Skill Shortage in Labor Market and COVID19: Some Policy Recommendations

Talent shortage is defined as having lack of skills to do a work and considered as one of the most important reasons of unemployment in many countries. According to the Manpower Group’s statistics global talent shortage has increased significantly in the last decade1 (Figure 1). The main reason behind this trend is the widening gap between skills needed at work and current skill set of labor force. Specifically, we observe a rapid digitalization and automation of production processes at work. However, skill set of current labor force do not change at the same phase to adopt new environment. The unavoidable result is the evidence of skill shortages across countries (Figure 2). Interestingly, this is not only the problem of developing economies but also problem of advance economies as well. In addition, a report published by the World Economic Forum argues that one third of skills required to find a job will change in the near future2. This implies that this problem will intensify further in the near future.