Challenges Presented by the Widening Skill Gap

by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc.

There are at least five growing, major challenges to maintaining a skilled national labor force. These forces are causing those organizations who could help to, instead, spend tremendous sums of money on “whack-a-mole” type efforts. Sure, this approach sustains all of the profit and non-profit organizations that sprung up to take advantage of the chaos, but if we are serious about solving this issue that has undermined economic recoveries and stifled economic growth for over 30 years, we need to get serious.

It starts by critically evaluating the challenges that have plagued the U.S. labor force and have been barriers to an employer’s commitment to American labor. Like nearly all challenges, one can choose to target the underlying cause, treat the symptoms, mask the symptoms, define an alternative – but not necessarily relevant – cause and focus on that, or ignore symptoms and cause and hope for divine intervention.

Choice of action matters. Take, for example, the choice to take a prescribed “cholesterol lowering” statin that inhibits the body’s production of lipids – fats and fatty substances, producing a cholesterol number within an acceptable range but at a cost of blocking or impairing other vital body functions and often producing “side-effects.” Your doctor may have good news about your cholesterol level during this visit but soon he might be discussing other, more serious issues with you such as, according to the Mayo Clinic, your muscle pain and damage, liver damage, increased blood sugar and type 2 diabetes, neurological side effects… Choosing to treat a symptom without determining why your body is producing excess lipids in the first place may leave the underlying cause unaffected.

Similarly, focusing resources on symptoms and ignoring the underlying cause of a non-systems approach to worker development may lead (and one could say may have already lead) to depleted resources and lost opportunity. Continuing to turn out graduates, some with outdated or non-essential skills which are bolstered by marginally relevant credentials, may lead to a feeling of action but yet the skill gap widens. Unless each of the following five major challenges are addressed, it is unlikely that the skill gap will move towards closing, and any effort to bring back the generations of lost workers into meaningful employment prohibitively difficult.

Jobs have become a moving target. Accuracy of on-the-job training has to be sharper. It should be supplied by the employer (on equipment equipment and to employer processes), and is more urgent and accuracy-dependent than existing employers have prepared themselves. Educational institutions can have any meaningful impact if focused and relevant. Workforce development efforts and resources need to be applied in a way to facilitate these adjustments, not distract from them.

Threat 1: Workforce development efforts stuck in the past – just as there are decades of irrefutable proof that cutting taxes on the wealthy and ultra wealthy does not create jobs, there is also decades of experience and empirical evidence that assessments and traditional classroom and online training delivery alone have little impact on closing the skills gap. In the February issue of the Proactive Technologies Report newsletter article entitled, “An Anniversary That You Won’t Want to Celebrate: 30 Years Later and The Skill Gap Grows – Is it Finally Time to Rethink The Nation’s Approach?”, three decades of evaluation of the success (or lack thereof) of closing the skills gap were presented. The focus of repackaging and rebranding the same strategies apparently had no affect on closing the gap. Consequently the skills gap widened, making the challenge more urgent and more critical.

This doesn’t mean that assessments and classroom/online learning doesn’t play a role in skill development. It does; in the development of foundation, core and higher-order core skills that make it possible for an employer to train a worker for the work they need performed and for which they are willing to pay the worker. Too much emphasis has been put on these delivery methods as the only cure for dangerously wide skill gaps, and not enough on the need for the employer to be actively and continually engaged, to have a structured on-the-job training infrastructure built around the tasks to be performed and to have a serious commitment to employee continuous improvement. The February issue of the Proactive Technologies Report newsletter article entitled “Tips for Establishing Your Company’s Training Strategy – Practical, Measurable, Extremely Economical and Scalable” explained why this is a role only for the employer and how the employer can accomplish this.

Threat 2: Too many high school graduates are not ready for college or the workforce – in an article listed in the Education and Workforce Development News section of this newsletter entitled “Not Ready for College-Level Work“, the author Sarah Butrymowicz reports, “The vast majority of public two- and four-year colleges report enrolling students – more than half a million of them – who are not ready for college-level work, a Hechinger Report investigation of 44 states has found. The numbers reveal a glaring gap in the nation’s education system: A high school diploma, no matter how recently earned, doesn’t guarantee that students are prepared for college courses. Higher education institutions across the country are forced to spend time, money and energy to solve this disconnect. They must determine who’s not ready for college and attempt to get those students up to speed as quickly as possible, or risk losing them altogether.”
A low-end estimate of around 570,000 enrollees are in remedial courses in the 2014-2015 year. These course do not count toward a degree (since it was assumed the core skills were learned in high school) and around 40% of 2-year colleges (25% for 4-year colleges) of those enrolled in remedial courses do not finish these course and drop out of the program. The report goes on to estimate that the cost to colleges and taxpayers is around $7 billion per year.

Since this report focuses on the high school graduates that apply to college, can one deduce that those who dropped out of remedial courses, plus those that went from high school to the labor force, add to eroding quality of core skills in the workplace?

When a labor force on average does not have the core foundation upon which only the employer can build task-based expertise, the employer’s job becomes more costly and more resource-consuming than most are willing to permit. More money is spent on recruitment and assessments of even moderately skilled labor. Many workers are “turned-over” until the right ones are found. It is difficult to build anything on a crumbling foundation. STEM (Science, Technology, Engineering and Math) courses help, but that is more of band-aid than a long-term solution. So is privatizing schools to create classes of skilled graduates within an already classed system will add to, not improve, the underlying problem. The effects of years of budget cuts and misplaced priorities in the public education system have eaten away at what used to be the envy of the world.

Threat 3: Eroding skills of skilled, but dislocated, workers who are still available in large supply, still waiting and available for work – many firms need to revisit their hiring criteria. After the Crash of 2008, millions of highly skilled workers, in nearly all industries, were let go while employers waited for the economic decline to bottom, they developed a strategy for recovery and they could restaff and resume operations.

Unfortunately, finding bottom took several years. Many displaced workers moved on, some went back to school to prepare what they hoped was a more stable career. Most fell on hard times, losing their homes, their family and their place in society.

When employers started hiring again, they continued to include criteria such as credit report history – which should not only be disallowed by the Equal Employment Opportunity Commision’s Fact Sheet on Employment Tests and Selection Procedures as hiring criteria for most jobs, it is only telling the hiring manager how well the prospective employee weathered the Crash of 2008 which was not of their making. It has no job-relatedness, except perhaps for high security job consideration.

Another useless criteria is how the long the worker has gone without a job, or without a job in their skill area. As stated, the Crash took much longer than a normal recession to bottom – delaying any recovery –  so there were in most cases not jobs to be had. Evaluating an employee on how hard it was for them to find a job that didn’t even exit yet seems disconnected from reality.

There are still millions of chronically unemployed and underemployed (perhaps not currently in their field) workers that have demonstrated the ability to learn the tasks of the job, demonstrated strong work ethics and job loyalty, and a desire to remain in a position that pays enough to sustain themselves and their family. Even if an HR manager is aware and has an understanding of any fallout from the Crash that follows a worker like this hired into the company, rebuilding the core skills that might have gone stale while sitting on the bench and training these workers on the tasks of what a firm wants performed is still far cheaper, will take far less time and the worker, once stabilized, will be much more grateful and loyal than taking a chance on a blank slate.

Threat 4: Currently skilled workers + advancing technology + process improvement = skill erosion – Continuous Improvement is a term used across industries and throughout each firm’s operation. Typically it is applied more as a concept of continually improving systems and procedures to maintain and increase efficiency and effectiveness. It is, however, too often not applied to the worker.

In the 1980’s, computers and microprocessors began to enter nearly every facet of the workplace and force an evolutionary change in the core and task-specific skills necessary for a worker to still perform in their job. The warning went out almost immediately such as this from the Michigan Industrial Technology Institute in 1987, “Some companies have calculated that the “occupational half-life*” of an employee has declined, on average, from 7-14 years to 3-5 years” (equating it to nuclear decay, the length of time necessary for 1/2 of the employee-held knowledge, skills and abilities for competent performance (for the job classification originally hired) to become relatively obsolete).

Fast forward to today, apparently the concern has yet to be properly addressed. The minute the employee learns a task for their job, forces begin to change how they will perform the same task next time, or replace that task with other tasks. Engineers, applying continuous improvement strategies, continue to design different ways, better ways, partially or fully automated ways of doing the same task. Without continuous improvement of the worker, once prerequisite knowledge, skills and abilities and the task mastery they once had moves toward obsolescence. If neglected too long, an efficient and productive worker can become merely a labor cost, easy to justify for elimination.

With the proper job/task analysis data (revalidated on a regular schedule or when major changes occur that affect content validity) used in a current and accurate structured on-the-job training program that trains and recertifies the worker on a scheduled basis, this challenge can be effectively mitigated and what could have drifted from an asset to a cost can be maintained as a valuable company asset with work wisdom and expertise.

Threat 5: Retiring Skilled Workers and Escaping Expertise – Long before the Crash of 2008, employers appeared to awake to the real possibility that a large part of their workforce would be retiring in the coming years. The Covid-19 Pandemic expedited this trend to some degree. They feared the repercussions that would certainly follow; disruption of operations, loss of valuable technical expertise, loss of a valuable asset for which the employer contributed thousands of dollars over several decades to develop. But before many could prepare, the Crash made the issue moot as not only those near to, or scheduled for, retirement had to be laid off, the employers were wondering what type of labor they would need or if they would need labor at all

According to an April 10, 2012 article in IndustryWeek Magazine by Steve Minter, “Only 17% of organizations said they had developed processes to capture institutional memory/organizational knowledge from employees close to retirement, while just 13% said they were providing training to upgrade the skills of older workers.” Today, many employers appear to be cautiously proceeding and most have forgotten that nothing was done to prevent the disruptive effects of the loss of critical workers. A sort or “stay” was given to employers when many workers came out of retirement upon finding out that they were not financially or psychologically ready to retire. Many of these same workers are still working and even older, but will most assuredly leave the work force soon and take their expertise with them.

It is vital that employers give serious consideration to performing a proper and thorough job/task analysis on the critical job classifications to capture the “expertise” and best practice procedures in the heads of those nearing retirement or a return to retirement. This will facilitate the “accelerated transfer of expertise™”, to the new-hire or cross-training of incumbent workers to ensure employees are always available to keep the operation humming along.

“Over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled. The skills gap is expected to result in 2 million of those jobs remaining unfilled” according to the Skills Gap in US Manufacturing: 2015 and Beyond report by Deloitte and The Manufacturing Institute. Without immediate and accurate intervention, these challenges threaten the vitality of the U.S. economy.

For employers that realize that a structured on-the-job training infrastructure that they provide can alleviate many of these challenges, and is as critical an investment as any new technology, visit the Proactive Technologies website for more information. The PROTECH© system of managed human resource development® approach maximizes and maintains the human component, increasing work quality, work quantity, worker capacity and compliance while lowering direct labor and opportunity costs.
Proactive Technologies’ approach to worker development addresses these five challenges; either directly or by reducing/eliminating their significance. View a 13-minute preview, and/or schedule to attend one of the live online presentations to learn more and/or contact us for more information.