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Job Shock, Part Five and a Talent RX

Job Shock, Part Five: Solving the Pandemic & 2030 Employment Meltdown with a Talent RX: RETAIN Partnerships

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Five and a Talent RX.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

The COVID-10 pandemic has triggered widespread doubts about the future. The U.S. job market is in chaos. At the end of April 2021, the U.S. Bureau of Labor Statistics reported an unprecedented 9.3 million job openings across many business sectors. Might this finally be the right time to start anew and find fresh solutions to the skills-jobs shock now underway?

Today’s unprecedented economic upheaval presents an unprecedented opportunity. There are millions of unemployed on the one hand, and rapidly evolving job-skill needs on the other – providing a way for the former to solve the latter’s problem. Communities across the United States have a diversity of underdeveloped talent. They badly need local pathways that promote equity by offering high-quality educational opportunities that are accessible to everyone. This means providing more students and workers with enhanced talent development programs aligned with personal aptitudes and interests and the needs of local businesses and organizations.

The current U.S. labor market is in desperate need of more people who have developed their cognitive, interpersonal, and leadership skills. People who can problem-solve. These people aren’t going to drop from the skies. You can’t click for brains. How can we successfully prepare more people for the skilled jobs of today and tomorrow?

RETAINs

Across the United States at least 1,000 non-profit groups have organized to reinvent local talent-delivery systems. These public-private partnerships bring together a broad cross-section of community groups, such as parent organizations; chambers-of-commerce; elementary, secondary, and higher educational institutions; workforce boards, regional economic development commissions; local government units; unions; service clubs; foundations and other non-profit social welfare agencies. (See Figure 1.)

To provide a descriptive term for such organizations, we coined the term Regional Talent Innovation Network (RETAIN). They have many local brand names, such as The New North, High School Inc., the Vermillion Advantage, ConxusNEO, and Manufacturing Renaissance.

RETAINs began in the 1990s to respond to the economic erosion of their communities. Instead of seeing their young people move elsewhere for employment, they sought to retain them in their communities. Keeping the population stable also enabled communities to retain local businesses and thus stop the erosion of the tax base. Once these communities built a skilled workforce, they could attract new businesses to locate there.

In the short term, RETAINs build a network in which local businesses collaborate with training organizations, educational institutions, and in-house training departments to provide training for vacant jobs and to upskill current employees. This both enables employees to move into higher-skill/higher-paying jobs and enhances the profitability of local businesses through the more efficient use of new technologies. Access to pooled resources make these training collaboratives particularly beneficial to smaller businesses that cannot afford to provide their own in-house training.

In the long-term RETAINs update educational programs at all levels starting in elementary schools and extending to a wide variety of post-secondary options including certificate and apprenticeships programs. They work to harmonize existing educational programs and devise new ways to fill in skill gaps. RETAINs help reconcile funding streams and secure new revenue to integrate K-12, career education, higher education, and adult training. (See Figure 2.)

We agree with a Wall Street Journal editorial (June 9, 2021) that failing public K-12 schools are the “root cause of America’s skilled-worker shortage.” K-12 schools are locally controlled. The purpose of a RETAIN is to foster communication and cooperation among diverse community sectors. Many students today lack motivation as they find schooling too abstract and unrelated to the “real world.” K-12 students and teachers need active connections to local employers in order to learn about the education and skills required for careers in today’s workplaces. Local businesses need to interact with public and private high school students through sponsoring career education programs, internships, and other activities that allow students to explore career areas that align with their aptitudes and interests.

RETAINs see themselves as joint partners in community building and in the renewal of the U.S. free enterprise system. They are rebuilding the pipeline that connect their community members to the job market. The keywords here are “bottom-up collaboration” – defined as a joint authority, joint responsibility, and joint accountability among all the partners.

RETAINs Can Make a Difference

The good news is what we can expect if RETAINs are instituted across America to rebuild the U.S. workforce. (See Figure 3.) In 2030 the U.S. economy will support about 170 million jobs; 128 million of them will be high-skill or mid-skill jobs. RETAINs can increase the expected 56 million high/mid-skill workers by retraining 30 million additional workers and preparing 10 million more students for skilled employment.

Combining these job-ready workers with additional automation will reduce the number of vacant jobs across the economy. There still will be a substantial, but not an overwhelming number of surplus workers. However as more communities use the RETAIN model to sustain job-ready workforces, the number will fall. The American middle class will grow again as high-wage employment rises.

Moving Forward

The COVID-19 pandemic has heightened Job Shock in the United States and around the globe. It has disrupted schooling leaving the economically disadvantaged even further behind. Millions of workers have either changed jobs or faced unemployment. Education and training solutions are more vital than ever before. RETAINs can be an important force in preparing students and workers for positions in America’s fast-paced, technologically driven, knowledge economy. Regional development can better support broad economic expansion and ensure that the United States remains a highly competitive global economy.

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Job Shock, Part One

Job Shock, Part One

This week, we are proud to introduce a new guest blogger, Edward E. Gordon. In Job Shock, Part One, Gordon is beginning a three-week series of thoughts for your consideration. The founder and president of Imperial Consulting Corporation in Chicago, Gordon has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock Part One: Solving the Pandemic & 2030 Employment Meltdown

Introducing a New White Paper.

Part I: Introduction: Why Read This?

Welcome to the Fourth Industrial Revolution in a COVID-19 challenged world economy. Their combined impact on the U.S. job market will stretch to 2030 and beyond. Say hello to “Job Shock!”

“Job Shock: Solving the Pandemic and 2030 Employment Meltdown” will be released as monthly topical Gordon Reports. This will give readers a greater opportunity to consider their outlook on the future of employment. “Job Shock” will present our most up-to-date research on the future of the U.S. labor market over the coming decade. We will review both long-term and short-term problems and solutions to them that are now underway across the United States. “Job Shock’s” premise is that America’s students and workers are as much in need of knowledge injections as they are of vaccine injections against COVID-19.

Defining the Realities of Job Shock

Technologies that have transformed American workplaces now require higher skills. The United States is not creating more high-pay, low-skilled jobs; it is creating more high-pay, higher-skilled jobs.  Unless we confront the reality of this talent mismatch, we face a decade in which there will be too many unskilled people without jobs who run a high risk for lives in poverty and too many skilled jobs without people. This potentially threatens to undermine the broader economy and increase the social disruption that has already begun.

In today’s job market at least 50 percent of today’s “good jobs” (those with higher pay and benefits) do not require four-year college degrees. These jobs need students who graduate from high school with a good general educational foundation, i.e., strong reading/math comprehension, good written and verbal communication abilities, problem-solving and teamwork skills. Students then need to obtain a career certificate, apprenticeship, or a two-year degree from a technical or community college. We are not preparing enough students for the talent realities of the current U.S. job market.

The United States has millions of well-educated, talented workers.  But the unrelenting demands of Job Shock tell us that we will need to double their numbers over this decade to run our high-tech economy.

Job Shock from COVID-19

The ongoing COVID-19 pandemic has only exacerbated this skills gap and sped up employment meltdowns. It caused the sharpest increase in the official U.S. unemployment rate ever recorded, rising from 3.5 percent in February 2020 to a peak of 14.7 percent in April. At the close of 2020, 12 million of the 22 million jobs lost at the start of the pandemic had been regained. The December unemployment rate of 6.7 percent reflects the number of workers permanently laid off because of the pandemic. The labor force participation rate also remains low.

But the effect of COVID upon different industries and jobs has been very uneven. The leisure and hospitality sector has been particularly hard hit with its low-wage workers experiencing the greatest job loss. Payrolls for couriers and messengers have increased by over 20 percent.

While many businesses lay off workers, others are struggling to fill job vacancies. Overall U.S. businesses continue to cut job training programs, further widening the skills gap. Businesses are increasing investments in automation and technologies that facilitate remote work. The continuing Fourth Industrial Revolution will further raise demands for workers with the skills needed to invent, use, maintain, or repair advanced technologies.

The COVID-19 pandemic is illustrating that skill shortages can have lethal results.   COVID-19 vaccine manufacturers have hundreds of vacant jobs in such areas as engineering and quality control. There are acute shortages of critical-care doctors and nurses as well as lab technicians to process COVID tests.  How many of the over 400,000 dead (greater than the death toll of the U.S. armed forces in World War II) could have been saved if we had fewer shortages of medical personnel in COVID hot spots?

Also, the skilled people we take for granted to meet our daily needs are in short supply. As computer systems have become more and more central to our daily lives, breakdowns and threats to the security of our private information proliferate. Finding a qualified plumber, carpenter, electrician or medical technologist has become more difficult in many communities. If more effective talent development efforts are not initiated, there is a real danger that the world will not end in a big bang, but that it will come to a slow grinding halt due to a lack of workers with the skills needed to maintain advanced technologies. Welcome to Job Shock!

Job Shock Objectives

The goal of the “Job Shock White Paper” is to raise awareness of the broad scope of the changes needed to equip students with the education and skills needed for 21st-century jobs and careers. And we must retrain workers with the specific skills needed by employers. There are solutions already underway in communities across the United States that can help your local area. But these solutions are not easily available to all.

We see the most promising responses to Job Shock coming from regional cross-sector partnerships composed of business owners and managers, educators, parents, government officials, union leaders, non-profit associations, and others. These partnerships have begun regionalized initiatives to rebuild their outdated education-to-employment systems.

“Job Shock” is a call to action. We need to work together in initiating the systemic changes needed to prepare more people for better-paying jobs and thus create a more equitable and prosperous economy over this decade.

Part II of “Job Shock” will provide an overview of how technology has dramatically transformed workplaces and occupational requirements over the last 50 years. Unfortunately, other parts of American society have failed to adapt to these labor market changes thus contributing to the social unrest the United States is now experiencing.  We invite to submit your questions or comments by email or by calling us in Chicago at 312.664.5196.

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Talents and Skills

Learning Without Scars was created to fill a void in the Capital Goods Industries, specifically the light and heavy equipment space.

With technical schools closing at an alarming rate the markets we serve were becoming unable to find the talents and skills they required in the operational areas of the business, parts and service specifically. I have written extensively on the German trade school structures and the benefits it provides German employers. We no longer have a viable trade school preparation for the parts business.

To that end, here at LWS we have developed training programs for the parts counter job functions. We have the same for the parts office and the service office. We also have programs for the parts warehouse, for service writers and service foreman and lead hands. All of these programs were created after dealer customers had expressed a need and a desire to help employee development.

The report from Edward Gordon, a colleague, is a clear affirmation of why we are doing what we do in training.

I would like to pose a question to everyone. What are you doing to attract new employees, to retain the ones you have and to develop all of your employees to meet the needs of future job?

There is a critical need on our Industry. Without the proper number of talented and skilled employees your business is at risk.   

The Time is NOW.

 

Please read this Edward Gordon article.

Knowledge Shock Part V: Job Evolution Causes Skill Shortages and A Search for Solutions

Job Evolution 1970-2010

In 1970 John, whose father was a plumber, graduated from high school. He began working in a Midwestern automotive-parts factory. It had an entry-level job training program and paid him a good wage. At that time, about 66 percent of entry-level jobs in manufacturing and other employment sectors required only a high school diploma. Business management and professional positions required a college education. Also, apprenticeship completion or specific skill-training certificates were needed to qualify for some mid-skilled occupations.

 Fast forward to 1990 when John’s daughter Linda became an office file clerk after graduating from high school. She found out technologies had changed occupational skill requirements in both offices and factories. High school graduation was no longer a passport to the middle class. By 1990, 55 percent of jobs required education or training beyond high school. However, many employers offered workers on-the-job training.

John’s grandson, George, was always interested in cars. After high school graduation in 2010, George decided to seek employment in an auto-production plant. But he was surprised to discover that a largely unrecognized Fourth Industrial Revolution had radically changed entry-level jobs requirements. Robots now performed many repetitive tasks on car assembly lines. George also learned that this local auto factory only sought workers who could operated computer-controlled equipment. Working on teams, they also need needed to have the technical skills required to assemble many different auto models in smaller runs as sales orders came in from the manufacturer’s dealer network. The plant had no entry-level job training. Applicants were expected to be job ready from day one!

By 2010, low-skill jobs had declined to only 33 percent of the U.S. labor market. They were also low paying jobs. The majority of even mid-level occupations now required special career training beyond high school.

Talent Shortages by the Numbers

In 2010 there were about 97 million mid-level and higher skilled jobs across the United States. Yet only 43 million American workers met the general education and career training requisites to fill them.  U.S. businesses made up a national gap of 54 million skilled workers through increasing automation, importing skilled foreign workers, poaching workers from competitors, or exporting higher skilled jobs to overseas locations with the requisite talent pool. Only about 20 percent of U.S. businesses offered job training programs. This talent shortfall resulted in 4 million vacant jobs across the U.S. economy.

Over the next decade the skills-jobs disconnect continued to expand. By 2017 two-thirds of jobs in the U.S. labor market required workers with post-secondary specialized career training. International talent shortages had also increased, making it much more difficult for U.S. businesses to either import talent or find an off-shore location with the needed skilled workers. A global talent showdown had begun in earnest. In 2017 nine million jobs remained unfilled across the United States. The U.S. Chamber of Commerce estimates a loss of $26,000 per vacant job in profit or productivity for a business. This represents an over $230 billion loss to the U.S. economy.

The U.S. talent shortfall is a significant part of a much broader global talent train wreck. The worldwide estimate of 2022 job vacancies range from 45 to 95 million skilled positions. Many recent surveys of American executives place this talent crisis at the top or near the top of management concerns. For example, a 2018 survey conducted by the Associated General Contractors of America indicated that this industry will be short two million skilled craft professionals by 2020. A recent National Association of Manufacturers survey for the first time reported  “attracting and retaining a quality workforce” as the respondents’ top business challenge.This was also the case in the February survey of the National Federation of Independent Businesses. Ninety percent of businesses seeking workers reported “few or no qualified applicants” for open positions.

Two Major Skills Initiatives

Two significant approaches for confronting the escalating shortages of skilled workers are gaining momentum. The “2017 Training Industry Report” (Training, November 2017) showed that U.S. businesses made an unprecedented $23 billion increase in worker training in the past year. Total expenditures rose from $70.6 billion to $93.6 billion or 32.5 percent. The majority of these funds were invested in specific job raining programs for workers rather than in management education programs as in years past. Over the past few months there has been some increase in the labor participation rate. It is an indication that more companies are again beginning to offer job training to new hires. This is opening the possibility of employment to so called “discouraged workers” who until recently have been sitting on the U.S. labor-market sidelines because their skills were not up-to-date.

A second more comprehensive approach to tacking the current skills crisis are regional public-private partnerships focused on economic development and reforming the education-to-employment system. These Regional Talent Innovation Networks (RETAINs) offer a process for reinventing their local talent-delivery systems. In the short term, these cross-sector initiatives composed of businesses, educational institutions, unions, government agencies, and non-profit community groups focus on retraining workers and the unemployed with the skills currently needed to fill the vacant jobs of regional employers. RETAINs are of particular value to small businesses as they offer a viable way of pooling their resources to inform, attract, and prepare skilled workers to fill jobs.

In the long term, RETAINs seek to rebuild the workforce pipeline through raising K-12 educational standards and implementing career-skills preparation programs. Beginning in elementary school students need to be well grounded in reading, writing, mathematics, and verbal communication skills. To accommodate the wide diversity of students’ aptitudes and interests, a wider diversity of high school programs are needed such as STEM academies, career education programs, and pre-apprenticeship and apprenticeship options. This means more students will leave high school with solid educational foundations that prepare them to successfully complete the post-secondary career education and training needed to fill today’s and tomorrow’s ever-rising job requirements. It is notable that the High School Inc. Foundation (previously profiled in  Gordon Report) has received the 2018 Citation for Career Education and Excellence from the American Association for Career Education for its leadership role in the development of six career academies at the Valley High School in Santa Ana, California. The High School Inc. Foundation is a good example of the over 1,000 RETAINs now operating across America.

More information on many local RETAIN “brands” across the United states is now available in an updated paperback edition of Future Jobs: Solving the Employment and Skills Crisis published by Praeger in March 2018. It offers many case studies of the the accomplishments of these cross-sector partnerships in updating regional training and education programs and thus reviving local economies.

The Urgent Need for Action Addressing the Skills Crisis

Unless business investments in job training are drastically increased and the RETAIN movement grows exponentially, by 2022 the skills-jobs disconnect will have a dire impact on the U.S. economy. America is facing a demographic tsunami of 30 million baby boomers retiring from the workforce. In the cohort of millennials entering the workforce, only about thirty percent have the education and skills needed for advanced technology workplaces, but at least sixty percent need to be at this level for the high tech, knowledge-based economy of 2022.

The Gordon Report “Knowledge Shook Series” has spotlighted some of the most crucial forces behind the jobs-skills crisis. We have examined how American culture across the business community, schools, unions, and parents has failed to keep pace with the significant knowledge expansion required by technology change. We have also seen how popular culture can promote addiction to social media and other internet venues that reduce cognitive development and interpersonal skill growth. Over the past decade Knowledge Shock has morphed into Job Shock as many American workers now fear that escalating technology changes have placed their jobs at great risk. Inventing technology has proved to be the easy part; changing society’s cultural willingness to place education and workforce training on steroids remains very difficult. 

As technology has continued to expand job requirements, simplistic populist solutions for protecting jobs and industries are being advanced by the extreme right and left of the U.S. political spectrum. Populists offer a new form of tribalism. By dividing society into many warring factions, they seek to attack and eliminate the “enemy” opposition rather than pursue consensus through negotiation. This tribalism is in direct opposition to the democratic beliefs and traditions upon which our great American Republic was founded and has developed over the past 242 years. We remain fundamentally opposed to this attempt to undermine U.S. society.

As we contend with this social divisiveness, the American general public needs to be made aware of the urgent need to answer the two great questions of Job Shock.     

  1. Why has technology growth clearly outpaced the knowledge development of the U.S. workforce?
  2. How can we develop a new consensus that will lead to the overall growth of a well-educated American workforce?

The answers to these social issues will define how well we make the historic employment transition that America now faces. Failure is not an option.

Edward E. Gordon is president and founder of Imperial Consulting Corporation (www.imperialcorp.com). His book, Future Jobs: Solving the Employment and Skills Crisis, a winner of an Independent Publishers award, is now available in an updated 2018 paperback edition.