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Barriers and best practices to address APAC's skills gaps

Barriers and best practices to address APAC's skills gaps


There is a need for a comprehensive skills taxonomy that provides a common language and clear classification of skills, especially in emerging industries like sustainability where even essential competencies remain undefined.

Recovering from the effects of the pandemic and adjusting to a highly uncertain macroeconomic environment has led many APAC firms to rethink their business priorities, creating demand for new skills such as advanced digital skills and soft skills. In many sectors, digitalisation in the past couple of years has been so rapid that firms are unable to upskill their workers fast enough to cope with the changes, creating yawning skills gaps.

In fact, three-quarters of employers, government officials, and academics in Australia, India, Indonesia, Japan, Singapore and South Korea believe their country has a "significant digital skill gap", with employers facing difficulties in filling positions requiring advanced digital skills. The existing gaps are so large that an estimated 86mn workers (includes digitally skilled workers and non digitally skilled workers who are estimated to need digital skills training in the next year) would need to be upskilled or reskilled to keep up with the pace of technological change.

These insights are from the Bridging the skills gap: fuelling careers and the economy in Asia-Pacific report from Economist Impact, supported by Google. It contains insights on reskilling and upskilling in 14 markets in the region, derived from desk research, a primary research survey (of 1,375 employees across APAC), and interviews. Markets covered include: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Pakistan, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

With the above data in mind, critical challenges were found to be posing barriers to upskilling and reskilling, including employee uncertainty about the skills needed, lack of time, the high cost of courses, and a lack of opportunities to apply skills. Here are some useful takeaways on the barriers, and best practices to tackle them, from the report.

A clear taxonomy can enable skills-based hiring by mapping each skill to a job role

Employees lack clarity on the value of skills - a clear and comprehensive classification can address this issue. In the survey, 56.6% of employees agreed that they generally have a poor understanding of skills needed in the market. Employers are not using detailed data to determine the relevance of specific skills for particular job roles or the premium that a particular skill commands in the market, cites one interviewee. "If you need employees to own their learning, remember that nothing changes employee behaviour more than compensation, yet most of the skills premium data available today is scarce and inaccurate."

Another interviewee underscores the need for a comprehensive skills taxonomy that provides a common language and clear classification of skills, especially in emerging industries like sustainability where even essential competencies remain undefined. The National Institute of Economic and Social Research in the UK, for example, uses natural language processing technologies to collect and analyse data from online job advertisements in order to identify and group similar and distinct skills and classify them to create a skills taxonomy. This skills taxonomy can then be used to develop a playbook for organisations.

While existing qualifications are a core focus for hiring firms, one Asia-based recruiter suggests that companies can close skills gaps by including “potential” as a key assessment metric—in other words, “hiring candidates who demonstrate learning capacity and passion”. 

Targeted short programmes can facilitate the effective use of employees’ time

Lack of time is the biggest hurdle to learning a new skill (regardless of skill type), as most employees juggle long working hours and caregiving responsibilities. Another issue the survey highlighted is the lack of targeted training programmes. One interviewee explains that “the one size fits all qualification is too simplistic, does not meet the needs of a diverse range of learners and will not generate the numbers needed.” The lack of suitable training programmes in organisations is concerning, as the survey suggests that APAC employees largely rely on workplace training to acquire different skills.

When employees do undergo training, they are unsure about how to apply their new-found skills. This survey revealed that about a fifth of employees, depending on the type of skill, identified a “lack of opportunities to practise the skills learnt” as one of the top three challenges to learning new skills.

Evidently, it has become an economic imperative to ensure that both high-skilled and low-skilled workers have access to training and opportunities to remain competitive throughout their working lives. Training providers and employers can support lifelong learning by providing short-term, specialised courses and microcredentials—that is, online certifications focused on a particular area of expertise—which are becoming more commonly accepted.

Financial incentives could motivate employees to upskill and reskill

Survey respondents pointed to the high cost of courses as the second biggest challenge in acquiring new skills. However, a majority of employers do not plan to significantly increase their investment in lifelong learning, although most believe that the success of their organisation will depend on continual reinvention of the workforce.

Experts argue that this lack of investment could be a result of employees changing jobs frequently, which means that employers repeatedly incur the costs of hiring and training new staff. This challenge is especially significant for small and medium-sized enterprises (SMEs).

As such, government subsidies could be one of the motivations for acquiring new skills particularly green skills. Governments can also help to fill SMEs’ funding gaps by deploying capital through initiatives like Cambodia’s Skill Development Fund, which covers three-quarters of the cost of training needed to address a specific skills gap identified by the private sector.

Meanwhile, organisations can embrace skills-based compensation by creating new financial incentives for employees to reskill or upskill, especially in cases where employees are taking the initiative to self-learn new skills. 

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Lead photo / Report from Economist Impact

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