Strategies for the new economy: Skills as the currency of the labour market

Summary

The qualifications achieved in schools, colleges and universities, the prestige of an educational institution or an employer, the social networks of a potential job applicant are the signals currently used to indicate potential fit between individual capabilities and job opportunities in the labour market. Yet, today’s labour market is more inefficient than ever. There are three key why a suboptimal system of skills proxies tends to contribute to both labour market inefficiencies as well as social inequalities. s.

First, learning and employment ecosystems are currently built for a world of work that is no longer a reality. They are premised on the assumption of linear careers largely using a traditional life model of ‘learn, do, retire’. Second, large-scale changes to job and skill demand in the Fourth Industrial Revolution (4IR) are bringing fresh challenges to an already struggling system for identifying job-fit and matching individuals to opportunities. To remain relevant and employable, workers are faced with the need to re-evaluate and update their skillsets. Third, today’s proxy-based system of determining job-fit often exacerbates socio-economic inequalities. For example, success in formal education remains one of the strongest predictors of long-term socio-economic inclusion and has a demonstrable negative knock-on effect on social cohesion.

Shifting to a system where skills are the core currency of the labour market thus has the potential to tackle existing inefficiencies in job-fit between employers and employees. Such a shift would no doubt be challenging, requiring collaboration and coordination across multiple stakeholders. In this white paper is suggested 10 strategies to make this vision a reality.