As senior vice president and chief HR and administrative officer for Harris Corporation, an international communications and information technology company, Jeff Shuman has first-hand experience with the skills gap - the gap that exists between the jobs an organization has to fill and the knowledge, skills and abilities of current and potential workers.
Harris has about 17,000 employees, including nearly 7,000 engineers and scientists. The company spends a lot of time in schools teaching students about careers in engineering.
"We can no longer rely on someone graduating with a degree and expecting them to have the skills and capabilities to handle all of our jobs," says Shuman. "So we have to influence the curriculum, help develop people as they're going through school - with internships, co-ops, things like that - so that individuals are better equipped."
Partnering with school systems is key to addressing the skills gap, he believes. "We as a company spend a great deal of time at schools of all levels - elementary, middle and high schools - getting kids interested in being engineers, because if we don't do that as a country now, we'll be hurting years from now," he says. "And it's hard to put an ROI on that, especially in schools. That conversion rate is going to be long term, but it's clearly essential we build that talent capability."
Addressing the skills gap is a challenge for many employers and the U.S. economy at large, and it's getting more attention from legislators and policymakers. Last year, the White House launched Skills for America's Future, an initiative designed to make it easier for community colleges, private sector employers, governments and labor unions to work together to address the skills gap. Among its goals is to ensure that every state has at least one high-impact partnership between industry and community colleges.
Last fall, EBN convened a roundtable of workforce experts to discuss the skills gap, what it means for employers today and in the future, and what steps organizations can take to deal with it. Edward Gordon is president of Imperial Consulting in Chicago and author of several books, including "Winning the Global Talent Showdown" and "The 2010 Meltdown: Solving the Impending Jobs Crisis;" Tapan Munroe, Ph.D., is an author, speaker, consultant and adviser in economics, whose latest book, co-authored with Mary Walshok and Henry Devries, is "Closing America's Job Gap;" Elyse Rosenblum is senior consultant of workforce readiness research and policy with Corporate Voices for Working Families.
EBN: When did the skills gap first start to widen?
Munroe: It's difficult to pinpoint exactly. Based on the Bureau of Labor Statistics data I've seen, it was at least a decade ago during the recession of 2001. And after the recent Great Recession of 2007 to 2009, recovery in jobs has been painfully slow compared to the previous 10 recessions.
EBN: What particular types of worker skills/knowledge are most lacking among the current workforce?
Munroe: The most glaring area is STEM [science, technology, engineering and math]. Recent BLS monthly job opening data suggest there are about 3 million job vacancies, most requiring STEM background.
EBN: What's the role for employers in closing the skills gap?
Rosenblum: There is a small-to-midsized manufacturing company in Georgia that was very concerned with the high school dropout problem in their community and could see the writing on the wall - that they were going to have much greater challenges attracting talent for their plant. And so it developed an innovative partnership with the local school district. Young people most at risk of dropping out are identified by the school system, and they're given the opportunity to be part of a program called 12 For Life, where they spend half their day in school onsite at the factory, and half their day working. There's a lot of wrap around support in terms of mentoring and peer learning. And they have seen the dropout rate in that county fall by about 10% over the last several years, in large part through this program. They have high graduation rates for the young people that go through this program. That's an extremely hands-on, fully engaged way an employer can take a crack at this challenge.
Gordon: It's not about talent management anymore, it's about talent creation. Regional Talent Innovation Networks are networks and collaborations among businesses, governments, schools, nonprofits. These models have spread across the U.S.
North Dakota, for example, has very low unemployment - 3.5%. One of the reasons for that is that the state has pretty much adopted this model of RETAINs across their major population centers. Now North Dakota is a very small state with only 675,000 people in the entire state. But, in the last decade, they went from losing population because their young people couldn't find work to their population increasing 5%. They went from losing jobs to now they're in IT, aerospace, bio-tech, and they still have their agriculture base. A large part of that was built on diversifying their population base of educated people - 80% of their kids graduate high school in North Dakota - and re-educating them for these other fields and attracting those businesses to their state.
They attracted 60,000 new jobs in the last 10 years. People are moving into North Dakota for jobs. I'm not saying everything was done with RETAINs, but a large part of it was the collaboration between businesspeople in local communities, their government and public and private educators.
Doing nothing a 'recipe for decline'
EBN: If we continue on our current educational and employment path - meaning we do nothing to address the skills gap - what are the repercussions for the workforce and economy?
Gordon: It comes down to whether we are going to look at the long-term viability of a business and our communities, or we are going to continue to look only at short-term profit. Short-termism has become too much of a dominant factor in American business culture ... It's a short-term and long-term effort. We need a balance between both of these issues. That's where I see we're at a crossroads right now.
More businesses are starting to understand they need to pay attention to both of these issues if they're going to retain the talent they need and rebuild the shattered pipelines between the next generation coming into their businesses and helping their current workers so that they can remain viable. Because we do not have a bottomless reservoir of talent in the United States, nor can we import it from overseas because other countries - India, China, Germany - they, too, are short the same talent we are looking for in our country.
Rosenblum: It's completely unacceptable to stay on the current trajectory because what it will mean is that American business is unable to access the talent it needs to grow and remain or regain America's place in a global economy. Doing nothing is a recipe for decline in the American economy, both at the individual level, and at the corporate, community and national level.
EBN: The White House has convened a taskforce to address the skills gap. What's the role of government in narrowing the skills gap?
Rosenblum: This is a problem not solved by employers alone. We spend a lot of money on training, but it's going to programs that are not aligned with employer needs. Government programs need to get more tightly oriented to outcomes-based programs. And there's a role for government in tax policy.
Munroe: I see the role of government as a catalyst rather than a top-down role. An area in which the government can make a major contribution is to develop public-private partnerships at the regional level to address this issue.
Articulate skill needs, educate policymakers
EBN: Many of the solutions to narrow the skills gap are long-term investments. What can employers set in motion today that will help narrow the skills gap?
Rosenblum: Articulate their skill needs and projections around job creation, both at the local and regional level, and in the national conversation, so their needs can play a much greater role in informing what we're doing at every level of government in terms of education work at the local level, and workforce training policy at the federal level.
Educating policymakers is one key piece. And then engaging in partnerships and networks to provide education and training opportunities to both their current workforce, to up their skill level, and to potential workers through things like internships, job shadowing, mentoring, to really get hands-on and serious about their role in talent creation.
Skills shortage among top business risks for 2012Despite high levels of unemployment, business leaders say one of the biggest risks they're facing is a talent and skills shortage, according to the 2011 Lloyd's Risk Index.
Talent and skills shortages shot up to the number two risk facing businesses, up from the 22nd place in the 2009 index. The survey polled 500 C-suite and board-level executives in North America, Europe, Asia and elsewhere to assess corporate risk priorities and attitudes around the world.
Forty-five percent of respondents in North America rated talent as a high or very high priority over the next year.
"All of the traditional risks that used to keep people awake at night - volcanoes, floods, earthquakes - are now all in the bottom 10," notes Hank Watkins, president, Lloyd's America.
Organizations "feel much better prepared to address natural hazard risks, because supply chain analysis has become much more important to most manufacturers," he adds. "Those are risks we can identify and manage. The talent issue is much more challenging."
Boosting talent retention was named in the survey as one of the most effective risk management actions taken by management over the last three years, highlighting just how keen businesses are to retain the staff they have.
The risk perceptions of business leaders are in sharp contrast to those raised in the inaugural survey in 2009, in which the top three global risks were related to the liquidity crisis - cost and availability of credit, currency fluctuations and insolvency.
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