Upskilling is Essential to Fill Job Openings

Stephen DeAngelis

June 15, 2021

There are currently over 8 million unfilled job openings in the United States. At the same time, business reporter Ben Popken (@bpopken) reports, “The civilian labor force participation rate, the government’s measurement of those who are working or unemployed but actively seeking work, remains dented, having only recovered by about half [when compared to the pre-pandemic rate].”[1] With so many people still out of work, one has to ask: Why are so many jobs going unfilled? The answer is not simple. Popken reports, “[Some employers say] economic impact payments, or stimulus checks, have played a factor for some who are sitting out the labor market. … Factory owners and employers lament that the generosity of unemployment benefits and stimulus payments have some workers avoiding returning to work because they make more money not working.” Rather than raise employee pay to entice people back to work, employers have convinced some politicians to cut back economic impact payments to try and force people back to work. Jack Kelly (@wecruitr_io), founder and CEO of WeCruitr, observes, “It’s reasonable that if employers need workers so badly, they should raise pay. This is also not happening. ADP chief economist Nela Richardson said, ‘The full sentence is “I can’t find workers at the wage I am willing to offer.” Full stop.’ Richardson contends that if you pay them well, ‘you can find workers.'”[2]

 

Kelly realizes raising wages is not possible for all businesses. “While [raising everyone’s wages] is easy to say,” he writes, “for many companies, particularly mom-and-pop businesses, which represent a significant amount of jobs, they don’t have huge financial resources … and simply can’t afford it. Small and midsize businesses rely upon razor-thin profit margins and don’t have the ability to increase salaries.” For a great number of unemployed people, however, the problem is not pay but a lack of skills required to fill many of the best-paying job openings. Popken notes, “Some will have the technical skills and desire. Others may need to enroll in online courses to ‘reskill.’ That requires knowing what skills are in demand, having the ability to use a computer and internet connection to obtain them, and the funds to go through the course.”

 

Closing the Skills Gap

 

Adrienne Selko (@ASelkoIW), Senior Editor at IndustryWeek, writes, “While everyone is quite happy about manufacturing performing strong, some even calling it a comeback, the talent shortage is a very serious threat to the health of this sector.”[3] The skills gap affects almost every economic sector, not just the manufacturing sector. “In the past year,” McKinsey & Company analysts explain, “the COVID-19 pandemic has quickly and dramatically accelerated the need for new workforce skills. The rapid rise of digitization and remote work has placed new demands on employees who, in many instances, now require different skills to support significant changes to how work gets done and to the business priorities their companies are setting. … The urgency of addressing skill gaps is clear — and, across industries, more important than ever to do.”[4] Popken notes, “Some of the burden lies on the worker to make sure they’re relevant and competitive.” The McKinsey analysts add, “[Workers also require] help from their employers to develop the skills that will make the overall business, and its individual employees, future-ready.”

 

The good news, according to the McKinsey analysts, is that “skill building is more prevalent now than it was in the run-up to the pandemic.” They add, “Redeploying talent to new roles — which often requires some degree of skill building — has also become more commonplace over the past year.” Mark Maybury (@mark_t_maybury), Chief Technology Officer at Stanley Black & Decker, recognizes the skills gap must be addressed; however, he asks, “How will we prepare people for the jobs of the future?”[5] He adds, “The way we train people today is not suited for these new jobs. We need to rethink how we prepare people for the workforce.” Maybury offers four suggestions about how America can close the skills gap. They are:

 

First, Businesses Need to Invest Properly in Re-skilling. Maybury notes, “New technologies are transforming dull and repetitive jobs into those requiring analytic and problem-solving skills.” McKinsey analysts report that their skills survey “asked about 25 specific skills that companies have prioritized to address through reskilling, and more than half of respondents report a focus on developing leadership, critical-thinking and decision-making, and project-management skills.” Those results don’t mean that more technical skills are not in high demand. Maybury notes, “Electricians are becoming digital electricians, material handlers are becoming robotically enabled, and assembly line workers are becoming robotics programmers.” As a result, he writes, “We need to invest more in re-skilling programs, which many companies are doing, but not well enough. For example, Deloitte reports that only 17% of companies have made ‘meaningful investments’ in reskilling initiatives related to AI, one of the technologies shaping the future of work. We need to go beyond providing access to digital learning resources and invest in programs that provide hands-on experience.”

 

Second, We Need to Move Away from a Singular Focus on Four-Year Education. “The value of a four-year education as a one-size-fits-all solution is more in question now than ever before,” Maybury writes. “Why would we encourage our young students to take on tens or hundreds of thousands of dollars of debt when there are high-paying careers waiting for them in skilled trades, IT and more?” Tech journalist Steve Lohr (@SteveLohr) reports, “As many as 30 million American workers without four-year college degrees have the skills to realistically move into new jobs that pay on average 70 percent more than their current ones. That estimate comes from a collaboration of academic, nonprofit and corporate researchers who mined data on occupations and skills.”[6] Peter Q. Blair, a labor economist at Harvard, told Lohr, “We need to rethink who is skilled, and how skills are measured and evaluated.” Maybury believes we also need to realign educational opportunities. He explains, “As businesses, we can create more opportunities through initiatives like apprenticeship programs, so successful in countries like industrialized Germany, where high school students get hands-on experience and build bridges to opportunities in these industries as they shape their future.”

 

Third, the Private Sector Needs to Do More to Sell Certain Jobs Effectively. According to Maybury, “Many of the jobs of the future will be in industries like manufacturing, construction, heavy industry and other skilled trades that are often stigmatized – thought of as having limited career potential. … We need to sell the mission and value of these critical jobs of the future so that young people understand that skilled professions are not like they imagined. They are meaningful, well-paying jobs that are essential to unlocking human progress.”

 

Finally, We Need to Drive the Right Behaviors through Tax Incentives and Grant Programs. “Supercharging our skilling ecosystem will also require policies that spur the investments we need to succeed,” Maybury writes. “We need more grant programs encouraging students to enter skilled trade educational pathways, including technical and community colleges. Even though vocational training is often less expensive than a traditional four-year education, it can still be expensive. We need to make it more affordable so that anyone – regardless of his or her socioeconomic status – can build a career. We also need tax credits to encourage corporations to invest in more research and development. Innovation will help create new types of jobs, providing even more opportunity for people to be successful in new ways.”

 

Concluding Thoughts

 

Papia Debroy (@DebroyPapia), vice president for research at Opportunity@Work, told Lohr, “Moves to higher-paying jobs are typically a combination of personal initiative, foundational skills and some additional preparation like an outside course or company-sponsored training.” America needs to get back to work; however, workers need the skills to fill available openings. This requires effort from all stakeholders. The McKinsey analysts conclude, “Many companies are now at a critical juncture when it comes to talent development and skill building, and … dramatic changes are needed to thrive — or even survive — in the future. To emerge stronger from the pandemic, now is the time for organizations to invest in skill transformations and apply the lessons of the past year to crystallize their current and future skill needs.”

 

Footnotes
[1] Ben Popken, “There are now more jobs available than before the pandemic. So why aren’t people signing up?” NBC News, 9 April 2021.
[2] Jack Kelly, “Here’s Why There Are Millions Of Job Openings, But Little Hiring,” Forbes, 7 May 2021.
[3] Adrienne Selko, “Skills Gap Threatens Health of Manufacturing Sector,” IndustryWeek, 18 May 2021.
[4] Fabian Billing, Aaron De Smet, Angelika Reich, and Bill Schaninger, “Building workforce skills at scale to thrive during—and after—the COVID-19 crisis,” McKinsey & Company, 30 April 2021.
[5] Mark Maybury, “A Well-Trained Workforce Is Manufacturing’s Future,” IndustryWeek, 15 October 2020.
[6] Steve Lohr, “Up to 30 Million in U.S. Have the Skills to Earn 70% More, Researchers Say,” The New York Times, 3 December 2020.