Let’s be clear: Skills mismatch is not an emerging markets problem. It’s universal and affects both wealthier parts of the world – whether the United States or the European Union – and emerging markets. In a way, it’s more visible in industrialized economies, thanks to their comprehensive labor market statistics. In developing countries, we have to rely on the anecdotal evidence from company managers and the unemployed.
At Tupperware Brands, we have a good overview of the problem, thanks to our sales force of 3 million people across almost nearly 100 countries. For us, two facts stand out: first, in emerging markets the mismatch of skills is a particularly huge problem; second – and that’s the upside – tackling the skills issue in these countries pays unusually large dividends.
When we think about skills mismatch, it’s important to understand that this not just a problem for the unemployed. If you have a job, but you’re over- or underqualified, it will make you an unhappy, less productive worker; it will stunt your career development. The scale of the problem becomes obvious wherever you zoom in: take Turkey, where about a third of all employees have a higher qualification than their job requires. Or look at Nepal’s trekking industry, where many mountain guides and even some porters are university graduates (and April’s terrible earthquake may have destroyed even this job opportunity).
For people without a job, meanwhile, not having the right skills is likely to push them into a downward spiral of long-term unemployment.
Young people, however, arguably suffer the most: every year that they fall into what the British call the “NEET” category (not in employment, education or training) increases the long-term damage to their economic potential. That’s why we should be really worried by the fact that youth unemployment is rampant in both industrialized and emerging economies.
It would take a book or two to list all the reasons for the global skills mismatch; they are distinct in every country and culture. Fundamentally, though, it usually comes down to a clash between the output of the education system and the needs of the labor market.
And in my experience, business can help to tackle the problem successfully by following two basic strategies:
Invest in education
Here’s a seeming contradiction: How can it be that around the world there are 201 million people out of work, while at the same time employers worry about a shortage of employees with the right skills and list the “war for talent” as one of their biggest concerns?
What we and many other companies find is that many education systems simply fail to equip their students with the basic technical and personal skills that are needed to succeed in business. Some employers says that schools and universities educate the graduates of tomorrow in the skills needed in the industries of yesterday.
That’s true in many places, but I believe that this is also a call for action to us as business leaders. We can’t sit back and wait for education reform. Companies need to help schools and universities to get the skills mix right. A university degree is not the answer to all skills problems. A modern and entrepreneurial technical training may equip workers with much better and more market-ready skills.
Companies themselves need to step up and invest in education, by offering training, apprenticeships and more. When I hear companies complain that there are not enough skilled workers, I want to challenge them: have you looked at your own workforce and tried to find the raw talent? Have you given them the right training and skills – and have you then nurtured and coached them to success?
Recruit more women
The vast majority of Tupperware Brands’ sales force – across all our brands – are women, and based on that experience I am certain: any company or country that ignores the huge potential and promise of bringing women into their labor force immediately puts themselves at a disadvantage.
How can we succeed in the war for talent, when we keep roughly 58 million girls out of school worldwide? How can a country like India unlock the huge potential of its people, when many girls are taken out of education after primary or secondary school, and when we see a sliding scale of decreasing skills as we move from the country’s largest urban centers to Tier 2 and Tier 3 cities?
Once again, business has to step up to the plate, generate demand and recruit more women. In many of our markets we see this slowly happening, especially thanks to large manufacturers, and IT, BPO and KPO companies.
Doing this is not just about gender equality, it’s about good business sense.
I’m speaking from experience. For Tupperware Brands, recruiting and training women has consistently delivered exceptionally good returns, because it unlocks an economic potential that triggers a virtuous cycle of investment in the community. That’s because women on average simply reinvest more into their business, spend more money on their family and invest more in the education of their children.
Bringing more women into the workforce provides an instant kick start to any economy.
Three tools for better skills
Every country, every business will list different skills that are most in demand and not met.
However, there are a few skills that are universally in short supply, and we at Tupperware Brands know that with the help of three tools, these skills can be taught. When people join our workforce, we give them 1. training, 2. coaching and 3. micro finance.
The impact – both in terms of economics and personal skills – is so startling that we asked the Global Fairness Initiative to measure it. This non-profit organization, based in Washington D.C., interviewed thousands of people in Mexico and Indonesia, and the results were the same everywhere. Thanks to the training and mentoring, our sales people gained hugely in confidence, and problem solving and communication skills; that increased their income sharply, which in turn boosted their standing at home and in their wider families.
All taken together triggers a virtuous circle of reinvestment and spending power.
Most importantly, this investment in today’s workforce will be paid back for generations to come. Take Mexico, where 50 percent of the Tupperware Brands sales force reported that they had doubled the spending on the education of their children, which will contribute to avoiding the mismatch of skills in the future.
Of course, this works for other businesses as well.
Take Unilever and PriceWaterhouseCoopers, for example. Both Paul Polman and Dennis Nally have joined me in UNWomen’s HeForShe movement as corporate impact champions to ultimately achieve gender equality at the diverse organizations that each of us leads.
We as business leaders have to invest in the training of our employees; we can’t expect education systems to serve us perfect staff on a silver platter. And we have to broaden our workforce by including more women.
Most importantly, we have to ensure that our training goes beyond technical skills. We need people who are confident, entrepreneurial and can solve problems. Giving them these fundamental skills will go a long way to address to matching the skills of the workforce with the needs of business – whether in industrialized or emerging markets.
The Human Capital Report 2015 is available here.
Explore the report by using the heatmap below:
Author: Rick Goings, CEO, Tupperware
Image: A woman uses a computer in a Federal Labour Office job centre in the western German town of Essen. REUTERS/Kirsten Neumann