How to close the skills gap

Nearly seven years after the Great Recession, the U.S. skills gap remains a dark cloud hanging over the nation's economic recovery.

More than half of employers report they have jobs for which they cannot find qualified applicants. Accelerating technological change is driving demand for high-level skill sets. Education and training always have been the gateway to opportunity. But today there seems to be a mismatch between the skills businesses are demanding and the skills that applicants are bringing to the table. Here are three key steps to better match supply and demand in the job market.

MEDi the robot.
MEDi the robot.

1) Increase competency-based hiring. Many job openings require particular educational degrees or training, and "credential creep" means that many jobs that didn't call for higher education now do. For example, almost two-thirds of executive secretary openings now require a BA, but only 19 percent of current executive secretaries are that highly educated.

Let's be honest: whether someone has a bachelor's degree or not, and where they went to school, tells us something about what they know and are able to do, but it doesn't tell us everything. Some people with college degrees from prestigious schools still lack needed job skills. And many people without college degrees have highly relevant skills that they gained in other ways, such as running their own business or in the military.

What employers really care about is whether a job seeker has the skills and knowledge to do the job. At best, educational attainment is a "noisy signal" of job seekers' skills. Fortunately, online and other forms of simple assessments now allow employers to more readily screen what applicants know and can do. Employers should ditch their over-reliance on educational requirements and open their ranks to anyone who can demonstrate the desired competencies. By expanding the hiring pool, employers will benefit from better-matched workers, and we'll all benefit when jobs and economic opportunity are opened to a broader group of applicants.

2) Expand business-education partnerships. Business is the top consumer of education's output. Employers see firsthand how well the system prepares students. But over half of surveyed business executives believe our education system does not teach the skills needed for today's jobs.

Any course correction must include greater collaboration between the two sectors. FedEx, for example, invests heavily in an online educational platform that offers a range of courses for job advancement, many of which are eligible for college credit.

We also should consider what is working abroad. Apprenticeships comprise almost 4 percent of the labor force in Germany and Austria but only 0.2 percent in the U.S. They combine paid work with on-the-job and classroom training in high-demand skills. This model holds promise, especially for Millennials, two-thirds of whom don't complete a traditional four-year degree yet need in-demand skill sets to climb the economic ladder.

3) Set the bar high for kids. Poor writing skills often come up when employers talk about the skills gap. Meanwhile, technological advances have raised the need for strong, basic STEM (science, technology, engineering, and mathematics) skills across a broad range of jobs at all skill levels.

These issues can be resolved if we set the bar high for all students around the country so that all high school graduates have the same minimum skill sets. Already enacted by over 40 states, college- and career-ready standards are a key tool in our educational arsenal. Moreover, they match the rigor of top-performing nations, with their development having been guided, in part, by findings from international assessments. States should do all they can to ensure successful implementation of the standards.

Countries' economic strength always has depended on the quality of their workers. This is even more true today when capital and ideas easily can cross borders and flow to where highly skilled workers add the greatest value. This presents both a threat and an opportunity. Capturing that opportunity is within reach, but only if we pursue hiring and educational strategies focused on the competencies that Americans – and their employers – need.

Commentary by Steve Odland, CEO of the Committee for Economic Development and former CEO of Office Depot and AutoZone. Follow him on Twitter @CEDUpdate and @SteveOdland.

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