By: Daksh Sharma
Skill Spreads are widening and need to be closed to better secure a more productive economic future.
There is a fierce debate over how to educate the future workers of America. But with the rapid advancement of technology, employers are finding it harder and harder to hire people with the right skills. This “skills gap” is prevalent in both soft skills, such as communications and leadership, as well as hard skills such as computer fluency, technical writing skills, and foreign language proficiency. Moreover, multiple surveys find that graduating seniors are overconfident about their career readinesses. For example, 79.4% of graduates consider themselves proficient in oral and written communications, while only 41.6% of prospective employers believe the same. So then what are the main drivers of the skills gap? This article will discuss the skills gap broadly across the American labor market, education’s impact on it through credential inflation and a few ways some new and innovative companies are attempting to close the gap.
Perhaps the most obvious example of the skills gap lies in the tech industry. Colleges simply cannot keep up with the ever-changing landscape of technological innovation as the ability to code becomes more and more of a necessity due to businesses’ heightened online presences. But of course, modern technology affects many jobs outside of tech. For example, the job of a graphic designer looked much different 20 years ago. Back then, almost all students were trained to design for print, but as the web came along, the demand for web design increased. After the invention of the smartphone, there was a demand for mobile design. Graphic designing became digitized, and completely new skills were required. Such developments are a headache for both employers and job candidates. Employers are wary of hiring someone who does not have the proper skill set while candidates are less willing to apply for jobs that may render their skills obsolete in a few years.
It is also significant to note that some sectors of the economy have a slightly different problem: the aging workforce. Some skilled trades jobs, such as machinists, are filled by older workers. In 2014, more than 60% of machinists in Seattle, New York City, and Cleveland are at least 45 years old. In Chicago, 29% are at least 55. The amount of new hires is disproportionate to the number of retiring workers because high-school graduates are not getting the necessary vocational training.
While skills reign supreme in some fields, the diploma is increasingly in demand for other fields. After the 2008 financial crisis, data from a 2016 report from Georgetown’s McCourt School of Public Policy show that by that year, 99% of jobs created in the recovery went to workers who had at least some college background. The recession wiped out many blue-collar jobs which were primarily replaced by higher-skilled professional jobs such as consulting and business services.
Many of the jobs which require a degree today did not require one in the past. For example, in 2014, 65% of the job postings for Executive Secretaries and Executive Assistants required a B.A. But looking at the already-filled positions, only 19% of people actually had one. This new trend is due to credential inflation. More and more students are going to college, so employers expect a higher general level of education. As a result, they may filter out otherwise-ideal candidates for the positions. Bryan Caplan, in his book The Case Against Education, argues more than half of the benefit from getting a college education comes from its signaling benefits. Employers are reassured that earning a degree in and of itself is proof of an intelligent and hardworking individual.
Although it is significant to note that some jobs resist credential inflation, especially those with strict licensing standards. For example, all Respiratory Therapists must meet certain certification requirements, meaning employers do not have to extrapolate a potential employee’s competency from the mere fact of their graduation. But other employers still use a B.A as the first step in their recruitment filters. This requirement has broad implications for the two-thirds of the U.S. workforce who do not hold a bachelor’s degree. Middle-skill careers (those obtained with more training than a high school diploma but less than a B.A) are becoming closed off because many entry-level jobs, such as IT help desk technicians, are unattainable without college experience.
To be sure, many companies still assess their potential employers holistically. They look for people whose work ethics, personalities, and passions are aligned with those of the hiring company, and are often willing to teach skills on the job. For example, IBM has become more open to hiring workers who simply demonstrate the prerequisite skills rather than merely having a bachelor’s degree. But one thing is certain: on the job training has been decreasing over time. In 1979, young workers would receive about 2.5 weeks of training a year, which fell to only 11 hours by 1975. Furthermore, company training started to focus on things like workplace safety instead of skill building. By 2011, only 1 in 5 employees reported receiving on the job training in the past 5 years.
Many organizations have dedicated themselves to pick up the slack of higher education. MissionU, for example, is an alternative to college and focuses not only on building tech skills but also teaching business skills such as performing research, working on projects, and presenting those projects. Another organization, College for America (CfA), launched by Southern New Hampshire University, is the first skill-competency program to obtain federal funding. CfA students complete projects which demonstrate competency in personal and social skills and content knowledge to create job candidates who are competent in real-life scenarios which demand both soft and hard skills.
On the other side, Peter Cappelli, professor of management at the Wharton School of Pennsylvania believes that companies themselves should take the initiative to train their employees instead of expecting candidates to perfectly adapt to their new jobs. Professor Cappelli argues that universities “are not good at providing what employers want, which is work-based skills and experience. Instead, employers need to be much more involved, not just in telling schools what they want but in providing opportunities for new grads to get work experience and learn the relevant expertise.”
The existence of organizations like MissionU and CfA only help bridge the skills gap for the select few who enroll. Meanwhile, credential inflation makes the hiring process more difficult as employers try to find competent workers. Perhaps the best solution is for companies to spend money and guarantee their employees’ long-term success, even if it comes at a short-term cost.
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