Addressing the Middle East's growing skills mismatch

18 January 2021 3 min. read

The Middle East has a significant skills mismatch to resolve, particularly when compared to other key markets across the globe. A new Boston Consulting Group (BCG) study provides analysis, tools and recommendations to overcome this growing menace.

A key distinction drawn by the report authors is between ‘skills gap’ and ‘skills mismatch.’ The former has been in headlines for years – describing a lack of talent available to meet future business roles, mainly in the all-encompassing field of emerging technology.

To address this gap, businesses worldwide opt to hire people with an irrelevant skillset and train them on the job. A two-pronged challenge results, where employers are spending time and money on training while employees are stuck in a job for which they never set out – a skills mismatch. According to BCG, more than 1.3 billion people around the world are currently either overqualified or underqualified for their job.

BCG Future Skills Architect Framework

And the costs are just as remarkable. In 2018, the skills mismatch cost the world $8 trillion in unrealised GDP owing to productivity loss. If unchecked, this figure could amount to $18 trillion by 2025. Action is the order of the day, and Boston Consulting Group has laid out a framework to plan the way forward – labeled a Future Skills Architect (FSA).

A guideline for governments, policy makers and businesses: FSA evaluates countries based on three pillars of a healthy workforce – capabilities, motivation and opportunities. Capabilities include fundamental skillsets required for current and future jobs, as well as the capacity to evolve these skills for future demands.

Motivation includes the opportunity to self-actualise and reach full potential, as well as a work environment that recognises individual needs, abilities and ambitions. Opportunities cover equal access to jobs, irrespective of age, background, personal characteristics, nationality or even location.

Middle East skills mismatch

As a benchmarking exercise, BCG applied FSA to four regional stalwarts across the world – Auatralia, Germany, Saudi Arabia and Russia. As a regional representative for the Middle East, Saudi Arabia fell short of the global average on key metrics such as skill sets, employability, human-focused environment and equal opportunities. Only in the self realisation space did Saudi Arabia perform above average.

Middle East skills mismatch

The Middle East as a whole is marginally better. The region touches the global average with respect to skill sets and self-realisation. When it comes to inclusivity, the Middle East is well in line with the global average for equal access irrespective of nationality and location, although the performance is dismal when it comes to personal characteristics such as age and gender – labeled as ‘market inclusivity’.

According to BCG Managing Director and Partner in Dubai Leila Hoteit, the UAE is among the stronger markets in the region, ranking well about the global average in the FSA evaluations. That being said, the region as a whole has work to do – made even more urgent by the Covid-19 pandemic and its adverse impact on employment and economy around the world. Hoteit urged that governments keep the bigger picture in mind for their next steps.

“Although governments and businesses are aggressively tackling pandemic related short-term employment challenges through retention and redeployment of the workforce, they must also work together on reskilling to meet future needs, make opportunities visible, and provide the right context for people to be motivated.”