Rewrite the labor equation: Middle-skilled workers have untapped potential

Rewrite the labor equation: Middle-skilled workers have untapped potential
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The state of the nation’s employment looks to be in good shape, but our long-term global competitiveness depends on young talent finding not just a job, but a well-paying career.

Recent statistics show that in 2015, there were 500,000 open computing jobs in the United States but fewer than 40,000 new computer science majors graduating every year. In a recent Business Roundtable survey, 94 percent of CEOs reported skills shortages at their companies, all while job openings have continued to swell at or near record highs since June.

How do we address the skills shortage in critical opportunity-rich fields like computing and cybersecurity? One solution may be found within the 66 percent of the population without a college degree. Employers are leaving skilled, high-potential talent on the table, and it is time to look beyond college graduates to fill these roles.

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Middle-skills workers without college degrees continue to be a vast and underutilized source of talent. New research published by Harvard Business School, Grads of Life and my organization, Accenture, points to workers who have a high school diploma but less than a college degree as an overlooked source of talent. As of October, there were 3.5 million unemployed middle-skilled adults, which is more than three times the number of unemployed adults with a bachelor’s degree or higher.

The research shows that employers are increasingly filtering out candidates for middle-skills roles who do not have a four-year degree. Three in five employers surveyed reject otherwise qualified middle-skill candidates with relevant experience in favor of recent college graduates. This practice hurts U.S. competitiveness in two ways: It slams the door of opportunity in the face of Americans with the experience to do the job or the aptitude to grow and makes it harder for American companies to find and retain affordable talent.

This practice disproportionately affects populations with college graduation rates lower than the national average, such as African Americans and Hispanics age 25 and older, as well as the nearly six million young adults between 16 and 24 who are not in school or working. Companies that insist on a college degree deny themselves access to this talent pool, while the American dream remains out of reach for millions.

Forward-thinking employers are building alternative talent pipelines to find middle-skills talent – and it’s paying off. Instead of relying on a four-year college degree, CVS Health uses a combination of pre- and post-employment training to prepare employees for the job. Through its Workforce Initiatives programs, CVS Health provides carefully designed training based on detailed role analysis to young adults, mature workers, veterans and individuals with disabilities. Employees who go through these programs stay at the company twice as long as those who come through traditional channels.

The benefits of investing in alternative talent pipelines extend beyond improved retention rates. Employers experimenting with innovative recruiting and training models have also seen higher employee engagement, streamlined onboarding and training and improved recruiting efficiency. SK Food Group, for instance, partnered with LeadersUp, a national talent development intermediary, to develop a talent pipeline to meet the hiring needs of a new facility in Columbus, Ohio. SK Food Group found a dramatic difference in the interview-to-hire ratio of LeadersUp applicants – 2:1, compared with the industry standard of 18:1.

Another factor in the labor equation is apprenticeship programs, which help employers address their need for skilled employees and preserve a pathway to the middle class for millions of Americans. The Department of Labor (DOL) continues to support apprenticeship programs for employers and employees to provide job experience and deliver a highly-skilled workforce to meet the talent needs of employers across diverse industries. Currently, there are more than 540,000 apprenticeships across the country, and companies are creating more opportunities every day.  

Accenture has begun analyzing credential requirements for early career jobs such as testing and application development and plans to expand our apprenticeship programs this year. Building apprenticeship programs not only opens access to opportunity for millions more Americans, but also allows employers to expand access to talent beyond the most fiercely contested segment of the labor market.

A college degree is a great aspiration, but it shouldn’t be the only entry into the middle class. Business leaders should engage their HR departments to understand which roles newly require a college degree. Have the skills required to perform the job shifted in complexity? Does that change now mean a bachelor’s degree is necessary? Are there alternatives for Americans to build those skills? Before raising credential requirements, employers could consider alternative pathways to accessing and developing quality talent to stay competitive.

Moving beyond credential-based hiring enables employers to reach young adults with the relevant skills, older non-degreed applicants with relevant experience, and the 78 percent of African Americans and 84 percent of Hispanics without a college degree.

With the unemployment rates near record lows, we should be aggressively working to increase the competitive advantage of the workforce. Providing skilled workers a chance to participate in the workforce and excel in the jobs of the future is a win-win.

Elaine Turville is managing director for Accenture's Human Service and Nonprofit Programs.