Gordon Report November 2018 and comment

THE GORDON REPORT

from Imperial Consulting Corporation

"Job Vacancies at Record High -- Business Response Feeble -- RETAINs Offer Solutions"

The U.S. talent crisis is real. We now lack the educated and skilled worker talent to sustain America's current and future economy. I recently traveled to Muskegon, Michigan to speak at a regional employment summit seeking solutions for this growing mismatch of jobs and skills. The Muskegon area was once a car-parts-manufacturing powerhouse. Currently as in many parts of the state, most of these jobs have disappeared, and those that remain are now in jeopardy. The non-profit Muskegon Think Tank invited me to give a series of briefings to their community on how to revitalize their local workforce. Currently between 15,000 and 20,000 skilled jobs in that region are unfilled due to the lack of qualified workers. Muskegon is not alone. 

Nationally the U.S. Department of Labor's JOLTS Report found that 7.1 million U.S. jobs remained unfilled in September 2018. The chief problem: employers demand higher general education and career skills. This trend will continue as a result of the Fourth Industrial Revolution. By 2022 the Labor Department predicts that 75 percent of U.S. jobs will require higher general education attainment, i.e., reading/math/writing skills at or about the 12th-grade level, plus successful completion of a post-secondary career education program (certificate, apprenticeship or degree).  Currently only about 33 percent of the American workforce meets these requirements. My published research in Future Jobs (2018) predicts that unless a much higher percent of Americans reach these educational standards, there will be between 14 and 22 million vacant jobs across the U.S. economy in 2022. This should be ringing alarm bells from coast-to-coast!

Although wages have risen 2.9 percent over the past year due to skilled worker shortages, businesses are just beginning to wake up to the urgency of the skills crisis. Moreover many business executives are finding that automation investments are not yielding desired productivity gains. Some are coming to the conclusion that retraining or upskilling current employees to effectively utilize and maintain these new technologies is a vital component in attaining productivity and profit goals. As the adoption of new technologies grows in American workplaces and baby-boomer retirements accelerate resulting in increased hiring needs, some American employers have been significantly increasing training and development expenditures. They rose from about $50 billion (2010) to $70 billion (2015) and reached $93.5 billion in 2017. However in 2018 this investment declined by over 6 percent  to $87.8 billion. Imperial believes that this vacillation will continue over a next decade. A recent Korn Ferry study estimates that by 2030 talent shortages will cost U.S. firms nearly $8.5 trillion in lost revenue!

Other major economic developments are influencing this inadequate response to employee training. In 2018 many of America' s largest companies were the beneficiaries of a tax break for repatriating earnings from abroad. The main selling point for this tax change was that it would boost long-term corporate investments within the United States. Instead, it has mainly resulted in record levels of stock buybacks that boost share prices. Five large tech companies - Apple, Alphabet, Cisco, Microsoft and Oracle - thus far have expended $115 billion in stock buybacks, nearly doubling what they spent in 2017. This is occurring at a time when there are acute shortages of tech workers as computer technology proliferates in all types of workplaces. Tech talent availability was prominently mentioned in Amazon's announcements of its site selections for a second headquarters. According to Microsoft estimates, 1.4 million IT jobs will be open across the United States in 2020, but projected college graduates in computer science will make up only one-third of that number.

Employer job training is only a part of the solution to the jobs-skills gap. The U.S. education system is not producing enough graduates with the credentials sought by American employers. Although 68 percent of high school seniors enroll in post-secondary programs, after six years only about 33 percent complete a certificate, apprenticeship, or degree program. Students who are required to take remedial courses (usually in math, reading or writing) drop out at far higher rates reflecting the difficulty of making up for past deficiencies in attainment. Clearly American education is out of step with current societal and economic needs. I agree with David Brooks who recently wrote, "We build a broken system and then ask people to try to fit into the system instead of tailoring a system around people's actual needs."

Building a new system requires re-establishing effective communications among key segments of American society that then results in the building of cross-sector partnerships. That is why Regional Talent Innovation Networks (RETAINs) are continuing to expand across the United States. They link together diverse community sectors to forge new regional talent-delivery systems. A regional focus facilitates local visionary leadership that fosters cooperation on many levels. For instance, to motivate students and inform them and their parents on the high levels of skills required in today's workplaces, local employers can participate in career information programs starting in elementary school that demonstrate how their workplaces are organized, what their employees do, and the education and skills requirements for these positions. RETAINs can also promote a wide variety of cross-sector partnerships for secondary and post-secondary programs that broaden course offerings and provide many career education options including internships, career academies, apprenticeships, and certificate programs. 

As we have already stated, a Fourth Industrial Revolution is now underway. Unless more community leaders join together in forming RETAINs that develop the talent needed for today and tomorrow, this time the revolution may bypass the United States.

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

Imperial Consulting Corporation

220 E Walton Place

Chicago, IL 60611

Jim's Comment: The business community needs to step up and become a fully engaged partner with workforce development, economic development, and education & training providers to create a pipeline for their future workers. It will take the re-introduction of apprenticeships and businesses gifting the school systems with the current technology and equipment and maybe even share an employee/trainer to ensure the skills are relevant to the needs of that business. 

Gordon Report July 2018

Ed has been a good friend for many years. Here is his latest report.

GORDON REPORT

Special 50th Anniversary Edition

from Imperial Consulting Corporation

From 1968 to 2018 Imperial has provided an evolving combination of human development services. Over the course of 50 years, our business began with educational services (1968), moved into the business training and development marketplace (1979), and finally grew into a distinctive consulting practice in talent development (1989).

Here are a few notable highlights:

• Over 30,000 people received education and training services
• North Central Association accreditation of our educational programs in 1982
• Over 300 businesses, government agencies, educational institutions, and non-profit organizations across the United States and in other nations have been Imperial clients
• Research findings included in 21 books and over 150 articles
• Over 2,000 presentations given at conferences sponsored by international, national, state, and local organizations

An outstanding term of employees and consultants are responsible for this impressive record of accomplishments. Their superlative contributions remain at the heart and soul of Imperial's outstanding talent network.

Very early in Imperial's development, we adopted Cicero's words of wisdom, "He/she who does not progress falls behind," as our business motto. Imperial's leadership has always championed the importance of flexibility and openness to change.This is more important today than in 1968. As the world continues to transition at an ever-increasing pace, lifelong learning is a necessity for everyone, no matter what their organizational rank, status, or level of education.

In its "Knowledge Shock Series" prior Gordon Reports have explored the failure of key elements of U.S. society to keep pace with the knowledge and skills demands of technological change. By 2022, nearly 75 percent of American jobs will require post-secondary education and specific skills training. But unless our educational and training systems are significantly upgraded and expanded, only about 25 percent of Americans will be able to meet these standards.

Imperial started with one-on-one educational programs. As it expanded into training and development, its research increasingly demonstrated that educational progress is cumulative -- starting in the home, and then continuing in K-12 education, post-secondary programs, and in the workplace. A weakness in one link of the educational chain can make remedial programs necessary at the next stage causing extra expense and time and sometimes failure to attain the goal. For instance, at least 25 percent of beginning college students starting college immediately after high school must take remedial courses. The odds that such students will fail to complete a post-secondary degree or certificate are dramatically increased. Overall according to the report of the National Student Clearinghouse on 2017 outcomes, only 56.9 percent of U.S. student seeking post-secondary certificates or degrees completed them within a six-year period.

Today Imperial Consulting focuses on ways to improve educational programs and to better coordinate education-to-employment systems. To achieve these objectives, Imperial is promoting the development of RETAINs, regional cross-sector partnerships that act as catalysts for creating significantly updated talent pipelines.

RETAINs help communities continuously adjust education/training to address a highly changeable 21st-century labor economy. In the short-term, they facilitate the alignment of job training programs with local employers' job requirements. In the long-term, they coordinate career information programs starting in elementary schools, develop high-school career academies, and support post-secondary certificate, apprenticeship, and degree programs.

LOOKING TO THE FUTURE

Today is a watershed era similar to the Industrial Revolution of the late 19th and early 20th centuries. Then new methods of production required more educated workers. The factory system and the consequent growth of American cities sparked the development of public schooling at the local levels, that in turn led to the passing of compulsory schooling laws at the state level. The United States was the first nation in the world to institute compulsory tax-supported public education, and it was a key component in the economic and industrial expansion of the United States. It was history's first comprehensive education-to employment system.

The spread of computer technology in today's workplaces is again raising the demand for a more educated workforce. While there are some pockets of progress, too many Americans are not receiving the education needed for 21st-century jobs and careers. Our education-to-employment system clearly needs re-invention, but entrenched bureaucracies in business, education, and government stand in the way. Too many components of American society are caught in the blame game, instead of working together to find solutions.

There were deep divisions in American society one hundred years ago. Just as today, immigration and  economic inequality stoked tensions. Yet as community after community discovered that the pain of defending the status quo was greater than that of systemic change, solutions were forged. I believe that we are at this point again. The United States was founded and still stands because of our belief in a better future for all. Americans have overcome formidable obstacles in the past. We can do it again!

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.

April Gordon Report

APRIL GORDON REPORT

from Imperial Consulting Corporation

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 make 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. 

February Gordon Report

FEBRUARY GORDON REPORT

from Imperial Consulting Corporation

Knowledge Shock Part IV: Cyber-Technology and Popular Culture

Information sharing has exploded across the globe. Social media sites offer 24-7 access to news and views in a wide variety of formats. Facebook, LinkedIn, Twitter, YouTube, Pinterest, Instagram and Snapchat are but a few of the available networks. We have entered an exciting new age for the exchange of ideas and opinions. Yet extensive reliance on such sources can have disquieting consequences.

We recently received a request for training from a major financial planning firm that now needs to supply counseling to the increasing number of baby boomers on retirement pay-out options. This firm was recruiting finance-major graduates from prominent universities in the eastern United States to provide this counseling. What they discovered was troubling. These millennial hires were well versed in financial theories and formulas and were adept at using instant messaging, texting, and social media. They, however, did not consider talking to a client on the phone or having a face-to-face counseling session to be important communication options. As they seldom did this in their own lives, they lacked facility in engaging others in conversation. This financial planning firm was seeking assistance in establishing a training program that would provide these new hires with practice in conversing and directly negotiating with clients. A college degree does not guarantee essential job or learning skills.

This is not an isolated example. Recent surveys indicate that businesses find millennials deficient in a number of important skill areas and fault their work ethic. In addition to lacking interpersonal skills, many don't write very well, have short attention spans, can't read rapidly and comprehend longer written texts, or readily do the math required for a jobs. Why are so many young Americans poorly prepared for the 21st-century labor market?

While computer technology has led to tremendous advances in science, medicine, and technology, the increasing dominance of many online sites and applications in people's lives and in popular culture are decidedly disturbing.

Many of my friends has recounted with dismay watching a group of teens or young adults flopped on couches silently messaging each other on their cell phones. They also spend long stretches of time on Facebook, Instagram, Twitter, or other social media sites, tuning out the real world around them. Apple's latest data show users compulsively checking their phones about 80 times a day. A 2015 Common Sense Media study found that 50 percent of teenagers spend 4 hours a day on various types of media and one quarter spend more than 8 hours. In a 2016 survey by this group, half the teenagers reported feeling they were addicted to mobile devices. Such addiction is not confined only to this age group. Studies have linked extensive smartphone or internet usage to a variety of personal issues: decreased concentration spans, reduced problem-solving abilities, depression, and even an increase in teenage suicide rates.

Why should a child, teen, or adult value learning-how-to-learn when the internet provides instant answers? A study found that when people know a piece of information is available on the internet, they may lose their ability to recall it. Creativity requires calling up information from memory and combining it with new facts or ideas to construct inventive solutions. Learning is not simply a matter of finding a fact on Google. The effortlessness of finding information on the internet may make acquiring knowledge seem easy, when in fact it requires the same persistence and effort as mastering a musical instrument or becoming proficient at a sport.

Critical components of our human nature: intuition, creativity, social skills, innovation, improvisation etc., can be diminished, erased, or never developed by the overuse of cyber-technology. American popular culture is eroding the desire to learn. This is a real crisis.

Another significant problem is the role of internet in spreading misinformation. There are no editors checking facts on the internet. Anyone can post spurious data or news on it. Too many Americans are unaware of the importance on checking the authoritativeness of internet sites. Many in fact are spreading misinformation through social networks. The use of stolen or false identities on such sites is further compounding this problem.

Various malign aspects of cyber-technologies are eliciting increasing calls for reform. Advertisers are threatening to cancel their accounts and there is growing pressure for government regulation of social media sites due to malicious and offensive content. Concerns about the effects of internet use on learning and cognitive development as well as addiction to video gaming and ready access to pornography are prompting crusades for increased parental oversight of children's online activities. Wait Until 8th is a movement to help parents counter peer pressure to give their children smartphones before they reach 13 or 14 years of age. The Truth About Tech is an initiative begun by former employees of Facebook and Google that seeks to pressure these companies to make their sites less addictive to children. But in the end isn't it up to each of us to assess whether the time and attention we give to smartphone use and social media is reaching the level of addiction?

Edward E. Gordon is the president and founder of Imperial Consulting Corporation (www.imperialcorp.com). A revised paperback edition of his book, Future Jobs: Solving the Employment and Skills Crisis, will be published by ABC-CLIO in March.