wage on average relative to non-STEM graduates; however, this wage premium is low relative to other countries in the EU (Goos et al., 2013[22]). Low returns to STEM study may contribute to the low supply of STEM graduates in the labour market.

Many countries have scholarship programmes that provide incentives for students to take up certain courses (OECD, 2017[37]). The vast majority of these programmes focus on STEM courses, with the remaining targeting subjects for which there is unmet labour market demand. In Flanders, the cost of education is already low (average tuition fees for enrolment in college or university in Flanders are EUR 890 for non-scholarship students and EUR 105 for scholarship students) (Geboers, 2015[38]), leaving little scope for the government to influence study choices in this way. Loans and grants in higher education in Flanders are generally dependent on family income, and not tied to study in particular subjects.

Some governments use funding arrangements for education and training institutions to steer the mix of provision in favour of subjects that face high labour market demand. The Korean government, for example, provides special funding to the 50 universities with the best performance in terms of graduate employment rates, the proportion of teachers with industry experience and the proportion of students who took part in an internship or fieldwork. The Higher Education Funding Council for England offers one-off capital funding to develop and modernise STEM facilities.

In Flanders, funding of higher education institutions is based on student enrolment and the cost of training. Courses that are more expensive to offer (e.g. biomedical sciences due to the cost of laboratories and equipment) are allocated more funding.

Making the education system more responsive to labour market demand is not only about boosting the supply of graduates with in demand qualifications, it also means equipping individuals with the skills needed to build careers with sustainable employment prospects. The Skills for Jobs database identifies a range of transversal skills currently in shortage in Flanders, including basic skills (numeracy and literacy), systems skills, complex problem solving, and reasoning abilities. These align with the skills that are likely to be relevant for the future labour market. The OECD (2017[39])finds that to get the most out of global value chains, for example, industries need workers with literacy, numeracy and problem-solving skills, prowess in management and communication, and a readiness to keep learning. Some of these transversal skills (e.g. literacy, numeracy and problem-solving skills) are also essential for adults to be able to participate in training opportunities over the course of their careers.

Finally, experience from OECD countries has shown that involving social partners can be beneficial for assessing and anticipating skills needs (OECD, 2016[40]), as well as developing education and training curricula that match labour market needs (OECD, 2017[37]). In Flanders, it is a legal requirement that all public higher education institutions have social partner representatives on their board of directors (OECD, 2017[37]).

The OECD (2017[28]) recommends that disseminating data on wage premia by field of study, instead of just by level of study, could entice more prospective students to choose fields more relevant to the labour market. Employers may need to improve the compensation package offered to STEM professionals, and other occupations with persistent shortages, to attract more students to these fields. At the same time, government should monitor the implicit incentives that students face to study different courses, and, if needed, offer scholarships to cover the cost of living expenses for students who study in high-demand courses. Furthermore, government should ensure that education institutions face the right incentives to adjust course offerings in response to labour market demand. This may mean targeting public subsidies at particular courses, introducing elements of performance-based funding, or providing one-off capital financing to develop and modernise facilities to support the provision of education and training in high-demand areas.

Improve information about current and future skills needs

Information from skills assessment and anticipation (SAA) exercises helps individuals, social partners and policy makers to make choices that bring skills supply and demand into alignment. Improving the match between the demand and supply of skills hinges on collecting and using high-quality and up-to-date information on skills needs. Such information can be used in a variety of policy areas, including migration, education and training and employment. Sweden, for example, has become a leader in the development and use of SAA information at the national, regional and sectoral levels (Box 3.1).

Flanders collects information about both current and future skills needs. As noted above, Flanders’ public employment service, VDAB, produces a list of bottleneck occupations that can be translated into skills needs by the “Competent” database. This list of shortage occupations provides an indication of current skills needs and is used for general information purposes, as well as to inform education and training subsidies. For instance, participation in full-time formal training programmes in shortage areas is fully subsidised for jobseekers via the Education Qualification Pathway (OKOT).

To assess future skills needs, the Department of Work and Social Economy developed a skills forecasting methodology (VLAMT, Vlaams ArbeidsMarktonderzoek van de Toekomst) to anticipate skills needs at the sectoral level. VLAMT was piloted in several Flemish sectors, which could receive European Social Fund co-funding for running these forecasts. The methodology is mostly qualitative and involves conducting interviews with the most innovative firms in emerging industries as these are believed to have the best grasp on the future skills needs of the sector. During interviews, participants are asked to reflect on possible 10-year business case scenarios and which skills would be needed under each scenario. The results of VLAMT are used by the Flemish government to invest in future-oriented and labour market relevant training and to improve career guidance. During workshops, some employer stakeholders noted that the results of the VLAMT exercises had proven useful in developing training plans. At the same time, stakeholders also identified a limitation with sector-specific exercises, as it is not possible to obtain a broader sense of economy-wide labour market needs.

A consulting firm commissioned by the sectoral training fund, Agoria, carried out a national forecasting study in co-operation with VDAB, FOREM (Walloon public employment service) and ACTIRIS (Brussels public employment service). The main results of the study are that by 2030, growth in demand for labour (0.9% annually) will outstrip growth in supply (0.3%), and 584 000 vacancies will not be filled across Belgium. Furthermore, 310 000 employees and jobseekers will have to be retrained in order to remain in the labour market. The strongest increase in vacancies will be in the education, services and health care sectors. Sectors with high productivity growth - such as agriculture, metal and electric sector, media and digital entertainment - face negative growth in labour demand.

A human capital agenda to make the skills system responsive to the needs of the labour market (elaborated in Chapter 5 on governance) should be based upon assessments of skills needs and skills forecast exercises. Flanders could consider committing to a long-term collaboration agreement with other regions to carry out forecast exercises on a regular basis.

Box 3.1. Skills assessment and anticipation exercises in Sweden

Skills mismatches and shortages are widespread in Sweden. To help address these skills imbalances, Sweden has become a leader in the development of skills assessment and anticipation (SAA) exercises to collect timely and robust information on current and future skills needs at the national, regional and sectoral level. The responsible agencies, Statistics Sweden and the Swedish Public Employment Service, use surveys and forecast models, as well as constructive dialogue with stakeholders. SAA information in Sweden is used in education policy by informing prospective students through career guidance. In employment policy, the PES has made considerable investments in improving its capabilities to match the skills of jobseekers to those required by employers based on the results of SAA exercises.

Source: OECD (2016[41]), Getting Skills Right: Sweden, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264265479-en.

Create bridges between career and training guidance support

Effective career and training guidance over a lifetime can improve skills matching by making individuals aware of relevant labour market opportunities, assessing transferable skills and pointing individuals towards learning opportunities that would help them to train for opportunities in promising jobs or sectors. Given that adult learning in Flanders is fragmented and spans policy domains and ministries, adults can benefit from objective guidance about available learning opportunities and where they might lead in terms of career or learning trajectories. Such support is particularly relevant in adult learning, where adults must take the initiative as learning is no longer compulsory.

Flanders offers subsidised career guidance services to support lifelong learning. Through VDAB, jobseekers have access to free guidance and training to help them overcome obstacles to employment. Employed and self-employed workers can also apply to VDAB for career guidance vouchers, which offer four hours of subsidised career guidance with a mandated career coaching centre of their choice. Individuals have the right to two vouchers (i.e. 8 hours in total) every six years. Consisting of conversations, exercises, checklists, etc., the career guidance service results in a personal development plan. If training is needed to reach the client’s career ambitions, then the career guidance counsellor will help the client identify specific training and inform them about the availability of training vouchers to finance the training.

Since the introduction of the career guidance vouchers in 2013, career guidance is offered by both private and non-profit providers and the number of career centres has increased sevenfold: a Flemish citizen can find an average of 12 offices for career guidance within a 5km radius. Customer satisfaction rates are high (86% in 2016). However, evaluations suggest that high-skilled adults are more likely to use the career guidance vouchers than low-skilled adults (VDAB, 2017[42]).

Newcomers to Flanders can also access social orientation courses, and individual support and guidance towards Dutch language courses via locally-based integration agencies. Such agencies also have agreements with the Flemish public employment service to refer newcomers to their programmes for career guidance, job search and professional training.

However, as noted in a recent evaluation of the Guidance and Orientation of Adult Learning (GOAL) project, while career and employment guidance is well-established in Flanders, guidance for education and training is not (Vlaams Adviescomité project GOAL, 2018[30]). Pilot education guidance projects in West Flanders (Leerwinkel,Box 3.2) and Ghent (De Stap) have been successful in providing a neutral source of information about training opportunities, and most participants of the programme go on to enrol in some form of adult learning. While Leerwinkel counsellors discuss employment possibilities in their guidance sessions, this is not a primary focus. Referrals from the public employment service and immigration agencies have proven effective in attracting vulnerable groups to these services. The GOAL project evaluation recommended that education and training guidance be more structurally embedded in Flanders, which would create stability for the guidance centres and allow adults from all regions in Flanders to benefit.

More bridges between career guidance and education guidance services are needed in Flanders. This does not entail combining these services, but rather, as recommended in the GOAL project evaluation report, the career guidance and education guidance services should work closely together in order to refer clients to each other and to support each other’s services. Furthermore, these services could be offered in tandem in the same location to facilitate access. Some thought could also be given to extending the use of the career guidance vouchers (Loopbaancheques) to education guidance.

Box 3.2. Reaching out to vulnerable groups in Flanders

Adults living in poverty face both practical and psychological barriers that prevent them from participating in adult learning: lack of awareness about adult education opportunities; lack of transport and time; and low self-esteem or shame about their low level of literacy and numeracy. The Learning Opportunities project (Leerkansen) tries to overcome these barriers by bringing adults living in poverty into contact with learning opportunities in an accessible way. Local Centres for Adult Basic Education (CABE) collaborate with non-governmental organisations (NGOs) with a focus on adults from low socio-economic backgrounds. A basic education teacher from CABE regularly visits the NGO to become familiar with the association and its members and to detect learning opportunities. Through coaching and participant observation, the teacher aims to develop a learning culture in the association by making learning functional, by adapting learning to the individual needs of the participants, and by integrating learning in the activities of the association.

Leerwinkel (which means learning shop) is one of the programmes included under the Erasmus+ Guidance and Orientation for Adult Learners (GOAL) Project co-ordinated by the Flemish Government’s Department of Education and Training. Leerwinkel was designed as a one-stop-shop where potential learners in West Flanders could go to learn which educational options and financial incentives are available to them, and to receive neutral assistance in navigating the system. Any adult can come to Leerwinkel for help, but the programme specifically targets low-educated persons, prisoners, and immigrants. Many participants come through referrals from public employment offices and immigration agencies with whom Leerwinkel has strong partnerships. The value-added of the programme is that it provides independent and neutral advice, which is tailored to the clients’ needs and not connected to a particular educational institution (Schiepers et al., 2017[43]).

At the end of the GOAL project, UCL (University College London) Institute of Education performed an evaluation of the project in co-operation with local implementers. The quantitative results showed that 78% of service users had enrolled in some form of adult learning and 49% of clients who granted consent to be tracked in the department’s database had enrolled in an educational programme at a Centre for Adult Education (formal education). Clients of Leerwinkel also reported that they discovered training opportunities they did not know existed, increased their self-confidence and received tailored advice adapted to their personal situation. There were no evaluations of the impact of training on employment outcomes.

Sources: Netwerk tegen Armoede, Federatie Centra voor Basiseducation vzw and Vocvo vzw (2015[44]), Learning Opportunities, http://www.netwerktegenarmoede.be/documents/Dossier-Leerkansen.pdf;El Yahyaoui, Hoefnagels, Reynders & Van den Buijs (2018[45]), GOAL National Evaluation Report Flanders, https://adultguidance.eu/images/Reports/GOAL_National_Evaluation_Report_Flanders.pdf.

It is also important that adults be able to easily access information about both employment and learning opportunities. To assist potential learners in navigating the many opportunities available for learning, the Department of Education and Training supports an education guidance website (Education Chooser—Onderwijskiezer) which gathers objective and detailed information about education and training options (elementary, secondary, higher education and adult learning), as well as information about bottleneck occupations. The website usefully highlights which courses teach STEM skills to encourage training in the skills needed in bottleneck STEM occupations. Users can consult career guidance tools and submit questions. The website also provides concise information about government financial incentives for training. A career guidance website, My Career (Mijn Loopbaan), is operated by VDAB. It provides tips and information on how to look for a job, how to take stock of one’s skills, descriptions of occupations with good labour market prospects, and how to train for these occupations via programmes offered by VDAB. Links allow users to move easily from one website to the other.

The challenge with these types of online services is tailoring the information to the specific and diverse needs of target groups. Users should ideally be able to answer some questions about their skills and experience, as well as their career aspirations, and be provided only with information that is relevant to them. In Denmark, a live chat feature on the careers website provides customised information for users (Box 3.3). In New Zealand, the careers guidance website features an interactive tool which informs users about the specific skills, courses or qualifications they are missing to work in their desired occupation (Box 3.3). Clear instructions for how to proceed with additional training are also provided. The New Zealand career guidance website provides a good example of a tool that integrates detailed information about careers and training possibilities and ensures that users only receive the information relevant for them through an interactive format.

Useful career and training guidance depends on having high-quality information about the labour market outcomes (e.g. average wage, employment rate) of training programmes. Currently, guidance websites in Flanders showcase information about the labour market prospects of bottleneck occupations, as defined by VDAB, as well as the education required to fill vacancies in those occupations. To assist prospective students, Flanders should also track the labour market outcomes of particular training programmes and disseminate this information on relevant digital platforms.

Existing digital platforms for guidance (e.g. Onderwijskiezer, and Mijn Loopbaan) could be better integrated with one another to ensure that users can easily access relevant information about both career and training trajectories. A more interactive format, similar to New Zealand’s guidance website, would help to customise information to users’ needs. The Flanders statistical offices and relevant partners (VDAB, Steunpunt, Department of Work and Social Economy, Syntra Vlaanderen) should also start tracking labour market outcomes of particular training programmes, and disseminate this information on digital platforms.

Box 3.3. Career guidance websites in Denmark and New Zealand

Denmark’s UddannelsesGuiden (Education Guide, www.ug.dk) is the national information and guidance portal for adults and young learners. The sub-portal on adult continuing education and training provides information on educational choices for adults from different education backgrounds. It offers detailed information on: education requirements for different trades and occupations; individual education institutions; estimated duration of education and training, costs and financial support available; how to get knowledge and work experience assessed and recognised, including the preparation process for the real competence assessment (RKV), places, costs, and other practical information; and guidance and counselling services available. The sub-portal on jobs and careers provides information on the Danish labour market, trades, industries and sectors, including information on current employment opportunities, the work environment, labour legislation, local job centres, and education opportunities. The sub-portal “ask a counsellor” (eVejledning) offers a number of ways to get in contact with someone who can provide customised guidance to anyone who needs help regarding education and jobs. The service is available every day, including weekends. The user can choose to communicate via email, live real-time chat or telephone.

New Zealand’s careers website allows users to learn about education and career pathways by searching by degree, skill and occupation. Users can input their degree and courses they have taken into a subject matcher tool to find out which occupations they are qualified for. Users can also search by occupations that interest them to learn which additional degrees and courses they would need in order to work in these occupations, and the average employment and salary of workers in that occupation.

For adults considering a career transition, the skill builder tool helps users build an inventory of their own skills based on the positions they have held in the formal and informal labour market. For instance, entering “mining engineer” as a previous occupation will automatically build a list of skills, among them: to design industrial equipment, prepare detailed work plans, and advise others on health and safety issues. Skills can be added or subtracted from the automatic list until it accurately represents a user’s skillset. The tool then identifies a set of alternative occupations. Skill builder also informs users about the additional qualifications or courses needed to work in a given occupation.

Sources: Danish Ministry of Education (2018[46]), About Education Guide, www.ug.dk/programmes/aboutugdk; European Commission (2018[47]), Learning Opportunities and Qualifications in Europe: Information about courses, work-based learning and qualifications, https://ec.europa.eu/ploteus/ro/node/5788; https://www.careers.govt.nz/tools/skills-builder/.

Make skills visible

Recognising and validating skills, regardless of where or how they were acquired, allows them to be put to more effective use in the labour market. Non-formal and informal learning are important modes of skills accumulation that do not lead to a formal qualification. Non-formal learning refers to education that does not lead to a nationally-recognised diploma or certificate, but rather to a diploma or certificate recognised by a sector or professional body, or to no diploma or certificate at all. Informal learning refers to learning by doing and learning from others. By improving opportunities to use skills more effectively in the workplace, validating informal and non-formal learning reduces skills mismatches. It also strengthens incentives to invest in training and helps to promote job-to-job transitions.

In Flanders, several departments regulate the validation of non-formal and informal learning, known as the EVC (Erkennen Van Competenties, skills validation), including the Departments for Work and Social Economy, Education and Training, and Culture (De Rick, 2016[48]). Validation can be used to obtain a Certificate of Experience (Ervaringsbewijs), which recognises skills acquired outside of formal education and is certified by a recognised provider, usually sectoral training funds or VDAB. In higher education and secondary adult education, validation can also be used to obtain admission to an education and training programme or to request exemptions from parts of the study programme. Arrangements for validation vary by sector. The current system is fragmented and lacks coherence, which led to the Flemish government in 2015 approving a concept note for an integrated validation framework (Vlaams Minister van Onderwijs and Vlaams Minister van Werk Economie Innovatie en Sport, 2015[49]). As a result, a government task force was set up to develop the integrated policy framework and to draft new legislation on validation (first draft approved by the Flemish Government in June 2018) (Vlaamse Regering, 2018[50]).

Reforms to the skills validation system will establish stronger linkages between skills certificates and the education system, and improve flexibility. Under the agreed concept note for a more integrated EVC policy, the validation of informal and non-formal learning could be used to acquire a qualification based on the Flemish Qualification Framework (VKS, Vlaamse Kwalificatiestructuur), which provides standard descriptions of the knowledge and skills an individual needs to work in a given occupation or to pursue further education (Vlaams Minister van Onderwijs and Vlaams Minister van Werk Economie Innovatie en Sport, 2015[49]). This should reduce fragmentation in the system by creating links between qualifications and the EVC system. The reforms would also introduce more flexibility by allowing partial qualifications. Under the current system, individuals who pursue an EVC process are not given validation for skills they have acquired unless they add up to a full qualification. The reformed EVC system would validate partial qualifications and clarify the skills and training needed to reach the full qualification.

The Flemish skills validation system has so far failed to raise awareness among employers and individuals and to secure the support of key stakeholders. The Socio-Economic Council of Flanders (SERV) noted that companies are still not sufficiently familiar with EVC (SERV, 2015[31]). There have been positive outcomes with the Certificate of Experience, but further efforts are needed to engage employers. A 2013 survey found that 1 in 4 employers had never heard of the Certificate of Experience, and 2 in 3 did not use the system for their employees. Half of all employers considered the Certificate of Experience a useful and important tool for the development of employees, while the other half did not think that it offered sufficient added value to their organisation. This latter view was echoed by employer stakeholders during workshops. Finland and Norway provide examples of countries with well-established systems of recognition of prior learning, and have successfully built trust and support among employers and other stakeholders in the system through engaging with them throughout the process (Box 3.5).

More efforts are needed to raise awareness about skills validation procedures in Flanders. Several stakeholders thought that information about EVC procedures should be centralised in a website to make it more accessible. In Denmark, for example, information about recognition of prior learning trajectories is clearly laid out on the national careers guidance website (Box 3.3). Public awareness campaigns that use media channels, events, existing networks or direct mail can also help to promote the benefits of skills validation. For instance, in 2016/2017, Portugal used a large-scale public awareness campaign to launch Qualifica, an adult learning programme that includes Qualifica Centres which provide guidance and recognition of prior learning support (OECD, forthcoming).

Ongoing reforms promise to simplify the existing skills validation system and improve flexibility, but more efforts are needed to raise awareness about EVC processes among individuals and employers. To raise awareness about EVC among employers and potential users, information about EVC processes should be centralised and available via a digital platform, possibly Onderwijskiezer or Mijn Loopbaan.

Flanders has made a lot of progress into recruiting employees based on skills. In 2012, SERV launched the Competent database that contains more than 500 profiles of occupations and the skills needed to perform them. Based on the French labour market reference framework (Romev3 of Pôle Emploi), Competent was developed in partnership with Pôle Emploi, SERV and Synerjob (a non-profit organisation which facilitates co-operation between the regional public employment services), with VDAB now responsible for managing the database.

The Competent database is used by VDAB to match jobseekers with vacancies based on skills requirements, in addition to the traditional qualification and work experience requirements. With the current digital matching tool, employers may enter their vacancy information, including location, qualification, experience and skills requirements. This allows them to see a list of candidates who match a minimum 80% of the requirements for the vacancy. At the same time, jobseekers who subscribe with VDAB complete an online profile, selecting the skills that they possess. Jobseekers receive a list of vacancies which correspond to at least 80% of their profile. All of this occurs without any human intervention. The Competent database is updated frequently to ensure that it is responsive to changing skills needs in the labour market. VDAB will soon launch a new version of the digital matching tool that is intended to make it even more user-friendly (Box 3.4).

There is some evidence that Flemish firms are moving to more competency-based assessments in their recruiting practices, particularly larger firms and firms that innovate the most (Notebaert, 2015[51]). One in three companies and organisations are estimated to use “competency profiles,” which represents an increase compared to only 24% in 2011.

Box 3.4. Matching jobseekers to vacancies with the help of artificial intelligence

VDAB will soon launch a new digital matching tool to improve how it matches jobseekers with vacancies. Using text analytics, the tool is trained to “read” uploaded job vacancies and curriculum vitae (CVs) and to recognise patterns and extract relevant information. This produces a list of qualifications and work experience, which the tool then translates into skills requirements using the Competent database. In this way, the new tool simplifies the process of inputting skills possessed or skills required. Whereas previously an employer would need to pore through hundreds of skills to decide which were relevant for their job vacancy, now all they need to do is upload a job vacancy and the tool will make suggestions for which skills to include. The employer is free to add or delete any skills suggested by the tool.

Source: Presentation from VDAB, September 2018.

Box 3.5. Developing a strong system of recognition of prior learning in Finland and Norway

Validation of non-formal and informal learning has a long tradition in Finland and is embedded in legislation. Under legislation, the validation of non-formal and informal learning is understood to be a right of the individual, and an individual’s skills ought to be given recognition regardless of when or where they were acquired. One of the strengths of the Finnish validation system is the strong co-operation with employers, who are involved in all aspects of validation, from designing the content of qualification requirements to individual validation procedures. Such co-operation promotes trust, with employers viewing qualifications gained through validation as equally valuable to the qualifications gained through school-based learning.

Recognition of non-formal and informal learning is highly recognised in the Norwegian economy, thanks to a national legal framework and engagement with stakeholders in the validation process. Vox, the Norwegian agency for lifelong learning (affiliated to the Norwegian Ministry of Education and Research), estimates that 55% of all adults completing upper secondary education (including VET) in 2008 had undergone validation of their prior learning, and 86% of these were granted exemption of at least one module. Validation in Norway is often geared towards obtaining a trade certificate, as many adults have worked in a trade for years without much schooling and with no certificate. Evaluation results indicate that validation of prior learning contributes to greater flexibility in working life and improved standing in the job market (e.g. more interesting tasks, better wages), as well as improved access to the labour market for those previously excluded.

Sources: Karttunen (2016[52]), 2016 Update to the European inventory on validation of non-formal and informal learning, https://cumulus.cedefop.europa.eu/files/vetelib/2016/2016_validate_FI.pdf; Cedefop. European Commission; Cedefop; ICF International (2014). “European Inventory on validation of non-formal and informal learning 2014: country report Finland.” Yang (2015[53]), Recognition, Validation and Accreditation of Non-formal and Informal Learning in UNESCO Member States, http://unesdoc.unesco.org/images/0023/002326/232656e.pdf.

Promote labour mobility

Labour mobility facilitates the optimal allocation of skills to the regions, occupations and sectors where they are most needed.

Flanders has participated in initiatives to improve regional labour mobility in Belgium. In 2005, the communities and regions (Brussels-Capital region, the Flemish region, the Flemish community, the Walloon region, the French Community Commission and the German-speaking communities) signed a co-operation agreement to share hard-to-fill vacancies systematically between the various public employment services (VDAB, ACTIRIS, FOREM, and ADG) for more efficient skills matching.

In February 2018, given the high rate of unemployment in Wallonia compared with in Flanders, the two regional governments signed a strategy to promote the matching of Wallonian jobseekers with Flemish job vacancies. The strategy involves: improving the compatibility of skills matching software used by the Flemish and Wallonian public employment services; developing business-oriented Dutch language courses and modules which can be followed by French-speaking Walloons in the workplace; and building awareness among Flemish employers about the possibility of recruiting from Wallonia, e.g. through job fairs where employers and jobseekers interact with one another.

In order to promote and facilitate the inter-regional mobility of trainees in vocational training, the regional and community institutions responsible for vocational training in Belgium signed a framework agreement in 2008. Under this framework, a common procedure allows trainees to follow a vocational training course in the region of their choice, provided they comply with conditions and obtain the approval of the institution in their place of residence.

More efforts are needed to facilitate job-to-job and sector-to-sector transitions. Low job-to-job mobility is associated with weak worker reallocation and poor skills matching (OECD, 2017[28]). Housing, product and labour market policies all affect mobility rates. The design of national level sectoral training funds creates incentives to limit training investment to within individual sectors, which dampens sector-to-sector mobility and reduces the ability of workers in declining occupations and sectors to retrain for occupations and sectors with better prospects.

The OECD Adult Learning dashboard shows that across countries, workers in jobs with significant risk of automation are less likely to participate in training than adults with low risk of automation. Similarly, workers employed in surplus occupations (as defined by the OECD Skills for Jobs database) are less likely to participate in training than those in shortage occupations. Flanders is among the countries where these differences are greatest: workers in jobs with high risk of automation are 24 percentage points (p.p.) less likely to participate in training (OECD average is 19 p.p.), and workers in surplus occupations are 20 percentage points less likely to participate in training (OECD average is 9 p.p.). More efforts are needed to facilitate transitions from declining to expanding sectors and occupations.

Through sector covenants, which are collaboration agreements between sectors and the Flemish government, there have been examples of successful co-operation between sectors in the use of sectoral training funds. When the Flemish government approves a sector covenant, the sector receives regional government funding to implement the plan (see Chapter 5 for more on sector covenants). For example, as part of the 2018-19 sector covenant, the Flemish government provided funding for several industrial sectors (food, textile and metal) to collectively organise training which would be relevant to each of them (e.g. training in operations). The three sectors shared the cost of the training, allowing them to organise more courses and to ensure a wider regional distribution.

Further co-ordination in the use of sectoral training funds between sectors, either by pooling resources for specific initiatives or by taking advantage of services already financed by other sectoral training funds, would help to finance the training of workers to shift from low-demand sectors to high-demand sectors, and would yield efficiencies in responding to common challenges, such as responding to digitalisation or shortages in STEM fields. In the Netherlands, the government has encouraged stronger collaboration among sectoral training funds via sectoral plans (Box 3.6).

A balanced portfolio of skills is also needed. Given uncertainty about the precise skills needed in the future, the best risk mitigation strategy for individuals and society is to develop a balanced portfolio of skills. High levels of cognitive skills, social and emotional skills and relevant job-specific skills are needed to ensure that individuals and society are resilient and adaptable in the context of change. Such an approach supports sustainable employment for individuals and promotes movement of labour to occupations and sectors that are most in need of skilled workers.

Social partners should work with the Flemish government to promote the sharing of sectoral training funds between sectors to better facilitate workers’ transitions from declining to expanding sectors, and aggregate funds to address common skills challenges, such as adopting digital technologies and addressing STEM shortages. Government should also continue to monitor whether its policies are having the desired effect of providing individuals with a balanced portfolio of skills which includes strong cognitive, social and emotional, as well as relevant job-specific skills. Making workers more adaptable and resilient promotes movement of labour to occupations and sectors that are most in need of workers.

Box 3.6. The Netherlands’ sector plans

In 2013, the Dutch government introduced sector plans (sectorplannen) as a co-financing solution for training and guidance to help address mismatches between the demand and supply of skills. The government allocated EUR 600 million to finance the sector plans, which represents 50% of total costs: social partners pay the remaining 50% and are heavily involved in drafting the plans. Most of the resources go to training and guidance for employees who have been made redundant. Training is designed and implemented by the social partners.

There are several examples of sectors co-ordinating with one another to develop sector plans that support labour mobility. For instance, given strong growth prospects in the ICT sector, the ICT sector plans make training and guidance available to attract new employees to the sector. The cost of the training is shared by the transition fund and the future employer. Taking advantage of these opportunities, the culture sector plans offer guidance to direct unemployed workers in the sector towards available training in ICT, particularly in light of transferable skills between the two sectors (e.g. creativity).

In 2014, the transport and logistics sector saw almost 250 companies go bankrupt, putting 3 000 employees at high risk of unemployment. Through their sector plan, a transfer centre was opened which focused on providing training and guidance to at-risk employees to help them secure work in a different job within or outside the sector (e.g. public transport, security, and passenger transport).

Source: Stichting Opleidings‐ en Ontwikkelingsfonds Beroepsgoederenvervoer over de weg en de Verhuur van Mobiele kranen (2015[54]) Sector plan transport and logistics 2016-2017, https://www.soob-wegvervoer.nl/files/117/files/Sectorplan-2016-2017.pdf; Cultuur-Ondernement (2014[55]), Sector plan Culture: Plan of Action, http://www.sectorplancultuur.nl/wp-content/uploads/2014/04/D.Plan-van-aanpak-3.pdf.

Prioritise training in high-demand skills for jobseekers, particularly those at risk of long-term unemployment

Promoting upskilling and retraining of long-term unemployed in skills and occupations where Flanders has shortages could help address skills imbalances while improving the employability of the long-term unemployed. Training for the unemployed in Flanders is heavily focused on work placements and VDAB offers several types of training programmes with a work placement component. The Individual Vocational Training (Individuele Beroepsopleiding – IBO) and the internship as a requirement of a study-based programme (Opleidingsstage) together account for 79% of enrolments in work-based training for jobseekers (VDAB, 2017[56]), though there are other programmes as well3. The Opleidingsstage generally lasts 2-3 months, and forms part of a study programme, 69% of which are in care and education (VDAB, 2017[56]). IBO allows employers to hire a jobseeker and, with the financial support of VDAB, train them in the workplace typically over a period of 4-26 weeks. The wage and social security contributions of the individual are covered by VDAB, with the employer paying only a “productivity premium.” In return, the employer is expected to hire the individual after the training, normally on an indefinite contract. This programme has been highly successful, with 90% of participants still working in the same company where they trained one year after the programme (VDAB, 2017[56]).

Recognising that employers may be less willing to engage long-term unemployed in this type of contract, the VDAB offers an alternative version of the IBO programme, K-IBO, to employers willing to hire workers who have been unemployed for a year or longer or those with a disability. For these workers, the maximum duration of the training is longer (52 weeks), and the employer is not expected to pay a productivity premium and the training is completely free.

As part of a recent pact made between the Flemish Minister for Work and employers (Pact tegen krapte op de arbeidsmarkt, January 2018), both parties agreed to four actions to improve the matching of long-term unemployed with vacancies: 1) the government will take action to speed up and improve the screening of long-term unemployed; 2) the government will work with employers to ensure that more vacancies are described in terms of skills rather than qualifications or experience; 3) employers committed to double the number of opportunities for IBO training; and 4) employers were encouraged to provide feedback to VDAB about the success of a particular match. While the outcomes of these actions have not yet been evaluated, they appear to be promising steps towards improving the matching of long-term unemployed with vacancies.

VDAB should continue to work closely with employers and sectoral groups, as well as with adult education centres, to supply training to jobseekers in skills in high demand. The government should monitor whether the recent actions (Pact tegen krapte op de arbeidsmarkt) are successful at their objective to improve the matching of long-term unemployed with vacancies.

Summary of recommendations

Drawing on the evidence presented in this chapter, Flanders could consider the following recommendations to reduce skills imbalances:

  • Provide individuals with a balanced portfolio of skills. Training providers and employers should develop and promote transversal skills that are likely to be needed across occupations in a rapidly changing economy, including literacy and numeracy, complex problem solving, and reasoning abilities. Government should continue to monitor whether its policies are having the desired effect of providing individuals with a balanced portfolio of skills which includes strong cognitive, social and emotional, as well as relevant job-specific skills. This balanced portfolio of skills promotes movement of labour to occupations and sectors most need in need of workers, and supports sustainable employment outcomes.

  • Make the education system more responsive to changing skills demand. The government should disseminate data on wage premia by field of study instead of just by level of study, in addition to information on labour market outcomes more generally. This could entice more prospective students to choose fields relevant to the labour market. Employers may need to improve the compensation package offered to occupations with persistent shortages, to attract more students to these fields. At the same time, government should monitor the incentives that students face to study different courses, and if needed, offer scholarships to cover tuition and living expenses for students who study in high-demand courses. Furthermore, government should ensure that education institutions face the right incentives to make course offerings responsive to changing skills demand.

  • Support assessments of skills needs and skills forecast exercises. The government could consider committing to a long-term collaboration agreement with other regions to carry out skills forecast exercises on a regular basis. This intelligence could feed a human capital agenda to make the skills system responsive to the needs of the labour market (elaborated in Chapter 5 on governance).

  • Create bridges between career and training guidance support. The career guidance and education guidance services should work closely together in order to refer clients to each other and to support each other’s services. These services could also be offered in tandem in the same location to facilitate access. Some thought could be given to extending the use of the career guidance vouchers (Loopbaancheques) to education guidance. Existing digital platforms for guidance (e.g. Onderwijskiezer and Mijn Loopbaan) could be better integrated with one another to ensure that users can easily access information about both career and training trajectories. A more interactive format, where the information provided to users is based on responses to a set of questions about their skills and experience would help to customise information to users’ needs. The Flanders statistical offices and relevant partners should also track the labour market outcomes of training programmes and disseminate this information on relevant digital platforms.

  • Raise awareness about skills validation (Erkennen Van Competenties – EVC) among employers and potential users. Ongoing reforms promise to simplify the existing skills validation system and improve flexibility; however, survey evidence suggests that more efforts are needed to raise awareness about EVC processes among users and employers. Information about EVC processes should be centralised and available via a digital platform, such as a careers website, as in Denmark.

  • Mobilise sectoral training funds to address skills shortages. Social partners should work with the government to promote the sharing of sectoral training funds between sectors to better facilitate workers’ transitions from declining to expanding sectors, and aggregate funds to address common skills challenges, such as adopting digital technologies and addressing STEM shortages.

  • Prioritise training in skills in high demand for jobseekers, particularly those at risk of long-term unemployment. VDAB should continue to work closely with employers and sectoral groups, as well as with adult education centres, to supply training to jobseekers in skills in high demand. The government should monitor whether the recent actions (Pact tegen krapte op de arbeidsmarkt) are successful at their objective to improve the matching of long-term unemployed with vacancies.

References

[8] Adalet McGowan, M. and D. Andrews (2015), “Labour Market Mismatch and Labour Productivity: Evidence from PIAAC Data”, OECD Economics Department Working Papers, No. 1209, OECD Publishing, Paris, https://dx.doi.org/10.1787/5js1pzx1r2kb-en.

[11] Agoria (2018), La digitalisation et le marché du travail belge (Shaping the future of work), https://info.agoria.be/nl/bethechange.

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Notes

← 1. O*NET (Occupational Information Network) is a competency-based occupational framework sponsored by the US Department of Labour that contains detailed information about the knowledge, skills, and ability requirements of more than 800 occupations.

← 2. There are four sub-components of knowledge of engineering and technology, according to the O*NET classification: computers and electronics; engineering, mechanics and technology; design; building and construction; and mechanical.

← 3. Other work-based learning programmes for the unemployed include the job-advisory traineeship (De beroepsverkennende stage—BVS), the activation traineeship (De activeringsstage), the Occupational Survival Agreement (De beroepsinlevingsovereenkomst—BIO), and the work experience internship (De werkervaringsstage).

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