Education and The Future of Work
Newsletter #1
June, 2021
Dear {{Recipient.FirstName}},

Welcome to the quarterly newsletter of the Education for Jobs Initiative.


Youth unemployment, skills gaps and the future of work.
The economic crisis caused by Covid-19 is having profound negative effects on employment and, in particular, youth employment. The sudden contraction  of economic activity generated by the pandemic has had two direct impacts on youth employment around the world. The first is the termination of internships and temporary work contracts, which are major engines of job destruction when economic activity slows down. The second is a freeze on hiring university graduates or graduates of vocational programs. The effects of these setbacks will last until uncertainty surrounding the evolution of the pandemic is substantially reduced.

However, the precariousness of youth employment in countries such as France, Italy,  or Spain is a perennial problem that predates the health crisis. The global pandemic has reinforced some factors at the root of the problem. The skills gap among young people is the result of the poor adaptation of professional training and college degrees to the real needs of young people, companies and society. The global pandemic and the rise of WFH (work from home) as enabled by technology has widened the skills gap in most countries.

This gap is a bigger problem in countries that lack a strong tradition of collaboration between educational institutions and businesses. It can become particularly large in times of steep technological change, automation of production processes, accelerated innovation and a disintegration of value chains that push companies to specialize and improve efficiency. The slow adaptation of educational goals and outputs to professional needs and insufficient collaboration between educational centers and companies leads to a greater skills gap, which complicates the sustainable creation of youth employment.

Governments also need to play a role in solving this problem. They should not try to plan every single program or degree for the simple reason that they do not have the right information to do so. But they should offer some flexibility to educational centers –within a well-defined set of standards--to adjust to the realities of companies’ demands, encourage collaboration between educational centers and companies, and offer some contracts that encourage companies to invest in the education and development of young graduates.

The recent IESE report The professional skills of the future: An action plan for youth employment in the post-Covid-19 world highlights some aspects of the youth employment crisis. The first is that 83% of the companies surveyed –118 large companies in 15  industries– have serious difficulties in finding young graduates due to the candidates' lack of professional skills. The alarming reality revealed by this data is that there is  high youth unemployment,  and the companies that want to hire do not find candidates with suitable professional profiles.

The second striking fact of this study is that 70% of companies fill their new jobs with university graduates, regardless of whether university  education  is necessary for those jobs. In other words, the university degree offers the company that hires a greater guarantee of employability than a vocational training cycle or an alternative educational itinerary. This reflects the limited progress in improving vocational training  in recent years, despite the huge public  resource allocation to it in the EU.  It also highlights the enormous  financial effort needed for society to support educational systems and how it hinders results.  This situation also  illustrates a level of frustration for those university graduates who end up developing professional tasks for which university  education  is not required.

The third observation  is that companies perceive that the skills gap will grow in the next three years  unless effective measures are taken to help young people improve their professional competences. The main  reason is the acceleration of digital transformation, and the automation and robotization of industrial and service processes. These will create new opportunities, but it will also destroy traditional jobs.

The outlook is not encouraging, but there are  some encouraging signs to note and steps  that need to be considered  to meet these challenges with determination. The first, already underway in some European countries, is to better facilitate collaboration between educational centers and companies in order to tackle this challenge. The second is that more than 90% of the companies participating in this study indicate that collaboration between educational centers and companies is essential and feasible, and that these companies express their willingness to collaborate even more closely on tackling this enormous challenge. The third is that governments can use EU funding for these new vocational programs in  a more effective way.

Creating  youth employment is a huge social undertaking, but is society's duty to help future generations. Experience shows that it is not easy, and facing it requires profound determination to seek broad consensus and promote public-private collaboration in diagnoses and action plans. The  Covid-19 crisis   is a deafening call to companies, educational centers and companies to awaken magnanimous attitudes, develop effective policies, and place  the common good and good young people above partisan interests.
by Jordi Canals

Education for Jobs Initiative, Director
IESE Foundation Professor of Corporate Governance
Recent Reports and News on Education and the Future of Work
Labour market responses to the COVID-19 crisis in the United States and Europe
(April 2021) CEPS analyzes the impact of short-term work schemes on employment.
What´s next for America post COVID-19 workforce
(March 2021) PwC presents the Workforce Pulse Survey findings on employee priorities.
Decoding global ways of working
(March 2021) BCG analyzes the change in work models and shifting worker preferences.
The future of work after COVID-19
(February 2021) McKinsey assesses the lasting impact of the pandemic on labor demand.
FUNCAS presents the 166 number of Papeles de Economía Española, on human capital and the digital economy
(January 2021Several authors discuss education, skills and the digital economy, as well as the impact of COVID-19 on students learning.
Read more         (only Spanish)
Upskilling for shared prosperity
(January 2021In collaboration with PWC, the World Economic Forum highlights skills mismatches.
Pandemics and automation, will lost Jobs come back?
(January 2021The IMF analyzes empirically the impact of past major pandemics on robot adoption, productivity and inequality. 
Labor market and wage developments in Europe
(December 2020The European Commission discusses how labour market has been impacted by recession.
These are the top 10 job skills of tomorrow – and how long it takes to learn them
(October 2020The World Economic Forum analyses skills of tomorrow and reskilling needs.
The future of work: lessons from a pandemic
(October 2020Key considerations from KPMG for Financial Services companies to attract and retain talent. 
The professional competences of the future: a diagnosis and an action plan to promote employment after COVID-19
(July 2020) IESE provides a company perspective on the professional skills demanded in the future.
Read more         (only Spanish)
How automation, migration and COVID-19 are shifting the geography of employment in Europe
(June 2020McKinsey examines profound trends that impact employment.
Workforce strategies for post-COVID recovery
(April 2020Deloitte shares insights for organizations to accelerate recovery after COVID-19.
Almost 40% of workers think their job will be obsolete within five years
(April 2021) More than 32.000 workers´ perceptions about job security, reskilling and remote work.
Reskilling, key for the future of jobs
(March 2021) 17 million workers may need to change occupations by 2030.
Most pressing people questions
(February 2021Some effects of remote work.
AI jobs revolution
(February 2021Automation and innovative technologies threaten some jobs, but we can reskill for new ones.
IESE's Recent Research on the Future of Work
BIEGER, C., ÁLVAREZ DE MON, S., GARCÍA-LOMBARDÍA, P. (2021). The challenge of vocational training in Spain. Report.
Read more    (only Spanish)
LAS HERAS M., M., GIFRA, J. (2021). A Sustainable Work Model: Towards Remote and in the Office Work. Report. 
RODRÍGUEZ-LLUESMA, C., GARCÍA, P., PINTO-GARAY,J. (2021). The digital transformation of work: A relational view. Business Ethics: A European Review, 30(1), 157-167.
LAS HERAS M., M. (2020). The Future of Work. Report. 
Read more      (only Spanish)
REICHE, S., MENDENHALL, M.E., SZKUDLAREK, B., OSLAND, J.S. (2020). At the Heart and Beyond. What can global leadership researchers learn from perspectives on the COVID-19 Pandemic?J.S.;Szkudlarek, B.; Mendenhall, M.E. and Reiche, B.B. (Eds.), Advances in global Leadership (pp- 261-282). Bingley: Emerald Publishing Limited. Book Chapter.
HOLTSCHLAG, C., MASUDA, A., REICHE, S., MORALES, C. (2020). Why do millennials stay in their jobs? The roles of protean career orientation, goal progress and organizational career management. Journal of Vocational Behavior, 118, Article 103366.