The United States maintains an historically low unemployment rate of 3.7 percent, with new jobs being created monthly -- particularly in booming industries like health services, manufacturing and construction. Demand for technically skilled employees has reached new highs, putting strains on businesses that struggle to fill their technology headcount quotas. In fact, 40% of employers say they cannot find the skilled workers they need for their open roles -- even in entry level jobs -- and the labor gap is only expected to get worse. In this climate, it’s an employees market -- but only for some types of employees.
Wage growth is markedly higher for advanced technical and analytical workers, like business systems analysts, research scientists, software engineers, and network engineers. And while there are many tech-centric roles in high paying fields, too few Americans have the right skills to advance -- particularly at more senior levels.
Because technology has advanced so rapidly, it’s been difficult for the workforce to keep up with the demands of modern business. For example, the Brookings Institute estimates that in 2002 only 45 percent of US jobs required a medium-to-high level of digital skills. In 2018, 70 percent of jobs required this level of expertise.
The labor shortage has definitely been felt by employers in the United States, but this problem has world-wide impact. As less technical roles are phased out, and more technology-driven opportunities emerge, McKinsey Global estimates that 75 million to 375 million people around the world may need to change occupational categories and acquire new skills by 2030.
Part of the challenge of retooling the workforce is finding organizations large enough to make the programs successful. At the end of the day, budgets for reskilling in organizations rose to $90.6 billion in 2017, which sounds high, but when compared to the $19.4 trillion GDP, it’s only 0.004%. That is not enough, especially when Deloitte reports that 84 percent of companies do not believe they have the talent pool to deliver on their digital strategy.
Taking Steps to Resolve The Labor Shortage
So who is going to solve this problem? The public sector? Or the private sector?
While the public sector has historically carried the burden of educating a nation’s people, the private sector is more agile, more technically savvy, and sees more immediate benefit from the retooling effort. And the benefits of retooling for the private sector are real -- companies that invest in workforce development are proven to attract more motivated, engaged talent, and actually improve bottom line results.
In reality, the best retooling programs often start with teamwork. And, across the world, there are a variety of organizations, associations, and government programs emerging to address the workforce skill gaps, by developing new ways for mid-career employees to gain the skills they need to make a change. Here are some leaders that are providing the courses and support required to retool the workforce.
Governments Around the World Invest in Retooling
Governments around the world have realized that promoting lifelong learning is proving to be a key component of prosperity, and many countries are testing new incentive programs to prepare the workforce for more technical roles.
According to a joint study by The Economist and ABB, Germany, Singapore and South Korea topped the “automation readiness” list through better labor and market policies; Japan became a leader as well through a world-leading innovation environment. Outside of the tech sector, Singapore has launched an experiment to provide citizens over 25 credits for finance education, in an effort to broaden the skills of its people.
California Offers Training for Jobs
Similar programs have launched in the US, one notable effort led by former California governor Jerry Brown, who identified 2.5 million “stranded workers” in his state. These stranded workers were defined as people who have moved through their career to a certain extent, but become blocked from further advancement because they never earned a college degree. His proposed solution was to pair online community colleges with organizations -- like private employers, industry associations and organized labor groups -- to provide the necessary training for the open jobs. This focused, tailored educational approach allows workers to quickly gain the skills they need, and avoids the bureaucracy and expense of a more traditional program.
Another example of partnerships between the private and public sector has occurred in fostering the growth of STEM. A great example of this effort can be seen in SoftBank Robotics, a leader in robotics and AI, who has donated 50 robots to Boston Public high schools in an effort to get students interested in STEM.
Tech Investments Drive Education For The Workforce
In addition to public and private sector partnerships, technology companies have emerged that are focused on solving the skills gap. Guild Education is a platform that partners with companies like Walmart, Lowes and Chipotle to provide education as an employee benefit; this company helps almost three million students achieve education with flexible scheduling at 80 universities. Students that attend these programs through work are much more engaged, and tend to stay committed, with a 98 percent retention rate.
The e-commerce giant Amazon prepays 95% of tuition for employees at fulfillment centers to take courses in in-demand fields. Their goal is to help employees become owners from day one, so they can build a successful career at Amazon. They offer onsite classes and have trained more than 10,000 employees so far.
AT&T is another mega-corporation that employees over 200,000 people, and they have partnered with Georgia Tech and Udacity to educate their workforce. AT&T university is an executive-led program that focuses on leadership and management development. So far they have educated over 100,000 managers.
Workers Take Training Into Their Own Hands
In addition to top down initiatives to educate the workforce, more and more people are taking education into their own hands, leveraging free or low-cost online education platforms like Udacity, Coursera and edX.
Learning to code mid-career is a challenge -- it’s like learning a foreign language. Fortunately, modern programs make learning much more intuitive. Blocky by Google and Swift by Apple are advanced programming languages with simple user interfaces that don’t require as much training to get started in a technical field. And SoftBank has developed programs that leverage robotics and coding frameworks to make coding more intuitive.
The Future is Automated -- And Bright
While we know automation is set to displace millions of jobs, it will also open up many opportunities and shift our world in unimaginable ways. If private and public sector continue to work together, and employees continue to be motivated to learn new skills, the workforce of the future could look very different, with more engaging, challenging work and higher wages for everyone.