Strategic policy approach to skills (2)

The strategy is a global framework to help countries assess their national skills systems and evaluate them against international standards in order to develop policies transforming higher skills into better jobs, faster economic growth and greater social inclusion. Now I will focus on the skills issues facing Turkey, based on a skills profile compiled from recent OECD publications and other sources, in terms of the OECD's three “policy levers.”

I. The first policy lever is the development of relevant skills, and is aimed at ensuring, through targeted education and training, that the supply of skills is adequate to meet the current and emerging demand in terms of both quantity and quality. Turkey's education system, the foundation of skills formation, performs well below the OECD average. The Program for International Student Assessment (PISA) has evaluated the education systems of over 70 countries triennially since 2000 by testing the skills and knowledge of 15-year-old students shortly before the conclusion of their compulsory education. PISA tests how well prepared students are to meet real life challenges following school by measuring their knowledge and skills rather than how well they have learned the school curriculum. In the latest PISA tests, conducted in 2009, Turkey ranked statistically well below the OECD average in all areas, placed 41st in reading and 43rd in both mathematics and science out of 65 countries.

Adult Turkish citizens, as part of their lifelong learning, invest relatively little in non-formal education and training after their initial education to upgrade or add to their skills and keep pace with new technologies. In 2008 only 13 percent of adults participated in non-formal education, compared with the OECD average of 34 percent. Only 9 percent participated in job-related non-formal education, compared with the OECD average of 28 percent. In terms of expected hours in job-related non-formal education over a person's working life, Turkey was last out of the 25 OECD countries ranked in 2007.

Skills shortages, according to the results of ManpowerGroup's 2011 annual Talent Shortage Survey, were responsible for the recruitment difficulties of 48 percent of Turkey's employers, compared with the global average of 38 percent across 39 countries, and the Europe, Middle East and Africa (EMEA) region average of 26 percent across 21 countries in 2011. In the EMEA region Turkey ranked second after Romania, where 53 percent of employers had recruitment problems due to a lack of skilled workers. (However, according to the results of ManpowerGroup's 2012 annual Talent Shortage Survey, released last week, the percentage of Turkey's employers experiencing recruitment difficulties has dropped to 41 percent, compared with the global average of 34 percent and the EMEA average of 25 percent.) Towers Watson's October 2011 Turkey Talent Survey found that four out of five human resource professionals had difficulty finding and recruiting critical skill talent. They listed gaps in education, skills mismatch and inexperience in key areas, as well as rising demand for skills, as the major reasons.

II. The second policy lever, activating skills supply, is aimed at reintegrating inactive skilled workers into the labor force by offering financial incentives and removing demand-side non-financial barriers to their employment. There is significant scope to improve skill utilization in Turkey through greater labor force participation by both genders, but especially women, and across all age groups. In 2011, 62 percent of Turkish prime-age adults (aged 25-54) participated in the labor force, compared with the OECD average of 81 percent. The 35 percent participation rate for prime-age women was much lower than the OECD average of 71 percent. Only 33 percent of older adults (aged 55-64) participated in the labor force, compared with the OECD average of 58 percent.

III. The third policy lever, putting skills to effective use, is aimed at ensuring that available skills are used effectively, especially through matching the right skills with available jobs, so that no investment in human capital is wasted, keeping in mind unused skills tend to atrophy, while new skills are often developed informally through work experience. For Turkey's youth (aged 15-24) the transition from school to work is not smooth. In 2011, their 32 percent employment rate was much lower than the OECD average of 39 percent. Their unemployment rate, at 16.7 percent, was almost equal to the OECD average of 16.2 percent. (In the column “The global scourge of youth unemployment (2),” March 29, I noted that the youth unemployment rate in Turkey rose instead of falling as the level of education increased.) Recent research on skills mismatch suggests that in the OECD one in four workers may be overqualified and one in three underqualified for their job. According to data for 2005, though now outdated, 40 percent of Turkish workers were overqualified for their jobs, compared with the OECD average of 25 percent, but only 3 percent were underqualified against the OECD average of 22 percent.

Based on this profile, we can conclude that Turkey, where the demand for skills has risen rapidly as the economy has developed and expanded over the last decade, has great potential to extend its skills supply and to put that supply to fuller and better use. As recommended in the OECD report “Better Skills, Better Jobs, Better Lives: A Strategic Approach to Skills Policies,” realizing that potential requires a set of long-term and consistent education, social and labor market policies.