Latvia: Mismatch priority occupations
Summary
ICT professionals belong to high shortage occupations for Latvia.
Looking at past, current and future trends (3-4 years), a number of occupations have been identified as high mismatch for Latvia, i.e. they are either in shortage of surplus. Shortage occupation: an occupation that is in short supply of workers, and for which the employers typically face difficulties finding a suitable candidate. Surplus occupation: an occupation for which there are plenty of suitable workers available but low demand. The employers have no problems filling such posts.
The list below is based on an assessment of the labour market of Latvia. The occupations presented are not given any rank. All of them present high mismatch.
Shortage Occupations
ICT professionals
Turnover of enterprises in the ICT sector has grown by approx. 5% per annum since 2010 . The ICT sector currently accounts for 4.5% of GDP . There were approx. 11 thousand ICT professionals in 2014 and the demand for them will grow to 14 thousand by 2020 according to estimates of the Ministry of Economics . The growth of demand is the result of the ICT sector expansion; replacement demand is not high because those employed in ICT occupations are relatively young . At the same time, the education system fails to respond appropriately to the new developments while the quality of ICT studies is not considered as sufficiently high . In addition, many students do not always acquire maths at school at the level which is necessary for successful ICT studies at university level, hence, many students cannot follow the programme. Finally, studies in ICT are not perceived as attractive; the majority of students choose social science, business and law studies. Although the number of ICT graduates has increased in recent years, the shortages (in supply) are likely to persist . Finally, there is high global demand for ICT professionals. As wages in Latvia are lower than in the majority of EU Members, some ICT professionals have emigrated . This also decreased the supply of ICT professionals in Latvia. Multiple employer surveys of the Public Employment Service (PES) show that ICT skills have been considered as a key competence.
In response to shortages in supply, the government of Latvia has increased the number of publicly-funded study places for students in technology and mathematics . In 2013 the Ministry of Economics, in cooperation with other ministries, introduced a “Remigration Support Measure Plan” . The aim of the plan was to support Latvian nationals and their families living abroad in returning to Latvia, as well as those who wish to open businesses in, or maintain business ties with, Latvia. The key activities of the plan include: sharing labour market information with emigrated citizens of Latvia; attracting highly qualified people who went studying abroad; fostering learning of the Latvian language abroad; and simplifying, as well as providing financial support for, the repatriation procedure. There is no hard evidence about the impact of Remigration Support Measure Plan. The resources allocated were insufficient to implement the plan effectively . Preparation has begun to start teaching ICT in primary school. Starting from the 2015/16 study year, the piloting of computer science subject programmes has been launched in 157 educational institutions. Piloting will be carried out over the three years to 2018. For people who are registered unemployed, PES provides vocational training in programmes for Computer Systems technician, Hardware diagnostics, Repair and software installation, and Computer network administration. PES also provides non-formal training related to computer courses. Within EU funds planning periods 2004 – 2006 and 2007 – 2013, general education institutions received support for improvement of separate infrastructure elements and ICT equipment. This support was aimed mainly at 10-12 grade pupils. The Latvian Information and Communications Technology Association is implementing many measures to make the ICT professions more attractive (e.g. implementing projects, organising conferences, etc.). Given that a strong ICT sector could increase the exports of high value added services, the shortage of ICT professionals may hinder the economic growth of the country.
Engineers
The sectors which employ the majority of technically and scientifically trained people in Latvia are the mechanical engineering and metalworking as well as the electrical engineering and electronics sector. Engineering sector companies are usually export-oriented and are creating unique, high value added products . In addition, by using the EU structural funds many companies purchased new, advanced and up-to-date machinery and equipment. Hence, there will likely be a significant demand of highly qualified engineers by 2020. For example, in 2014 there were 45.8 thousand science and engineering professionals and associate professionals. The supply of science and engineering professionals will increase by more than 20%, but there will still be a shortage of at least 1.5 thousand specialists by 2020 . High replacement demand contributes to this shortage . One of the main reasons for shortages is the fact that studies in engineering have lacked popularity. According to the Ministry of Education and Science, fewer graduates took physics and chemistry abitur exams (final exam while graduating from upper secondary education, which gives access to a university or Initial Vocational Education and Training (IVET) schools) in 2013 as compared to 2011. Low popularity of these subjects could be the result of outdated infrastructure and teaching methods in schools . In addition, many students who succeed in their studies look for opportunities abroad, attracted by higher wages and a greater appreciation for their skills . According to the evaluation of higher education study programmes , life sciences, physics, mathematics and engineering study programmes are of sufficient quality and are able to prepare good specialists for the labour market.
In June 2015, the Cabinet of Ministers reviewed an information note with an overview of the planned actions and activities to improve the quality of STEM education and increase the supply of STEM specialists. These activities included: further improvement of the content of mathematics and natural sciences subjects; development and introduction of an education quality monitoring system; modernisation of the learning environment; and other measures covering all levels and types of education. In response to shortages in supply, the Government increased the number of publicly-funded study places for students in science and engineering . According to the provisions of the Education Development Guidelines for 2014-2020 , a pilot diagnostic test in physics and chemistry for eight to eleventh grade pupils is to be introduced from 2016. The aim is to assess students’ skills in order to improve the learning process in schools. In addition, there are plans to introduce a mandatory centralised exam in physics, chemistry or science (according to the pupil's choice). There will be a pilot of such exams in 2016 . It is expected that these actions will contribute to increasing the proportion of students choosing engineering and science studies in the future. Within EU funds periods 2004 – 2006 and 2007 – 2013 general education institutions received support for the improvement of separate infrastructure elements and ICT equipment. This support was mainly aimed at 10-12 grades. During the 2014-2020 EU SIF period, improvements of the study environment are foreseen at all levels of education. Within the EU Funds period 2007-2013, support was granted for the modernisation of infrastructure of higher education institutions that implement relevant education programmes. The shortage of scientists and engineers may hinder Latvia’s economic growth. If the shortage is resolved, Latvia’s economy will have greater potential to build innovative manufacturing, which could foster exports and economic growth. Possible other actions could focus on increasing the popularity of science and engineering among secondary school pupils. Targeted formal and non-formal education measures could be particularly effective in this respect.
Health professionals
Although the population of Latvia is shrinking, the demand for health professionals is high and is likely to grow due to the fast ageing of the population. The majority (approx. 70%) of health practitioners are employed in the public sector . The average wage in the human health and social work activities sector is a little lower than the average wage for the country . Health studies are popular and, according to the Ministry of Economics, the supply of health professionals meets the demand and will grow in the future to meet future needs . However, there is currently a lack of health professionals in the regions, especially family doctors. One reason relates to emigration because wages in e.g. Germany, Norway are higher than in Latvia. In addition, young doctors are not willing to work in the regions and typically choose careers in the capital . As a result, many doctors in the regions are in pre-retirement or even past-retirement age.
In order to make occupations in the health sector more attractive, in January 2016 the Latvian government raised the wages of medical practitioners by 7%. Furthermore, the wages were set for medical residents in regions to be 30% higher than in the capital (Riga). However, the majority of residents still choose a career in Riga; only 6-8% of residents chose to specialise and work outside of Riga . Currently there are discussions about changing the rules so that medical graduates would be obliged to work for three years in the regions that face shortages of health professionals. However, these proposals are not widely supported, as it is feared that this would encourage emigration . In 2013, the Ministry of Economics, in cooperation with other ministries, introduced a “Remigration Support Measure Plan” . The aim of the plan was to support Latvian nationals and their families living abroad in returning to Latvia, as well as those who wish to open businesses in, or maintain business ties with, Latvia. The key activities of the plan include: sharing labour market information with emigrated citizens of Latvia; attracting highly qualified people who went studying abroad; fostering learning of the Latvian language abroad; and simplifying, as well as providing financial support for, the repatriation procedure. There is no hard evidence, about the impact of Remigration Support Measure Plan. The resources allocated were insufficient to implement the plan effectively . Shortages of health professionals could be considered as critical, because it can significantly affect the quality of healthcare, especially in the regions. If the situation does not change, the residents of the regions may remain without adequate healthcare or those with more serious injuries or diseases will have to be transported to Riga.
Top Managers
Although the percentage of enrolments in social sciences, business and law decreased from 41% in 2010-11 to 36.5% in 2014-15, these fields of study remain the most popular among students in tertiary education . Hence, there is a huge supply of managers in the labour market. However, there is a shortage of experienced and highly skilled managers . This shortage is qualitative as the number of people with adequate education is sufficient, but the skills and experience are lacking. It may relate to the observation that many management, administration and real estate management higher education (HE) study programmes (especially in the public sector) do not meet the high labour market requirements. According to the evaluation of HE study programmes implemented in 2013 , management, administration and real estate management programmes lacked empirical and analytical research. In addition, a number of HE institutions needed more skilled teaching staff that could contribute to increasing the quality of study programmes. As a result, many graduates are working in lower skilled jobs or jobs not related to their qualification. However, according to Ministry of Education and Science, the programmes of low quality have since been either removed or improved. The main reason for shortage is wage level in Latvia. It cannot compete with wages in many other EU Members. Hence, many talented managers emigrate from Latvia. In addition, 25 years ago managers in Latvia possessed completely different skills sets, because the economic context was completely different in the Soviet Union. This may result in a situation where professionals working in this field are self-taught and may lack some skills, and recent graduates lack real work experience.
In 2013 the Ministry of Economics in cooperation with other ministries introduced a “Remigration Support Measure Plan” . The aim of the plan was to support Latvian nationals and their families living abroad in returning to Latvia, as well as those who wish to open businesses in, or maintain business ties with, Latvia. The key activities of the plan include: sharing labour market information with emigrated citizens of Latvia; attracting highly qualified people who went studying abroad; fostering learning of the Latvian language abroad; and simplifying, as well as providing financial support for, the repatriation procedure. There is no hard evidence, about the impact of Remigration Support Measure Plan. The resources allocated were insufficient to implement the plan effectively . PES organises measures to raise competitiveness (short courses of study, seminars, lectures and other classes) for the unemployed on specific entrepreneurial issues. Other potential policy measures could focus on increasing the quality of studies. This could include joint degrees with universities in other Member States, targeted funding to attract highly skilled teaching staff, etc.
Business and Administration Professionals
For this group, the situation is similar to that for managers. According to the Ministry of Economics, labour supply is higher than demand; supply is expected to grow and continue to exceed demand. Despite this, there is a shortage of experienced and highly skilled business and administration professionals. This shortage is qualitative, meaning the skills and experience are lacking, often as a result of lower quality of many management, administration and real estate management HE study. These programmes often lacked real-world relevance and were not always based on the results of cutting-edge research. Assignments performed by students were typically descriptive and lacked empirical and critical analysis.
PES organises measures to raise competitiveness (short courses of study, seminars, lectures and other classes) for the unemployed on specific entrepreneurial issues. Other potential policy measures could focus on increasing the quality of studies. This could include joint degrees with universities in other Member States, targeted funding to attract highly skilled teaching staff, etc.
Other possible shortage occupations
There are also shortages for agricultural occupations . Despite decreasing demand for employers of this occupation (18% decrease from 6.8 thousand in 2014 to 5.5 thousand in 2020 ) the shortage exists because there is a huge replacement demand, because the labour force is ageing. The labour supply is insufficient as these agricultural occupations are not very popular among young people . However, according to long-term forecasts of the Ministry of Economy, labour supply will be higher than demand. Hence, this shortage may only be a short-term problem. There are shortages of medium skilled workers with vocational training . This is a result of the low popularity of vocational education in Latvia. The share of students who, after graduating from basic education, entered vocational education in the 2013/2014 study year was 38% compared to 62% who entered general secondary education . According to long-term forecasts of the Ministry of Economy, labour demand in these occupations will be higher than supply in 2020 .
The Ministry of Education and Science aims to achieve a balance in the share of students of vocational education and general secondary education to 50/50 by 2020. In order to achieve this goal, a number of measures to improve the attractiveness of vocational education are being implemented. The Ministry of Education and Science is revising the vocational education curricula, introducing work-based learning, and assessing (recognising) knowledge, skills and professional competences obtained outside formal education. In addition, the Ministry is modernising infrastructure of education institutions and the vocational education network .
Surplus Occupations
Due to growing demand for higher skills in the labour market, demand for the low-qualified labour force will face the most significant reduction e.g. people without an education in any occupation will face the biggest problems of finding a job in the coming years . In 2015, the elementary occupations dominated the list of top 20 occupations with the largest decline in demand . There is also a surplus of building frame and related trades workers ; these occupations are expected to face low demand until April, 2016 . Demand may depend on EU structural funds. The new investment period has not yet got started, so the workload in the construction sector has declined. As a result the demand for building related workers decreased. There was a surplus of personal service workers , sales workers and protective services workers in 2011-2013. The surplus existed because the supply of such occupations is significantly larger than the demand (114 thousand versus 130 thousand) . The gap is going to be even bigger in the future. However, some occupations are demanded, for example, cooks are among the top of bottleneck vacancies notified by PES in 2015. Social sciences remain the most popular study field. Supply of these specialists exceeds demand . Thus such specialists work in lower-level jobs , e.g. more than half of secretaries and numerical clerks are overqualified. This surplus will grow further in the years to 2020. There will be a surplus of approx. 17 thousand specialists in humanitarian and social science areas .
The PES offers vocational and non-formal education training programmes. Since 2011, PES introduced training vouchers to allow more freedom in choosing training programmes. All these programmes focus on up-skilling or re-training of the unemployed. According to PES data, 36% of unemployed people who participated in vocational training were situated in the workplace six months after the training . In addition, a World Bank study suggests that vocational and non-formal education training programmes had significant impacts on improving employment rates of participants . From 2010 to the end of 2014, in the frame of the ESF project “Lifelong learning activities for the employed persons” led by the Ministry of Welfare, approx. 28 thousand employees (excluding civil servants) were involved in up-skilling activities aiming to increase their compatibility in the labour market. It is foreseen that in the EU fund planning period 2014-2020, the Ministry of Education and Science will continue the provision of the education possibilities for the employed persons.
Note on the methodology
The list has been compiled by Cedefop in the first half of 2016 combining quantitative and qualitative methods. In particular, a list of mismatch occupations was formulated following quantitative analysis of labour market indicators. Country experts were then asked to build on and scrutinise this list. Their expert assessment and knowledge of the country’s labour market has provided rich insights about the reasons behind the skills shortages or surpluses at occupational level. These are also accompanied by measures and policies that aim to tackle such mismatches. Country’s stakeholders have also been included in validating the final list of occupations.