The dangers of skills-gap skepticism

Was America’s skills gap based on a lie? Some prominent progressives have referred to the idea of a national skills shortage as an “incredible cop out.”

Others have claimed that the skills gap “was the consequence of high unemployment rather than its cause … With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials.”

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Skills-gap skepticism is increasingly persistent among U.S. pundits and policy wonks. Skeptics claim the country’s record number of unfilled jobs (6.9 million as of early January, according to BLS data) are the fault of employers because there are candidates with potential but not experience who are being passed by.

They argue that these unfilled positions are not skilled jobs but rather low-skill jobs, making the case that while the engine of America’s dynamic economy is humming along, the millions of unfilled jobs are in agriculture, hospitality and custodial services.

Those who haven’t ever worked in the private sector might be forgiven for being skeptical about the existence of a skills shortage. But employers know that America has a significant skills gap — one that is growing with each passing month. And you won’t find many skill-gap skeptics among underemployed workers, particularly millennials. 

There are two primary reasons why so many middle- and high-skill positions are left unfilled. The first is a lack of workers with digital skills. The World Economic Forum found that only 27 percent of small companies and 29 percent of large companies believe they have the digital talent they require.

Three quarters of Business Roundtable CEOs say they can’t find workers to fill jobs in science, technology, engineering and mathematics (STEM)-related fields.

For the first time in recent memory, in May, August and September 2018, the TechServe Alliance, the national trade association of technology staffing and services companies, reported no tech job growth in the U.S.

According to TechServe Alliance CEO Mark Roberts, “[T]his is totally a supply side phenomenon. There are simply not enough qualified workers to meet demand.”

It’s a sentiment shared by the newest generation to enter the workforce: Most Gen Z workers (the successors to millennials) believe that the hard skills needed for the workplace are changing faster than ever.

The second reason for the skills gap is that employers care a great deal about a second set of skills: soft, or so-called human” skills like teamwork, communication, organization, creativity, adaptability and punctuality.

Employers want workers who will show up on time and focus on serving customers rather than staring at their phones. They need employees who are able to get along with colleagues and take direction from supervisors: a particular challenge for some headstrong millennials.

In a LinkedIn study of hiring managers, 59 percent said soft skills were difficult to find, and this skill gap was limiting their productivity. A 2015 Wall Street Journal survey of 900 executives found that 89 percent have a very or somewhat difficult time finding candidates with the requisite soft skills. 

Why do these gaps exist, and why do they persist? As America’s economy has digitized over the past decade, our legacy infrastructure — postsecondary education institutions and workforce development boards — has not come close to keeping up.

College is increasingly unaffordable; the average student who borrows to attend college graduates with nearly $40,000 in student loan debt. 

Because life tends to “get in the way” of any multi-year task — particularly for students most in need of the social mobility that postsecondary education is supposed to provide — nearly half of all students who undertake degree programs fail to complete (and many drop out with debt — the worst of both worlds).  

But higher education leaders typically aren’t incentivized to align curricula to employer needs. Few are interested in what employers are seeking, particularly for entry-level positions. 

Moreover, the digitization of the economy has also changed hiring practices, with real implications for our workforce. Faced with the deluge of résumés over the past decade, hiring managers have sought to tighten the screen and have done so by adding skills to job descriptions. But the skills that have been added to job descriptions are overwhelmingly digital and software skills.

Across virtually every industry, technical skills now outnumber all other skills in job descriptions, particularly for entry-level jobs. Without the digital skills employers are increasingly listing in entry-level job descriptions, too many college graduates are invisible for exactly the positions they want (and need in order to make student loan payments).

Perhaps taking inspiration from the growing “deficits don’t matter” crowd, skeptics continue to shrug their shoulders at the skills gap. But that’s a dangerous approach.

In a recent survey of U.S. hiring managers, 90 percent reported it difficult to find and hire the right tech talent, and 83 percent said the shortage of tech talent is slowing company revenue growth.

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Another survey found that three-quarters of hiring decision-makers fail to see much connection between a worker’s education and their job performance.

Perhaps the biggest casualties of the skills shortage are the 10 million workers who have stopped seeking work and dropped out of the workforce in the last decade — many because they didn’t have the skills employers were seeking.

There are few challenges more consequential to America’s future than the skills gap. It is impeding economic growth, promoting generational inequity and destroying the American Dream.

Skeptics be warned: The skills gap is real, it matters, and it won’t close unless America’s employers and higher education institutions do something about it. 

Will Marshall is co-founder and president of the Progressive Policy Institute. Ryan Craig is managing director of University Ventures and a frequent commentator on higher education and workforce issues; his most recent book is "A New U: Faster + Cheaper Alternatives to College." This piece is based upon a report released by the Progressive Policy Institute.