Home – States Look To Grow ‘Middle Skill’ Workforce

States Look To Grow ‘Middle Skill’ Workforce

 When optometrist Dena Davidson decided she was ready to leave her profession behind, she knew two things. First, she was really interested in pursuing a career in human resources management. Second, she was less sure where or how to get started. 

 

“With optometry there was one very clear path to follow,” she says. “With HR it was very different. Did I need to go back to school? Do I need to get a certificate? It really wasn’t clear at all.”

 

In the beginning she was able to mine some information from people she knew in the field, but found that the entry process was very specific to where those particular people worked. Hesitant to make the commitment to another four-year university program without a clear answer that it would all pay off in the end, she opted for a shorter certification course through the University of California Davis extension program. She eventually did work her way into her new career, but even with her certificate it was a long process that included spending a year at an entry-level position in a call-center.

 

Davidson acknowledges today that even with the hard road she took she had a few things in her favor many others seeking to change or start a career don’t have. For one, she knew she would always have a well-paying career to return to if it didn’t work out. That career had also afforded her the means to plan and budget for a period where her income would be significantly less than she was used to. Perhaps most significant, she would never not have a four-year college degree, something the vast majority of workers out there do not possess.

 

Although the U.S. Census reported last year that more than a third of U.S. workers now have a diploma from a four-year institution – the highest since the Census began recording such information in 1940 – almost 67 percent of workers nationwide still lack a bachelor’s degree. With most high paying jobs currently requiring a college degree as an entry point, for many job seekers the lack of necessary education is killing their higher aspirations before they begin.

 

Lack of a college diploma can make it hard to find work at all. According to 2016 Georgetown University study, there are 7.3 million fewer jobs today for workers with only a high school degree than there were in 1989. Of the 7.2 million jobs lost during the Great Recession, 5.6 million were for workers with a high school degree or less, and only about 1 percent of those jobs have been recovered since 2010.

 

Workers are not the only ones hurt by the situation; employers are also suffering. Data from the U.S Department of Labor shows there are approximately 6 million unfilled jobs in America. Many of those are good-paying “middle skill” jobs (on average $55,000 per year) that don’t require workers to have a college degree but do demand they have more than a high school diploma. That number could well rise in the coming years as aging Baby Boomers continue to retire. It may also be particularly problematic for smaller businesses that already have trouble competing with large corporations for the best talent. In a survey released in June by the National Federation of Independent Business, 48 percent of small businesses reported they were unable to find qualified applicants for open positions. The lack of qualified employees is in fact forcing a growing number of small to mid-sized companies to look outside of the country for workers.

 

It is a troubling scenario for both employers and the U.S. economy. And while much of the discussion of the issue has revolved around technical skill positions, as Davidson’s situation illustrates the problem clearly touches on the white collar world as well. Federal Reserve Bank of Dallas CEO Robert Kaplan said as much in a recent Bloomberg op-ed, noting his company’s surveys show many chief executive officers reporting “shortages of workers for middle-class-wage jobs such as nurses, construction workers, truck drivers, oilfield workers, automotive technicians, industrial technicians, heavy equipment operators, computer network support specialists, web developers and insurance specialists. If these types of jobs go unfilled, businesses will expand more slowly and U.S. growth will be impeded.”

 

With so much on the line, states are increasingly working on ways to help workers acquire the skills they need to access the middle skills job market. According to the National Conference of State Legislatures, 37 states passed a total of 97 workforce development bills in 2016. These measures address a number of efforts, including incentivizing apprenticeships and other work-based learning programs, aligning education offerings with workforce needs and taking a fresh look at career technical training programs in high schools and community colleges. Some states, such as Alabama and South Carolina, have adopted plans to offer tax incentives to companies that hire apprentices, while Rhode Island is now reimbursing employers up to $5,000 annually for apprentice training costs. A similar plan is underway in Indiana, where the state’s NextLevelJobs Indiana program will reimburse employers $2,500 per employee for on-site apprenticeships, up to $25,000 annually. Rolled out last month, state officials said 1,200 people signed up in the program’s first three days. 

 

Brooke DeRenzis, state network director for the National Skills Coalition, which tracks state and federal efforts to help workers grow their skillsets, says one more critical thing states can do is to help industries seeking good workers to help themselves. In that regard she notes many states are now working on skill development programs called sector partnerships, which use state dollars to convene multiple employers within an industry with local resources and agencies to close employee skill gaps. To date, at least 22 states have adopted sector partnership policies, including Georgia, which came on board this summer.

 

“If you are a small to mid-sized business in a region with lots of businesses in the same kind of industry, how do you get the kind of skilled workers that you are looking for?” she says. “A sector partnership is your business working with other businesses and community colleges and even labor unions to develop a pipeline to provide those kinds of skilled workers.”

 

There is also a growing private sector effort to nudge employers toward making their hiring process more about skillsets than solely degrees. Non-profits like Skillful and Opportunity@Work are striving to create what Skillful CEO Beth Cobert calls “an ecosystem perspective” for both employers and job seekers, essentially making them partners in the process.

 

Skillful – a project of the New York-based Markle Foundation in partnership with LinkedIn, the state of Colorado and other local partners – does that by providing job seekers with numerous tools to help them discover jobs for which they can utilize their current skills even without a college degree. For workers seeking new skills, the site connects them with approximately 1,000 training programs around the state, as well as volunteer coaches to help guide them toward their career goals. Skillful also provides employers with a vast number of detailed tools to improve their hiring process, from something fairly complex like how to adopt a skills-based hiring model to the simple act of writing job postings more likely to draw highly qualified candidates. To date, over 49,000 job seekers have signed up to access tools through Skillful since the effort launched in early 2016.

 

Even more noteworthy, says Gov. John Hickenlooper (D), is that over 90 companies have since partnered with the project. That enthusiasm from Colorado employers recently helped Skillful garner a $25.8 million grant from Microsoft philanthropies as part of a three-year partnership to help spread the platform to other states.

 

“I think this is going to scale very rapidly,” Hickenlooper said in a recent interview with SNCJ. “Since we’ve been doing this every business I’ve talked to has said it’s great. I can’t remember seeing a public policy where businesses were embracing having to accept more costs. They see an outcome where they’re going to get better employees.”

 

Skillful’s Cobert declines to give a timetable for when Skillful might start appearing in other states. But she says the transition to the mindset behind Skillful and other efforts like it is already in motion.   

 

“We really need to shift our model that says we get all of our education in a four chunk at one time in one place between the ages of 18 and 22,” Cobert says. “That is not what is going to be effective in the 21st Century, and frankly most Americans know that.”

 

Colorado Department of Labor Executive Director Ellen Golombek, agrees. And the answer, she says, isn’t really one that lawmakers alone can devise. 

 

“It’s hard to legislate culture change. But what we need to move to is a culture of lifelong learning,” she says. “If we’re going to be competitive in a global economy then we need to accept that every person in our workforce needs to continually update their skills, learn more things, become more proficient and have the opportunity and the availability of the tools to do that.”

 

Even more key, Golombek says, is shifting our mindset away from the ideas that college is the only way for someone to work their way to the middle class.

 

“Eighty percent of all top jobs in Colorado by the year 2020 will require some kind of post-secondary education, and that doesn’t mean college. We really need to stop talking just about college and start talking about post-secondary education, because that really is the key. That’s not to say people shouldn’t go to college but it is saying there are multiple ways to get to the middle class.”