One of the most effective ways to fight poverty and boost economic development is through job creation. About 200 million people are unemployed globally. As a result of demographic shifts, there will be a need for 600 million new jobs over the next 15 years to keep current employment rates stable, particularly in Africa and Asia. At the same time, many companies cannot fill positions because applicants lack the right skills, especially in developing countries.
The “skills gap” constrains economic and social development, limiting the ability of individuals to get jobs and improve their living standard; of companies to improve productivity, competitiveness, and growth; and of countries to reach their potential. Particularly in developing countries, the private sector needs to play an active role in closing the skills gap. The public sector—especially education systems—is often too stretched.
Many companies are stepping in to fill the void. A South Asian food, fertilizer, energy, and petrochemical company has cofounded a technical-training college that offers both three-year diplomas and six-month vocational training and provides agricultural-training courses to thousands of small-farm owners. The company also trains women to become milk collectors and agricultural extension workers, opening opportunities in historically male-dominated rural areas. To give back to the community and to improve community relations, the company invests in the education systems in locations where it makes fertilizer, which can be hazardous to produce.
Closing the skills gap requires a combination of various measures. Some are small: when, for example, JMS, a Bangladeshi textile company, started to provide free sanitary napkins, absenteeism fell significantly. Others demand investment. Ohorongo Cement, a Namibian company, set up its own training center to prepare people for jobs as control room operators—for whom there is high demand in the country.
Skills development in the private sector benefits not only the company but also its employees, whose living conditions and job prospects improve, and society, which benefits from the improvements in overall well-being, purchasing power, and tax revenues.
The correction of the skills gap is too important to leave to chance. We have developed a three-level approach to closing the gap: in individual companies, along the value chain, and in the local community. This practical and hands-on approach, which is well suited to small and midsize enterprises in developing countries, consists of the following:
- A user-friendly guide for practitioners that details a six-step approach for recognizing and closing skills gaps
- A collection of proven examples showing how companies close these gaps on the three levels
- An assessment tool that helps companies anticipate potential returns on their investment