A quick scan of Google and LinkedIn garners these headlines: “U.S. job openings hit a record high.” “Nearly half of companies say they don’t have the skills they need.” “Industries look to high school grads to fill skills gap.” “U.S. companies look overseas to fill the IT skills gap.” “There is not a tech pipeline problem.” And … “The myth of the skills gap.”
While not everyone agrees on whether a skills gap actually exists, one thing is clear: the skills gap question is trending. So…is it a myth or reality? Why now? What to do? Let’s take a look.
Is the Skills Gap a Myth?
Yes and no. At first glance, there doesn’t seem to be a problem. True, job openings in the U.S. reached a record high in July 2017, at nearly 6.2 million. And in August, the U.S. unemployment rate was a low 4.4 percent. However, even that low rate leaves a hearty 7.1 million people unemployed; more than enough to fill the jobs, right?
Still, employers say they have trouble finding competent workers to fill the jobs. The most recent Federal Reserve Bank Beige Book describes tight labor markets across the board, with worker shortages in numerous industries. Businesses reported difficulty filling openings at all skill levels. In some areas, companies are turning down business because they could not find the necessary workers.
It seems that, although we have enough people to fill the jobs in this country, we don’t have the right people with the right skills for those jobs.
There are multiple reasons why the skills gap is top of mind for many right now. It’s a pressing issue for employers who aren’t finding the talent they need – and there are looming demographic realities, technology advancements, legal developments, and global economy realities conspiring to broaden the gap. Here are just a few:
• Baby Boomers:
As boomers age out of the workforce, many are taking their skills and competencies with them. Some employers are finding ways to tap this treasure trove of experience and knowledge by fostering mentor relationships or hiring boomers as consultants to provide guidance as the company shifts responsibilities to the younger generations of workers.
At the same time, boomer retirement is a boon to industries that cater to seniors. Residential and senior housing builders, travel and tour operators, and health facilities are all seeing an uptick in demand – creating potential skills gaps as those industries scramble to place workers where they’re needed to serve the needs and desires of an aging population.
• Artificial Intelligence (AI):
Machine learning and artificial intelligence technologies create skills and competencies challenges on two fronts. Some describe AI as a new “blue collar worker” that companies train as they would train a new employee; shaping behavior to reliably complete repetitive tasks. From processing insurance claims to distinguishing between a healthy and mutating cell or spotting a camouflaged soldier on a distant battleground — AI is well-suited to catch discrepancies prone to human error or limitations.
As the technology takes on more, it’s expected that groups of employees will be displaced in their roles – many poorly prepared with the skills and competencies required for a different kind of job.The flip side of the AI coin is the need for people with the skills to develop, implement and operate emerging technologies. So much is happening with AI right now that the demand for machine learning engineers, data scientists, cybersecurity experts and AI-savvy health researchers is greater than ever before. Employers are already faced with the challenge of acquiring a workforce with the right set of skills and knowledge to keep up.
• Global Talent Pool:
One great thing about a global economy is that both employers and employees benefit from a cross-pollination of skills, competencies, knowledge, and perspectives that span time zones and borders. The multigenerational, multicultural workforce is here to stay – bringing with it a broad range of skills that reflects the education and opportunities in each location.
To fill a skills gaps, it’s easier than ever for employers to look beyond their immediate communities to find talent. The trouble is, everyone else is looking, too! The skills gap isn’t simply a U.S. concern; other countries, too, are working to find and develop the skills they need.
Simply said, the need for skills and talent is universal. We all participate in a global economy that broadly requires the same sets of highly desirable skills. When those skills are scarce, you’ll likely face hefty competition for what’s there.
What to do About the Skills Gap?
Skills and competencies don’t just happen. People need to learn them. And they aren’t always available in the first place you look. Here are three things you can do to tackle your skills gap:
• Recruit Better:
Take a look at how you’re recruiting for new employees. Challenge your team to look beyond the obvious. Expand your horizons beyond the top schools to find hidden gems. Are women, Blacks and/or Latinos underrepresented in your workforce? Use a competency-based approach to hiring, to help overcome hidden biases. Consciously seek people with different backgrounds and perspectives.
High schools and colleges want the same things that you do – young people equipped to fill the jobs of the future. If you haven’t already, identify a few schools to work with to shape the curricula to better meet the needs of the industry. Create internship programs to infuse academic learning with real-world experience for the students. Collaborate with government. Rhode Island is seeing success in a government-academic-private sector collaboration that gives their young graduates an edge for 21st century jobs.
• Train the People You Have:
You can’t always wait four or five years for the next crop of graduates to gain the skills they need. It’s not wise to hold off training your high turnover positions, even if you expect that some of those employees won’t stick around.
Consider upskilling your freelancers, too, if they don’t have all the required skills. In the near term, you’ll get more of what you need. In the long term, it’ll come back to you. More employees may stay with your company. If not, you’ll probably hire someone who was trained by another company for just the work you need.
Not a Myth
The skills gap is real. Unless we improve how we find available talent and better shape employee skills, it’s only going to get worse. Now is the time to build the processes, programs, and relationships to shape the future workforce together.
Visit our website or contact us to schedule a demo or learn more about our competency-based workforce development solutions.