A Skills Mismatch Makes French Unemployment Worse
Clara Gaymard, the head of General Electric’s French unit, has searched in vain for workers for a factory that makes valves for the oil and nuclear industries in Condé-sur-Noireau in western France. “The plant has 360 employees, 100 of whom will retire in the next four to five years, and we can’t find welders and cutters to replace them,” she says.
Employers in the U.S. complain they can’t find qualified workers. As GE’s experience in France shows, the problem is not unique to American industry. While French jobless claims rose to 2.92 million, or 10 percent of the working-age population, at the end of May, a survey released by Pôle Emploi, the government employment agency, showed that about 43 percent of French companies were unable to recruit the workers they need; that’s up five percentage points from a year earlier. In some industries, two thirds of the companies encountered difficulties hiring.
It’s not just high-level engineers who are in short supply. Cooks and other lower-level workers are needed. The shortfall for home nursing and cleaning jobs was the highest, at 67 percent; it was 62 percent for engineers, 61 percent for cooks, and 58 percent for hospital nurses.
The skills mismatch reflects France’s inability to adapt its educational and vocational training to business needs, as neighboring Germany has done. Every year half a million German businesses take on teenage apprentices to teach them a trade: The apprentices supplement their on-the-job training with classes at vocational schools. “In Germany, not only are vocational training firms obligated to provide details to the government on their job placements, but trainers’ pay is partly dependent on how many trainees find a job, which forces them to build classes around well-identified needs,” says Marc Ferracci, a professor at the Université Paris-Est Marne-la-Vallée, who co-authored a report last year on vocational training for research center Institut Montaigne. The result: Youth unemployment (for those 15 to 24) in Germany was 8.5 percent; France’s is 22 percent.
France’s educational system looks down on vocational training, perpetuating the notion that intellectual jobs are more worthy than manual work, says Jérôme Frantz, chairman of the Fédération des Industries Mécaniques, whose member companies make parts for everything from machine tools to trains and wind turbines. “For years, there has been a deep hatred in the education system regarding manufacturing, which was ideological,” he says, referring to the French Left. GE’s Gaymard adds: “People don’t want to work in manufacturing anymore, as they’ve been told for a decade that plants were going to China.” The mechanical industries federation started an advertising campaign in June to lure job seekers to manufacturing. It needs about 40,000 people a year over five years to replace retiring workers and expand.
The shortfall comes even as French industrial payrolls shrank by more than 800,000 in the past 10 years, to 3.3 million amid an economic slump, according to Insee, the national statistics office. Yet Eiffage, France’s third-largest builder, still plans to hire more than 3,800 people to replace retirees. “We’re struggling to find skilled and committed workers, team leaders, and engineers,” says Eiffage Chief Executive Officer Pierre Berger. “Working with one’s hands in this country isn’t recognized except in luxury goods and for arty Parisian craftsmen.” Eiffage now signs up 400 to 500 youths a year on the minimum wage to train them in the skills the company needs.
The lack of mobility among factory hands even inside France adds to the skills mismatch, says Professor Ferracci. “French employees are rarely willing to move, compared with the U.S. and the U.K., because the French housing market lacks fluidity,” he says. While France spends a bigger piece of its national income on education than Germany—6 percent compared with 4.8 percent, according to Organization for Economic Cooperation and Development figures—it gets less bang for its buck. Pôle Emploi needs to improve its statistics on companies’ requirements by jobs and areas, Ferracci says. Universities also should publish their job-placement records, as is done in the U.K. and Scandinavia. Says Ferracci: “Once you allow students in France to know the placement rate and even the wages stemming from different higher education courses, I can assure you that the system will regulate itself.”