The coronavirus pandemic has accelerated a great skills mismatch that is going to define the U.S. job market for years to come, demanding creative and bold new thinking—and a bit of courage—from companies, educators and government.
Of the 40 million jobs that have been lost in the past few months, the hard truth is that many of them may not be coming back. A paper by the Becker Friedman Institute for Economics at the University of Chicago predicted that up to 42% of those laid off won’t be recalled, calling the pandemic a “reallocation shock” as firms shift their focus to new growth areas.
The laid-off workforce—and many who are still employed—lack the very skills that are going to be in greater demand in the new, post-pandemic economy. Companies across the board know they need people with data analysis skills to enable them to become more digital in their business and in their delivery models, a need that has been underscored by the pandemic response.
They also need employees with problem-solving, communication and decision-making abilities as artificial intelligence increasingly takes over routine tasks. Those “soft” skills, which have traditionally been seen as the domain of upper management, will increasingly be in demand at all levels of an organization including entry-level positions.
Workers are aware they need to learn new skills to stay competitive. More than a quarter of respondents to a Prudential Financial survey said they worry they lack the skills that will be most in-demand when the economy recovers. In addition to hard data skills, they believe soft skills such as creativity, adaptability, time management and collaboration will also be crucial abilities. Half of the 2,050 surveyed said they had increased their use of online learning programs during the pandemic.
While companies will be able to partly address these skills shortages by hiring from the outside, a more cost-effective approach may be to become deliberate and intentional about addressing the gaps by upskilling their own workers.
Having the courage now to take on more of the investments in training and furthering education, during a burgeoning recession, can be one important way in which companies can secure their future and boost their talent pipeline for the long haul.
Workers who obtain additional training and skills development generally enjoy greater job satisfaction, efficiency and more opportunities. But with record layoffs and job elimination, employees, who typically pay for furthering their skills, knowledge and education, may be reluctant to take on this debt due to the uncertain future of their current employment status.
Some innovative new models are now springing up in which employers share some of the up-front costs. with third parties who can deliver training and education.
The apprenticeship system — successfully used by Germany for decades — is one example of a cost-sharing approach that could show strong promise for American re-skilling.
Employers may need multiple solutions that can be scaled up as well as a true partner who isn’t afraid to put skin in the game, one that acts more as a consultant to their HR department and line managers in developing strategies to retain, find and attract talent.
Workforce solutions will also need to be strong on outcomes so that companies can see their investment in training is delivering a measurable return. There are training platforms that are providing disruptive new delivery options for companies, but they will need to be enhanced with some third-party validation to ensure that the learning has been effective.
These trends will ideally lead to a stronger integration between the higher education and training development fields, which have traditionally had separate regulation and accreditation.
Typically, investments employers make on training and developing their employees can only rarely be used to support a higher education qualification, and vice versa. More and more, companies don’t see that distinction and will want partners who can provide an integrated solution to produce the desired skill sets, including recognizing professional experience for college credit, which can help expedite the time to degree, as well as validate desired skills.
Coronavirus has hastened the arrival of a new normal where many of our old assumptions about education, training and careers are going to dissolve. Employers will need to be thinking less about specific roles and job titles, and more about key skills and talents, whether that’s in banking, healthcare, IT or any other field.
Partners in training and education who can guarantee those skills for employers are going to be among the winners in the new economy.
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