America needs to adapt to the transition economy
While many of us assume the path of life is one of upward progress, we are shocked to discover it oscillates instead, my friend Bruce Feiler writes in his recent best seller, “Life is in the Transitions.” Many Americans already know life and — most importantly — work, is in the transitions. Workers 25 to 34, on average, leave a job after 2.8 years, 36 percent of the economy moves from gig to gig, and 40 million Americans are now unemployed due to COVID-19. The problem is, our educational institutions, governmental support systems, and corporate structures have not caught up to this reality. They continue to build and operate an antiquated infrastructure designed for a stable, linear, 1950s American workforce. This disconnect is keeping millions of Americans from building fulfilling and economically viable careers. It is time to reengineer some of our most deeply held professional pathways.
Let’s start with higher education. The model of going to university for four years and then working for the rest of your life is becoming obsolete. COVID-19 has only accelerated this reality as many Americans are taking a gap year or reassessing the “cost” of college. At the same time, the economist Oren Cass observes that we have mistakenly designed the ideal career around a college degree, yet only 35 percent of Americans have obtained one. So, where does that leave the other 65 percent? The first step to addressing these challenges is developing and reinvigorating high-quality, life-long learning platforms like technical bootcamps, vocational schools and apprenticeships. Recent studies (such as the one done by Brookings and Opportunity America) show these programs are cheaper, have a wider acceptance rate, have a shorter time frame, and train students with practical skills required in the marketplace.
We need to build a structural solution to evaluate and credential the programs with real value. For a government that is trying to help, incentivizing and regulating nontraditional educational bodies would be a great use of taxpayer dollars.
So, what happens once you complete your training and have the skills? You encounter a series of artificial barriers called “recruiting.” Every step of this journey is fraught with outdated tools and unconscious bias making it nearly impossible for an average job seeker to match with an employer. This causes companies to miss out on some of the best talent. According to a recent study, the 71 million workers without college degrees have skills that could translate to higher-wage work. Fortunately, artificial intelligence, machine learning, and data science are reimagining every industry, especially human resources. For example, the static resume does a horrible job of actually capturing skills and capabilities. Innovative companies like Imbellus are using this new technology to build assessments that measure how people think, not just what they know. This is something a resume could never do and goes a long way in transitioning workers in declining industries to opportunities of the future. In addition, the startup, Pymetrics, leverages decades of neuroscience research and machine learning to unlock objective data about candidates. This process helps non-traditional job candidates through interview screens and results in better and more diverse hiring.
Smart data science and analysis in recruiting is just the beginning. Innovative new companies are unlocking ways of screening out poor managers to measure real performance on the job. One example is Workday a company that is building data engines to track objective performance of employees that can be taken from job to job. The public and private sector working together have the opportunity to both build upon these nascent efforts and ensure transparent and regulated use of data. If done well, they can leverage and consolidate data to understand where the skills and opportunities of the future lie. This would then be translated into smart analytics that would develop training and matching platforms allowing every person to find a role that connects their current and aspirational capabilities.
Finally, skills and education are just one piece of the puzzle when it comes to transforming our workforce, we also need updated safety nets designed for today’s workforce. For starters, in this country, worker safety nets are tied to full time employment. This made sense when the workforce was almost exclusively comprised of full-time employees. However, with 26.9 million part-time workers in America, this practice is no longer working. One model which is gaining traction to address this issue is portable benefits. This structure allows benefits (healthcare, wealth management, retirement) to be connected to an individual, rather than a particular employer, so they can be taken from job to job without interruption in coverage or loss of funding. Portable benefits are one step in helping workers plan for their future but, we need more. Government must also step in to cushion this blow. One idea is a six month “transition voucher” which will cover an individual’s basic expenses and support a pre-selected group of short-term certified retraining programs (run by the private sector). In addition, this voucher would give workers access to assessments and coaches, like those from the company BetterUp to help them navigate their next steps and build community. These basic foundations will ensure our workers psychological and technical safety during this challenging time.
American workers live in a world of possibilities governed by archaic structures. Now is the time to transform our old models leveraging technology and innovation to serve humanity rather than replace it.
Blair Miller is an investor focused on the future of work and is a senior fellow at Yale’s Jackson Institute lecturing on “Aligning Profit and Purpose.” She holds an MBA from the University of Michigan’s Ross School of Business and BA in English literature from the University of Virginia.