View the Middle-Skills Gap Through a Competitiveness Lens

It’s not every day that one finds Harvard Business School (HBS) advocating for community and technical colleges. Adding its own voice to an increasingly loud refrain on the country’s “middle-skills” gap, HBS’s recent report co-authored with Accenture and Burning Glass, addresses this problem from a unique perspective—that of U.S. competitiveness.
Bridge the Gap: Rebuilding America’s Middle Skills is grounded in the premise that not all middle-skills jobs are created equal and concludes with some strong recommendations for employers, community colleges and policymakers. (For those not familiar with the term, middle-skills positions are those that require more than a high school diploma, but less than a bachelor’s degree—often an associate degree or a certificate). Specifically, it exhorts these stakeholders to focus on middle-skills jobs that: 1) create high value for U.S. businesses; 2) provide a fair wage at the outset as well as increasing lifetime career value for workers with appropriate education and experience; and 3) address chronically hard-to-fill positions. Ultimately, closing the middle-skills gap will require that employers radically shift their roles in developing a talent pipeline, the authors argue.

Reversing unsustainable trends

Several factors differentiate the report from its predecessors on the middle-skills gap, but chief among them is the competitiveness lens, which examines supply and demand of jobs and highlights growing trends that undermine the country’s long-run economic well-being.

The Bridge the Gap report draws from a range of labor market statistics and key economic indicators in addition to employer surveys and existing studies. Among these statistics are the sustainably growing underemployment rates of experienced workers (very often the baby boomer generation) and new jobs market entrants (recent and not-so-recent college graduates). Among reasons for the report’s call to action: the part-time employment rate of 23% as of August 2014, including workers who would prefer to be employed full-time. As the authors point out, the degree and magnitude of unemployment and underemployment appear paradoxical as employers simultaneously lament being unable to fill open positions.

There are two other trends highlighted in the report that also merit discussion: deskilling and upskilling. Deskilling occurs when highly educated workers take on positions for which they are overqualified. As the economy continues to recover from the recession and more jobs become available, the rate of highly skilled workers returning to highly skilled jobs has not kept pace. Conversely, we continue see the upskilling phenomenon increasing. This occurs when employers increase the minimum educational requirements for jobs to a bachelor’s degree to attract workers with the necessary soft skills, though the competencies and other requirements of the job are at the middle-skills level. More often than not, the wages of upskilled jobs remain at middle-skills levels or are marginally greater. Neither upskilling nor deskilling is in the long-term economic interest of the country or local and regional economies.

Think supply chain

Among the key recommendations of the Accenture, Burning Glass and HBS report are that employers apply supply-chain management principles and continuous-improvement strategies to sourcing, investing and ensuring a robust pipeline of middle-skills talent. Despite employers’ preference to hire Americans, the report finds that when faced with persistently hard-to-fill positions, employers turn to labor-replacing technology, they move operations elsewhere (within and outside the country) or turn to foreign vendors. Taking a supply-chain perspective, the report recommends that employers forecast, plan and manage their talent inventory rather than turning to these alternatives or upskilling. Just as companies have processes to source and procure a range of inputs, they should also cultivate relationships with local community and technical colleges to attract and nurture middle-skills talent from outside—and already inside—their companies.

Other recommendations for businesses include communicating core competencies and specific job requirements, as well as emphasizing core skills to community college and other education partners to help prevent unnecessary upskilling of jobs. The report’s recommendations for community colleges include: assisting employers halfway in developing the supply-chain approach and partnership; ensuring that the curriculum for academic programs includes soft skills; and aligning resources to empower students entering the job market with current skills.

The report also calls on policymakers to: “identify and propagate” social entrepreneurship models within and outside the education sector; facilitate and incentivize relationships between employers and educators; make job creation a focus; and disseminate data on job markets and emerging trends. Lastly, the report recommends that policymakers remove barriers for employers and educational partners to engage in novel and innovative responses to the skills problem.

Implications for New England higher ed

While some of the recommendations of the recent report are not earth-shattering, they do hold value in the strategic approach they recommend that higher education and policymakers take in working with businesses. A few weeks ago, the Massachusetts Department of Higher Education held its Vision Project conference where it unveiled its Degrees of Urgency report, highlighting a projected decline in the number of high school graduates. Couple this with the projections that the population entering the labor force in New England is expected to be 15% smaller than the share of retiring workers by 2020, and it’s clear we need a much more strategic response.

The Accenture, Burning Glass and HBS report provides a framework for segmenting and prioritizing focus on middle-skills job with a high value to businesses and with high career lifetime value and ladders of advancement for workers. Adjusting for regional variation, the report suggests for the New England area a focus on fields such as management, computer and mathematical occupations, technical sales and sales management, healthcare, financial services, among other sectors that are key to our regional economy. As the New England higher education sector experiences and anticipates leadership changes, there are foundations upon which for us to build to ensure a strong regional economy by providing family-sustaining career pathways for middle- and highly skilled workers through quality, affordable education.

Yves Salomon-Fernandez is vice president for strategic planning, institutional effectiveness and grants development at MassBay Community College and executive officer of MassBay’s Framingham Campus.

 

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