Finance

Skills Gap’s Financial Implications Call Business Leaders, Educators to Action

Young people graduating into today’s economy have some of the best prospects in a generation. Unemployment is at record lows, the nation’s longest economic expansion shows no sign of letting up, and businesses are desperate for qualified workers. 

According to a new survey of HR decision-makers, 94 percent say that difficulty finding highly qualified candidates is impacting their organization’s ability to grow. They report spending tens of thousands of dollars recruiting and training new hires, and a third of those surveyed said even those investments aren’t enough. 

These findings reinforce the recurring message that the skills gap is a tremendous threat to America’s long-term economic competitiveness. But what’s perhaps most interesting about the results of this survey is the other message it communicates: that the skills gap is just as much about a shortage of soft skills as it is about “hard” technical skills. HR decision-makers said that for every five new hires that don’t work out, a lack of technical skills is only the problem for one of them. Meanwhile, a lack of soft/professional skills is cited as the issue in half of all cases. 

We can address this increasingly complex issue — if we start with the future talent pool while they’re still in school, even as early as middle and high school. HR professionals, parents and even students themselves agree that high schools can do more to prepare students for a career after graduation. 

We need a new approach — one where earning a diploma means students are truly prepared to tackle what comes next. This means thinking broadly about career readiness, beyond a limited view of what career technical education has looked like for decades.

Technical skills are important, but soft skills even more so. And today’s students learn teamwork, communication, work ethic and accountability by practicing those things — not by being lectured about their significance. They can — and should — be learning them before they enter the workforce.

Businesses have an important part to play here, too. They are the ones that can provide students with the opportunities for work-based learning through job shadowing, internships or apprenticeship programs. They are also the ones best-suited to weigh in on CTE course design, ensuring what students are learning in school is mutually beneficial to industry in the long run.  

HR decision-makers know this is the new business imperative. In our same survey, only 36 percent said companies were doing enough to prepare students for a career after graduation. And 96 percent said companies should definitely or probably be offering more apprenticeships and internships to better prepare today’s high school students for tomorrow’s careers.

An added benefit of strong public-private partnerships is that they also act as a solution to today’s trillion-dollar student debt crisis, which still threatens to swallow up the futures of too many young people — and put businesses’ bottom lines in jeopardy. 

Eighty-four percent of HR decision-makers said student loan debt is affecting their organization, with 41 percent saying it’s causing concern over their employees’ personal finance issues, and one-third having had an employee ask for a raise to offset student loan expenses. This continues to happen despite the fact that a two- or four-year degree was the most important screening criterion for only 15 percent of respondents. 

The skills gap as we used to know it is changing with the economy, expanding to include the soft skills that too many people aren’t learning in the current educational system. With it, businesses’ recruitment and training strategies have changed too, in a way that’s unfortunately required them to dig into their pockets quite a bit deeper. 

The good news is that with this awareness, the path forward is both actionable and unambiguous: businesses interacting with students sooner, and students being able to try out the skills they’ll need to succeed. It’s a path that works for students, for industry, and ultimately our country.   

 

Dr. Shaun McAlmont is president of career learning solutions at K12, Inc. 

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