EMLT Bulletin 15 (May) - EN

PROJECT

www.emlt.eu

MAY, 2016

15

DE ES ED RE M Kİ UC AS AN ŞE O D A Hİ M TI NS S I O R C ISM ON FO DE AP F I HA A -JO R PL ND M TC B IC US BE H; AT TR R IO Y N

DEMAND SIDE REASONS FOR EDUCATION-JOB MISMATCH; ESKİŞEHİR CHAMBER OF INDUSTRY APPLICATION Adam Smith said that diversifying the labor according to their skills is a good way of increasing efficiency (Smith, 1965). It is also important for the firms to maintain a good match between educated people with their skills (Lazear and Oyer, 2009, p. 19). Means, each worker could work in a position which directly matches with her/his skills. Bloom and Van Reenen (2007, 2011) run a survey in 17 countries. Their analysis showed that a good HR management (determining skills of the labor force, motivation, promotion and etc.) shifts firm’s performance in several ways (profitability, productivity, sales and etc).

When employees work in a position which is not fitting with their skills and education, mismatch occurs. The main reasons behind rising education – job mismatch problem are: there are not enough suitable jobs which can match with well qualified labor force, and increasing number of well-educated people in the society (Bassanin & Scarpetta, 2001) (Barro & Lee, 2001). There are some direct and indirect relationships between education – job match and productivity. Mismatch brings a wage penalty (shows an adverse productivity effect directly) and decreases job satisfaction. Moreover, dissatisfied workers are tend to earn less than who are satisfied (shows an indirect effect of mismatch on productivity) (Robst, 2006). Following graph shows the percentage of education job mismatches among the workers in OECD countries.

How many workers are mismatched by field across countries?

Percent of workers in afield with training in another, 2012

50%

50%

49%

48% 45%

45%

44%

42%

42%

42%

41%

39%

39%

38%

38%

38%

37%

35%

35%

34%

34%

33% 28%

26%

Resource: Montt, Guillermo (2015), “The Causes and Consequences of Field-of-Study Mismatch: An Analysis Using PIAAC”,

Finland

Germany

Austria

Norway

Sweden

Netherlands

Denmark

Estonia

Canada

Slovak Republic

Czech Republic

Cyprus *

Belgium *

Average

Poland

Irleand

Russia *

France

Spain

United States

Japan

Australia

Italy

United Kingdom *

Korea

23%

Education-job mismatch problem is generally caused from the HR departments’ failure of choosing the right person for the right job. While employees are facing lower wages and lower job satisfaction, employers also face some serious consequences of mismatch problem. Most harmful effects of mismatch that employers face are increasing in job quit ratios and efficiency losses (Wolbers, 2003).

Despite there are a lot of studies about the mismatch problem, only a few of them about the recruitment strategies. It is difficult to determine the total negative effect of wrong recruitment and monitoring strategies on firm characteristics and mismatch problem due to the lack of data (Oyer and Schaefer, 2011). In addition to that, the reasons why the companies employ more skilled workers than they need and what is this excess labor’s contribution to the companies are still unclear. Yet we still do not know how much of the employment of low-skilled workers caused from market structural problems (Freeman, 1976; Borghans and de Grip, 2000; Hartog, 2000). In order to identify those kind of factors, we need to conduct demand-side researches.

To avoid mismatch problems in the recruitment process, HR executives need to use different kinds of technologies to properly identify the candidate’s skills and qualifications (Jovanovic, 1979).

Many factors can be given as a source of mismatch (Oyer and Schaefer, 2011). The most important factors are the intrinsic characteristics of both supply and demand side.

For example, the one applying for a position in the production process -using particular technology or software, should be good at using that technology; otherwise the mismatch will appear. So, high digital literacy and skills are required to fulfill technology-based tasks. Moreover, lack of computer skills is considered as an important factor, preventing a possible perfect match of employees in high-tech companies. Another source of mismatch is resulting from job advertisement mistakes of HR departments.

Mismatch occurs because HR executives write a lot of unnecessary requirements/skills for a position instead of a particular skill (Lazear, 2009). If one will look deep into this problem, he/she will find out that the firms do not have enough knowledge about what is the partial effect of these skills to the employee’s future productivity (Lazear, 1998).

So, HR departments do not analyze the level and characteristics of demanded skills and their contribution for the related position. Resulting from that, one can decide not to apply for that position, or HR departments reject his/her application related to his lack of (unnecessary) skills. However that rejected person could be the best match with his particular skill for that position. One last reason for mismatch is false information given by candidates.

In this bulletin, we’ve conducted a survey among 34 member firms of Eskisehir Chamber of Commerce. Our main purpose is to examine the factors behind the education job mismatch in a demand-sided view. Here are the results: 2.B Sex %47.1 of respondents are female and the %52.9 are male working in either in HR

•

Female: 47,1%

•

Primary School

•

High School

•

Male: 52,9%

departments or in management positions.

2.E Education Status %97 of respondents is higher education graduates.

• • •

Secondary School University: 76,5%

Master or PhD: 20,6%

3.G Do you regularly employ an intern in your company? %70.6 of the respondents state that they

•

Yes: 70,6%

•

Yes: 20,6%

•

No: 29,4%

regularly employ students for internship positions

5.H Are you having struggles finding an appropriate intern for your company?

•

No: 79,4%

%20.6 of the respondents claimed that they have problems finding interns.

We got different answers while we were investigating the companies’ application evaluation and search process.

5.F. How do you carry out the recruitment process (34 responses) Advertisement ...

17 (50%)

HR websites ...

20 (58,8%)

Employment off ...

25 (73,5%)

Referances and ...

10 (29,4%)

Other ...

0

12 (35,3%) 2

4

6

8

10

12

14

16

18

20

22

24

5.G. Which one of the following has a priority when you are evaluating applications (34 responses) Experienced candidates ...

19 (55,9%)

Experienced candidates ...

24 (70,6%)

Recently graduated ...

7 (20,6%)

Recently graduated ...

17 (50%)

Recently graduated ...

4 (11,8%)

Other ...

4 (11,8%)

0

2

4

6

8

10

12

14

16

18

20

22

24

%73.5 of the firms are leading the candidate search process in cooperation with İŞKUR or special employment offices, %58.8 of them are using portals like Kariyer.net and LinkedIn. We think that this information will give direction to our new graduates and jobseekers friends.

And then, we have asked the company representatives why it is hard to find qualified workers. Here are the answers;

5.I. Why do you thing firms have difficulties to find skilled worker?

•

Deficiencies of education system regarding to the needs of labor market: 35,3%

•

Deficiencies of on the job training caused from organizational changes i.e.: production process: 11,8%

•

Lack of information in the labor/job market: 11,8%

•

Other: 41,2%

Let’s see what the firms registered in the Eskisehir Chamber of Commerce think about the reasons of education-job mismatch;

5.K. What is the main reason of education-job miztmatch according to you?

•

Inadequacy of HR personnel to recruit proper candidate for proper position: 9,1%

•

Deficiency of coordination and communication between university and private sector: 12,1%

•

Lack of education polices for the demeands of labor market: 57,6%

•

Uniqualified graduates: 15,2%

•

Other: 6,1%

Firms would like to improve their employee’s "Business English", "Leisure Time Management", "Body language and Diction", "Social Responsibility" and "Active Computer Usage" skills.

6.A. Which of the following fields do you want your employees to develop themselves?

Business Engli…

12 (37,5%)

Effective leisure…

21 (66,6%)

Body language a…

17 (53,1%)

Social responsibil…

23 (71,9%)

Active computer…

7 (21,9%) 2 (6,3%)

Other 0

2

4

6

8

10

12

14

16

18

20

22

24

According to firms while recruiting an engineer or a manager, the outstanding features should be; "Education Level", "Work Experience", "Foreign Language" and "Personality (social responsibility, body language and diction and entrepreneurship)".

5.C. Please tell us which personal qualifications are important to you when you are recruiting a manager.

Not important at all

Not important

Moderately important

Important

Very important

22,5

15,0

7,5

0,0 Level of education

Work experience / Internship

Language skills

Personality (Social entrepreneurship

5.B. Please tell us which personal qualifications are important to you when you are recruiting an engineer.

Not important at all

Not important

Moderately important

Important

Very important

22,5

15,0

7,5

0,0 Level of education

Work experience / Internship

Language skills

Personality (Social entrepreneurship

While they are recruiting an administrative stuff, those are, "Education level", "experience", "foreign language", "personality" and also "age" and "references"

5.A. Please tell us which personal qualifications are important to you when you are recruiting an administrative personnel.

Not important at all

Not important

Moderately important

Important

Very important

22,5

15,0

7,5

0,0 Age

Referance

Exam scores

Sex

While administrative staff and engineers are recruited, their "test scores", "sex", "physical appearance" and "marital status� are not taken into consideration, the outward appearance is an important element while recruiting managers

5.B. Please tell us which personal qualifications are important to you when you are recruiting a manager.

Not important at all

Not important

Moderately important

Important

Very important

22,5

15,0

7,5

0,0 S覺nav skor...

Cinsiyet

Fiziksel g繹...

Medeni du...

Above, we have stated the definition of mismatch problem and the results of our demand-side-survey. While we were conducting surveys, we organized an HR training program with our project partner, Eskisehir Chamber of Industry. The HR personnel of some companies participated to a 2-day-training. In the training, the frequently asked questions and common mistakes about human resources departments were examined.

Due to their contributions to this bulletin, we would like to thank to Mr. Ismail Ozturk and Eskisehir Chamber of Industry. As we finish this bulletin, we wish you have a month full of self-development and personal discoveries.

Hope to see you soon!

EMLT Project Team

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