Norway: Over half of companies surveyed report skills shortages

The Competency Barometer is a survey of skills demand among the member companies of Norway’s largest employer organisation, the Confederation of Norwegian Enterprise (NHO). The results are derived from the answers of approximately 5,300 companies, representing different company sizes, sectors, and industries. In a working paper published by the research institute NIFU, the findings are analysed and summarised. Overall, the paper found that a majority of firms have an unmet demand for skills.

Purpose and methodology

The purpose of the research was to map the current and future skills demand within NHO’s member companies. NHO represents approximately 23,000 businesses, and embodies 15 regional associations and 20 national associations. Skills demand has become an increasingly hot topic for NHO, which has pushed for greater coherence between education policy and companies’ needs for a qualified workforce.  In view of this, the survey acts as a tool to explore current skills demand in companies and to reveal the anticipated skills demand for a five-year period.

The survey was conducted by The Nordic Institute for Studies in Innovation, Research and Education (NIFU), in close collaboration with NHO. NIFU is an independent social science research institute, whose main field of study involves education, research and innovation, and statistics and indicators. NIFU used electronic survey tools to gather data and all companies surveyed were sent the same questions.

The survey was undertaken in February and arch 2014 and was sent to chief executives, where possible, or to the company administration. Altogether, 17,013 companies received the survey, and 5,523 replied. The final results were based on a relatively even distribution of firms of varying size, national association adherence, and region, and, while not representative of the overall business sector in Norway, it is representative of the NHO membership (which constitute a significant portion of Norway’s businesses). This was the first time the survey was conducted, and it is planned to be repeated annually.

The overall purpose of the study was to map the skills demand in NHO member companies, and the survey explored five aspects of the topic, each representing a different solution to the problem of unmet needs for skills. These were:

  • skills demand and recruitment;
  • skills demand according to profession and education, both today and in five years;
  • emphasis on skills, abilities, and attitudes;
  • collaboration between school/education and business;
  • companies' views on the need for graduate qualifications.

Unmet skills demand

Of the 5,523 NHO member companies that replied, the survey showed that nearly 60% had an unmet skills demand. Just over half  had an unmet demand 'to some extent', and 7% reported the demand to be great.  

Four out of ten companies reported that the skill shortages were so severe that they had failed to expand their businesses or had lost customers or market share. About 20% reported that they had reduced operations due to the problem.

Of the companies that reported an unmet skills demand, 85% stated that they would meet this deficiency by raising the competence and skill level of their current staff. Two out of three also planned to hire employees. This is a widespread strategy within the energy and oil and gas industries, but less so in less knowledge-based industries.

Difficulties in recruiting

Just over half of all NHO member companies reported that they had difficulty recruiting qualified workers, while 15% reported that they had 'great' difficulties recruiting sufficiently skilled employees. These problems in recruitment are spread relatively evenly within NHO’s national associations.

Careers and education

The survey also mapped companies’ needs in relation to careers and education. The majority of companies reported a great need for employees with professional education in natural sciences, engineering, and crafts.

Answers in terms of occupational groups suggest that the need for scientific expertise mainly pertains to engineers, craftsmen and technical skills. 

More than one-third of companies stated that they had a great need for skills at the secondary school level, or for employees with craft certificates. Next to this is graduates, for which there is a weaker demand. Very few companies reported being in need of employees with doctorate-level degrees (though there are significant differences in terms of demand at the level of the national associations).

Of the approximately 1,450 companies that employed a person with a master’s degree within the last three years, half assumed that a person with a bachelor’s degree could have performed the task equally well. However, very few companies stated that someone with less than a master’s degree had performed their assigned task better.

Transversal skills

The survey also mapped demand for transversal skills and attitudes. As much as 63% of the companies surveyed reported that being able to speak Norwegian was of great importance for any new employee, while 42% said the same about the ability to write in Norwegian. ICT skills, numerical competence, and technological understanding were of lesser importance, although these still carried some weight.

About half of the companies reported that it is of great, or some, importance for employeeds to be able to communicate in a foreign language. Of these, English is the most important, followed by German, Polish, French and Spanish.

The abilities to cooperate and to complete tasks were the most important attributes, in terms of hiring new employees. Ethical awareness and creativity were the two properties that were the least emphasised by the firms.

Commentary

The Competency Barometer is an important step to mapping the skills needs of companies. Although the survey is not representative of all companies in Norway, the size of the survey does provide a good overview of the skills demand in NHO companies, which represent a significant portion of Norwegian business.

Furthermore, the results of the survey were clear, whereas there is a generally high skill demand amongst the NHO-companies, and especially for engineers and persons with science degrees. The low demand for postgraduate degrees was also noteworthy, as well as the widespread perception that the employees with bachelor’s degrees could perform the current tasks of those with postgraduate degrees.

This, as the report points out, may indicate that those with such degrees are either overqualified or underutilised. In this first iteration of the survey, the implication of such data is still unclear.

The survey also signified the importance of those with high school degrees and college certificates, as those groups had the highest demand. Overall, these findings can provide a basis of knowledge for wider discussions in terms of education policy in relation to business and existing skills demand. 

Source: Solberg, E., Rørstad, K. Børing, P. & Carlsten, T.C. (2014) Kompetansebaromteer for NHO-bedriftene. Hovedresultater fra en undersøkelse om kompetansebehov blant NHOs medlemdsbedrifter I 2014. NIFU Arbeidsnotat 7/2014.

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