Bridges to employability

Employment figures here in Malta are more than encouraging. Both employment figures and unemployment statistics show that Malta has reached record levels and the performance and rating in the EU, for both statistics, is at the top of the class. However we need to maintain this momentum and we must focus on the types of jobs and not just on rates of employment. The publication of the employability index is the launching pad for the future, to ensure that we can keep up with the skills sets that meet the demands of current and future needs.

The Europe 2020 strategy is about delivering growth that is: smart, through more effective investments in education, research and innovation; sustainable, thanks to a decisive move towards a low-carbon economy; and inclusive, with a strong emphasis on job creation and poverty reduction.

Malta’s original National Employment target established in 2010 was set at 62.9 per cent for the 20-64 age cohorts, to be reached by 2020. The employment rate has been steadily increasing since 2009 and the national employment target was not only reached but exceeded in 2012, standing at 63.1 per cent.

In view of this, Malta has revised its employment target upwards from 62.9 per cent to 70.0 per cent. It is the role of policymakers to investigate the type and quality of employment being created, especially since this analysis provides a clearer picture regarding the extent to which Malta’s main factor of production – human capital – is being exploited.

This aspect is particularly significant for higher education institutions, since the human capital they are meant to create does not only induce a private opportunity cost to the student, but it is also an outlay of public funds borne by the entire working population.

Thus the phenomenon of underemployment is similar to a low return on capital employed, where investment does not reach the expected levels of performance.

There are two types of mismatches: horizontally mismatched is where an individual is employed in a job that matches their level of education but not their field of education (i.e. qualified/sector mismatch); on the other hand, vertically mismatched refers to an individual who is employed in a job matching their area of study but not their level of education (i.e. overqualified/sector match).

To address such skills gaps the Maltese government has announced a number of strategic actions which were addressed through the preparation of this employability audit. The benefits of the Employability Index were highlighted in Malta’s National Reform Programme to offer more guidance to students on the choices of jobs that are available for the various lines of studies by indicating to the student the potential of finding a job within the line of study being chosen.

Tertiary and Vocational education are equally important. Over the years Tertiary educational attainment among the 30-34 year olds increased from 17.6 per cent in 2005 to 26.6 per cent in 2014. This increasing percentage is still lower than the EU28 average, but it is recognised that Malta is registering significant developments and it is expected that by 2025, 39.0 per cent of the Maltese labour force will have high qualifications.

The provision of vocational education is leading to a boost in levels of employability. Individuals with a VET background are more matched compared to those with a non-VET or mixed qualification and this addresses the importance of helping young people maintain the link with the labour market and gain useful work-relevant skills. Malta show that the number of students enrolled in vocational education in 2013 is still low when compared to that of other EU countries (Malta 11.8 per cent, EU average 50.4 per cent).

Malta, as in European states, is facing a highly ageing population which requires a high degree of replacement due to the withdrawal of older workers from the labour force.

The employability index will guide our youths to the attainment of the skills sets necessary to counteract the shortage that will be created when we need to replace the many older workers who will reach retirement age in the next few years.  Many of the jobs created up to 2020 will require medium-level qualifications (including many vocational qualifications) and jobs at this level will continue to employ half of Europe’s labour force.

The employability index conceptualises the various relevant aspects of workers’ employability and integrates these factors in a synthesized index which enables us to make comparisons between the employability of the workforce in the various sectors of industry. We are trying to bridge the gap between education and labour market demands through the enhancement of the quality of education and by raising participation levels not only at tertiary levels but also at secondary level.

This strategy would increase the probability of having more young individuals opting to continue their studies and furthering their education after completing compulsory education.