Oct 02, 2014 - 9:00am

Finding a Way Forward to Bridge The Skills Gap

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Whose job is it to train employees?
Whose job is it to train employees?

Please join Urban Alliance and the U.S. Chamber of Commerce Foundation on Friday, October 3 for Youth Employment Matters! High-Quality Solutions and the Role of Corporate Engagement.This event will feature discussions on the importance of youth workforce development, collaborative initiatives that are working to narrow the current skills gap, and ways for the business community to further support development of America's future workforce.

“Just whose job is it to train workers?” That’s the question a July 16 Wall Street Journal headline posed to readers—and as many companies struggle to find qualified workers to fill open positions, it’s a critical challenge for the long-term health of the labor market.

The question brings into focus the “skills gap,” in which job seekers lack the skills or qualifications for the jobs employers are seeking to fill. Many observers attribute the slow recovery of the U.S. job market from the 2007-2009 recession, at least in part, to this disparity.

The skills gap has emerged as a contentious issue among economists. Some, such as Peter Capelli, a management professor with the Wharton School of Business at the University of Pennsylvania, questions the idea of a skills gap. Capelli suggests employers have come to expect employees to arrive on the job with the needed expertise, while neglecting training and tutelage to help nurture the development of the skills they’re looking for.

In a rejoinder to Capelli and other skills gap denialists, economist James Bessen of the Boston University School of Law suggests that the skills gap is quite real, predating the most recent slowdown. Bessen argues that part of the problem is a lack of clarity about what constitutes a skills gap in a time of rapid technological innovation. He dismisses the notion that the “skills gap” is a fiction peddled by business leaders.

“Really? A worldwide scheme by thousands of business managers to manipulate public opinion seems far-fetched,” Bessen writes at the Harvard Business Review. “Perhaps the simpler explanation is the better one: many employers might actually have difficulty hiring skilled workers. The critics cite economic evidence to argue that there are no major shortages of skilled workers. But a closer look shows that their evidence is mostly irrelevant. The issue is confusing because the skills required to work with new technologies are hard to measure. They are even harder to manage.”

And indeed, for employers and policymakers, the skills gap appears very real indeed. That’s why leaders on both sides of the ideological divide, and in both the public and private sectors, are seeking solutions to ensure that workers receive the training, education, and skills development they need to compete in today’s economy.

One Way Forward: Apprenticeships

One solution embraced by some employers may sound old-fashioned—apprenticeships.

Recent accounts in The Washington Times and The Wall Street Journal have detailed how Volkswagen’s operations in Tennessee have imported an apprenticeship model from the company’s native Germany. Training workers directly to operate and maintain the sophisticated robotic technology in their manufacturing facilities, Volkswagen executives say, ensures that they’ll get the skills they need. Meanwhile, workers trained through such apprenticeships may be easier to retain and promote over time.

"We've learned it is better to build our own workforce instead of just relying on the market," Volkswagen’s Hans-Herbert Jagla, human resources chief for the auto manufacturer’s facility in Chattanooga, Tenn., tells The Wall Street Journal.

Toward a Public-Private Partnership

But does it have to be that way? One official explains that a greater sense of collaboration between business and government could help to bridge the gap.

“The biggest challenge we see is the private and public sectors are not talking in the U.S.,” Stefanie Jehlischka, vice president of the German American Chamber of Commerce, explains in The Washington Times. “Companies have never gotten involved in the educational system, and there are few or no collaborations.”

That division may be changing. In his 2014 State of the Union address, President Obama discussed apprenticeships as a necessary tool to address the skills gap. And in April, the administration announced a $600 million effort to expand job-training and apprenticeship programs.

Boston University’s Bessen points to other ways that employers can better tackle the skills gap through improved training, and by collaborating with the public sector.

“What is hard to measure is often hard to manage,” Bessen writes at the Harvard Business Review. “Employers using new technologies need to base hiring decisions not just on education, but also on the non-cognitive skills that allow some people to excel at learning on the job; they need to design pay structures to retain workers who do learn, yet not to encumber employee mobility and knowledge sharing, which are often key to informal learning; and they need to design business models that enable workers to learn effectively on the job (see this example). Policy makers also need to think differently about skills, encouraging, for example, industry certification programs for new skills and partnerships between community colleges and local employers.”

‘It’s Not You, It’s Me’

A perhaps overlooked aspect in combating the skills gap is the responsibility of workers and job-seekers to develop and maintain the skills they need to compete in a global job market.

A recent survey conducted by the web-based educator Udemy revealed that many American workers believe that the skills gap applies to other workers, rather than themselves. Sixty-one percent of Americans surveyed said they believe there’s a skills gap—but it doesn’t affect them. That may be a dangerously wrong-headed assumption for workers in a rapidly changing economy.

"These findings indicate that despite a widespread recognition that the skills gap exists, American employees share an 'It's not me, it's you’ mentality," said Dennis Yang, CEO of Udemy. "The data also shows that while higher education may be effective at helping individuals score their first job, skills and knowledge learned at academic institutions become obsolete as Americans change professions and skill-set requirements change. We're beginning to see workers take ownership of their own skill-set development with particular emphasis on developing technology skills, but in today's competitive economic climate, it's simply not enough."

In today’s economy, workers will need to be more entrepreneurial in pursuing opportunities for new skills and expertise, rather than waiting on someone else to provide it.

The skills gap didn’t arise overnight, and it won’t be fixed overnight. Nor can it be traced to a single cause—it’s a complex challenge for which there’s no single “silver bullet” solution. But with reforms to public education and training opportunities, investment by private sector companies in workforce development through apprenticeships and other training programs, and workers taking more ownership of their skills development, the solutions may not be as distant as they seem. 

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Freelance writer