How Businesses Can Address America's Reskilling Challenge

Posted by Penn Foster on February 20, 2019

Finding qualified workers is more challenging than ever. A low unemployment rate, the changing role of technology, and workers who are less willing to relocate all contribute to the problem. The challenge is so pervasive in such a wide range of industries across the country, that the Federal government has taken notice.

In July 2018, the Council of Economic Advisers released a report titled Addressing America's Reskilling Challenge. The report concluded that the Federal government has a unique role to play in addressing America's reskilling challenge. While that is certainly true, the role of individual businesses and the partners that support them, is no less vital.

The scope of the challenge

Great news for the U.S. economy brings with it some challenges for American business owners. In 2017, the unemployment rate fell to 4.1 percent, a record low that hadn't been seen since December of 2000. At the same time, the economy has added an average of 182,000 jobs per month.

"There simply are not enough unemployed workers in the current pool of those looking for work to match the growth in demand for new workers," the report stated.

To complicate matters further, industries are changing rapidly, demanding workers with more soft skills who are also more technologically savvy. The combination of these factors has drawn America's Reskilling Challenge to the forefront of both political thought and business consciousness. The only way to fill these jobs, it would seem, is to reskill workers to match demand.

Some may believe that the burden of reskilling should fall to the workers, after all, it is their livelihood on the line. However, many workers don't have the resources or the information necessary to successfully reskill themselves. Additionally, the report found that workers are less willing or perhaps less able to relocate for work than they have been in the past.

The report stated that workers without a college degree are most likely to be disrupted by the rise of automation and the overall technical nature of the modern workplace. These middle-skills workers may not have the funds that would enable them to put their job search on hold to pursue educational opportunities.

Also, because each employer uses a different vocabulary and way of thinking about the job, workers may struggle to identify which skills are needed. In a telling example outlined in the report, an engineering dean from Macomb Community College examined thousands of local job listings and found no less than a dozen different job titles demanding the same mix of skills.

When faced with this complexity, workers may not even know where to start reskilling themselves, even assuming they have the funds to do so. They look to government and business leaders for guidance.

What the government is doing

While the Federal government is aware of the skills gap, the true scope of the issue is difficult to measure. At this point, the government has no overarching system in place to quantify the gap on either a local or national level. Gathering more data is an important step in the process.

As the report indicates, the United States spends less on reskilling and reemployment than most of the developed world. Yet, the report recognizes that reskilling should be a part of the overall education and workforce development portfolio. Greater investment in middle skills workers and displaced workers should be coming soon if lawmakers heed the report.

Apprenticeships are one way the Federal Government is already helping businesses upskill workers. In June 2017, President Trump signed an executive order to expand access to apprenticeships and establish a Task Force on Apprenticeship Expansion. This effort adds momentum to the already building trend in favor of apprenticeships in the United States. Since 2013, the number of apprenticeships in the United States has grown 42%.

Other efforts proposed in the report include more flexible unemployment insurance benefits, federal funding for short-term retraining programs, and adjustments to existing Trade Adjustment Assistance programs. Finally, the report encouraged government decision makers to keep programs as flexible as possible to meet changing needs.

All of these initiatives take time. Businesses can't afford to simply sit back and wait for the government to meet the upskilling challenge. Instead, they should implement those solutions that are within their reach today.

What businesses can do

While businesses can't completely solve America's Reskilling Challenge on their own, there are some clear steps they can take to find and train the workers they need to thrive.

  • Hire for Qualities - Widen your definition of what a qualified worker looks like. Instead of seeking workers with specific degrees or qualifications, look for those with the skills necessary to do the job or for those ready and willing to learn new skills. Training workers can lead to workers who are more qualified and more committed to your organization.
  • Invest in worker training - The report found that by the time workers reach prime working age, employers spend roughly $1,300 per year on employee training. That's less than 10% of what private and public entities spend for education when a person is 18 years old. By investing in worker training and tuition assistance programs employers can support continuous learning and prevent the need for drastic reskilling as the industry changes. Strong retention strategies can help you keep the employees you train.
  • Communicate with others in your industry - No business can close the skills gap alone. By working with others in your industry you can raise the general human capital, creating more qualified workers for the entire industry.
  • Be open and transparent in job listings - As the report found, job listings are often confusing to workers. Each business has their own vocabulary to explain the combination of skills and experience necessary to do the job. Try to use terminology that is easily understood and focuses on skills rather than titles.

Implementing these changes can help not just your business, but your entire industry and the nation as a whole. Not only will you find the workers you need today, you'll also help prepare workers for the demands of tomorrow.

The reskilling challenge can only be met by the focused effort of many parties. If workers, the government, and business entities each take responsibility for what they can control, America can successfully reskill the workforce.

If your business is ready to meet the challenge head-on, Penn Foster is ready to help you. As an education partner, we provide training and upskilling solutions for new hires and long-term employees alike. Contact our training experts to find the targeted training solution that's right for your employees.