GORDON REPORT July 31, 2013
"From Washington to South Dakota: The Search to
Close the Skills-Jobs Gap"
The Third Way, a Washington D.C. think-tank, recently
invited me to be a panelist for a White House policy forum on the future of
workforce development. This event featured a public address by Vice President
Joe Biden on the skills needed for American workforce competitiveness.
Subsequently Secretary of Labor Thomas Perez led a discussion session on
discovering innovative regional programs that prepare more workers for
higher-skilled employment. Information on the Third Way event and report,
"The 7 Habits of Highly Effective Workforce Programs," can be found
at www.thirdway.org/events/146.
The discussion session's basic premise was that the U.S. and
other nations are not producing enough workers with the skills needed for
employment in today's high-tech global economy. What has finally caught
Washington's attention is that the unemployment rate is falling for the wrong
reason. While some workers have found new jobs, many others have given up
looking, shrinking the U.S. labor participation rate to a 35-year low.
The scope of the skills-jobs mismatch is well illustrated by
what I learned recently when I spoke at Watertown and Brookings, South Dakota,
at two of the six "Governor's Workforce Summits" being held across
the state. South Dakota has a very low unemployment rate (3.8% in June) with
about 17,000 people unemployed while there are slightly more than 13,000 jobs
vacant throughout the state. With a population of about one million
people, skills deficits are beginning to create growth problems for many
business sectors. To address the skills-jobs disconnect, the state has launched
South Dakota Workforce Initiatives or SDWINS, a multifaceted skills-development
program. In addition to encouraging the return of people who have left the
state, this initiative includes: offering companies state partnership programs
for training new and existing employees and expanding apprenticeship education
and technical training programs at local educational institutions.
South Dakota also has begun career information and education
programs to better prepare youth for emerging career opportunities. Through its
on-line platform, www.sdmylife.com,
students see how their interests and skills match real-life careers, learn
about post-secondary education and training options for specific careers, and
can locate internship positions in South Dakota businesses and organizations.
The Federal Reserve's "Beige Book" economic survey
of May 2014, "The Accenture 2014 Manufacturing Skills and Training
Study," the National Federation of Independent Business July economic
survey, and the Conference Board's Help wanted June Online Data Series are
among the many employment indicators confirming that a nationwide talent crisis
is in full bloom. News services are raising red flags with headlines such
as: "'Terrifying' Oil Skills Shortage Delays Project," and
"Global Giants Face a Fight to Lure Local Talent," (Financial
Times, July 17, 2014). They are also beginning to ask uncomfortable
questions, for example: "Just Whose Job Is It to Train Workers?" (Wall
Street Journal, July 17, 2014).
It's time for American society to face up to the radical
shift in the skills demanded in today's high-tech global economy. As Vice
President Biden stated at the recent White House workforce forum, "People
need to know what they need to know!" That translates into understanding
that life in the 21st century requires our culture to focus on people acquiring
more knowledge and skills over their entire lifetime, not only as students in
school, but in lifelong learning. Employers need to inform educational
institutions about the knowledge and skills required for in-demand jobs and
careers and cooperate in developing educational programs for these jobs. Parent
and students need information on career opportunities in their region and the
education and training needed to prepare for them.
In Seattle, companies such as Amazon and Boeing, have either
started or expanded job training programs. They have reached the conclusion
that there is no longer a sizable amount of slack in the worldwide STEM
workforce. Some of these companies have also brought 3,000 top-level STEM
students to Seattle for summer internships in which transportation, lodging at
corporate housing or hotels, and often food expenses are covered.
Many more employers, however, across the United States need
to increase the training and development expenditures that they so drastically
cut during the recession. Surveys show that employee loyalty is significantly
increased when employees are provided with opportunities to acquire the latest
skills relevant to their careers and their industry.
While in Watertown and Brookings, SD, I saw how difficulties
in recruiting skilled labor were affecting their economies. Both have low
unemployment rates, and vacant positions are rising. The re-shoring of jobs to
the U.S. from overseas offers these communities new opportunities to diversify
their economies, but the local availability of skilled technical/professional
workers is a major factor in attracting new employers to an area. My activities
in these communities enabled the business, education, and government leaders to
gain a clear understanding of how Regional Talent Innovation Networks
(RETAINS), which are profiled in prior Gordon Reports and are a major focus on
my latest book, Future Jobs: Solving the Employment and Skills Crisis,
can help their local communities focus on the cultural change process needed
for rebuilding the regional talent-delivery system.
"The skills gap is not a fabricated dilemma, it is very
real," asserts Bill Path, president of the Oklahoma Institute of
Technology. "And it is only going to get worse if we do not take it
seriously and address it. . . .Like two mighty oars working as one, the public
sector and the private sector must pull together to affect real change and to
put our U.S. labor force back on a proper course for job success."
Edward E. Gordon is president of Imperial Consulting
Corporation. For information on its range of strategic workforce development
services, please visit www.imperialcorp.com
or call him at 312.664.5196.
