Companies, universities must collaborate on skills gap - study

Students attend class at the Bansal Classes in Kota, in Rajasthan, August 13, 2012.

LONDON (Reuters) - Companies should get more involved with university courses to close a skills gap and ease graduates' path to employment, according to a report on Wednesday.

Fewer than half of young people and employers believed that new graduates were well prepared for work, the study of data in a diverse group of countries found, a problem that may contribute to soaring levels of youth unemployment.

Higher education institutions, however, believed that nearly three-quarters of their leavers were ready for the workplace.

"Employers, education providers, and youth live in parallel universes," the McKinsey report found.

"They have fundamentally different understandings of the same situation."

The consultancy analysed education-to-employment initiatives from 25 countries and surveyed youth, education providers and employers in Brazil, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey, Britain and the United States.

Total unemployment among young people has risen to 75 million, according to the International Labor Organization, as the global economy has slowed and the debt crisis in Europe worsened.

Policymakers in several countries have debated how the shortage of skills has contributed to the figures. A study from the Chicago Federal Reserve Bank in June said there was little evidence the jobless rate was being kept high by a skills gap.

But nearly 40 percent of employers surveyed by McKinsey between August and September said it was a leading reason for entry-level vacancies.

The report split employers into three groups, based on their degree of involvement in the process of recruiting.

"Only one of them, accounting for less than a third of the cohort, is successful in getting the talent it requires," it said.

"What distinguishes these employers is that they reach out regularly to education providers and youth, offering them time, skills and money."

It said bosses, educators and students rarely communicated. This meant that universities found it hard to predict job-placement rates for their graduates, and young people did not know which subjects were linked to employment and good pay.

Moreover, only half of young people believed that paying for higher education would improve their chances of finding a job.

McKinsey said countries needed to review their education systems to see if employers in a particular industry seeking certain skills could work more closely with educators.

It said limited financial or staff resources, lack of hands-on training opportunities and employers' reluctance to fund training unless it is very specialised could all be barriers to better cooperation.

But these could be addressed by better use of the Internet for practice situations and to ensure consistency at a low cost and by introducing an improved standard curriculum that would be complemented by top-up training with employers. (Writing by Anna Willard; Editing by Will Waterman)