Two years into the COVID-19 pandemic, the U.S. economy appears on pace to produce relatively robust growth — and do so with a national unemployment rate at or near full employment, hovering at around 4%. But despite signs of recovery, an enigmatic labor market challenge is looming: Millions of Americans are quitting their jobs — or choosing to stay on the economic sidelines — leaving more than 11 million jobs unfilled.
As workplaces have become more flexible as a result of the pandemic, desired schedules, geography and remote modalities are no longer the barriers to job fulfillment that they once were. Today, the biggest issues to filling jobs are labor force participation and mismatches in skills. When it comes to a shortage of skilled talent, the pace of technological change can be a prime driver. Unemployment for the tech industry is as low as 2%, and there is no relief in sight as hiring in computer and information technology fields is projected to grow faster than all other fields between 2020 and 2030.
But what might be less obvious is that demand for tech talent isn’t coming just from tech giants like Silicon Valley. As work and commerce become more tech driven and digitally connected, it impacts labor market demand in nearly every industry and occupation. Workers in fields like health care, manufacturing, construction, supply chain and even diesel technicians and mechanics are increasingly working with sophisticated technology and systems.
That is why it is imperative that every industry prepares their workforce for future demands with continuous upskilling and reskilling. Let’s take a look at how learning leaders can use continuous learning and training to keep up with the demand in new skills.
Shorter Half Life of Skills
Skills are depreciating at a faster rate for more people than at any time in our history due to the rapid pace of technology and automation. According to research from McKinsey, disruption caused by artificial intelligence (AI) is happening 10 times faster and at 300 times the scale compared to the late 18th and early 19th century during the Industrial Revolution.
Half of all employees globally will need reskilling by 2025, according to the World Economic Forum’s Future of Jobs Report. As the half life of skills grows shorter, continuous reskilling and upskilling has become a necessity for all industries. We need to reframe the way we think about training from a one-time, all-or-nothing event to continuous and engaging experience. Workers need micro-sized bursts of continuous learning to sustain career and economic mobility over a lifetime.
Also, instead of focusing time and effort on primarily college-aged workers, learning leaders should extend their help to their entire workforce. In many ways, this new imperative for upskilling has placed new demands on higher education, training and workforce development.
Invest in Workforce Development
One of the challenges many of us face in addressing the impending skills gaps is that programs designed to retrain have struggled to keep up with demand for nascent skills and occupations brought on by the digital era. And simply waiting for the next set of unprecedented changes to retain displaced workers is not enough. As the rapid adoption of technology impact more people and more jobs, there isn’t much debate about the urgency of upskilling and reskilling. But the question remains: Who should pay for it?
Organizations need to scale new approaches for workforce development to anticipate future technological changes — and empower workers with the financial capital and information to invest in themselves.
For example, workers in the state of Maine have access to a “Lifelong Learning and Training Accounts” program, established through the state’s existing Section 529 college savings program, that enables workers to make tax-exempt contributions to save for education and training with matching support from state government. Members of Congress have taken note in recent years, with bipartisan proposals to create a federal provision 401K-like tax structure for such savings accounts dating back to at least 2007.
In the private sector, more employers are recognizing their own stake in the issue and as a result, are investing in employee education benefits and tuition reimbursement programs as a way to boost both recruitment and retention. Also growing in popularity are “internal reskilling” designed to cover all or part of the cost of training and help incumbent workers reskill for other parts of the business where demand is peaking.
With most estimates placing the average cost-per-hire at around $4,000 (and many jobs as much as 20% of the starting salary), other companies are investing upfront in education and training, betting on grown-your-own models as a more efficient alternative to costly, lengthy recruitment strategies. Investing in upskilling your talent pool can help develop entry-level employees to take move up in the company.
Colleges and universities — forecasting how this shift can impact not only their financial sustainability, but their ability to make a social impact — are also taking action. Community colleges, like Prince George’s Community College in Maryland, are creating micro-pathways — stackable credentials that are shorter and more accessible than a full degree and tied to technical skills needed in specific regions and industries.
Moving Forward
The objective is clear: We need to reduce both the time and cost of training our workforce as well as create continuous and accessible opportunities for upskilling and reskilling. During periods of economic volatility, learning and development (L&D) has historically furthered us along. This is why it is crucial that we stay ahead of the rapid pace of automation, and secure new jobs through training.
We need to build a resilient, future-ready workforce with the flexibility to quickly adapt to the ongoing changes in the world of work. To counterbalance the need for new skills, learning leaders must create new ways to provide — and pay for — continuous learning and training that moves as quickly as the obsoletion of skills.
