Education and Workforce


Time to Align

America's Skills Gap and How to Overcome it

As the labor force nears full employment, the U.S. economy faces a tough obstacle—businesses can’t find enough qualified workers to meet rising job openings.


While workers are in demand, the right skills are in short supply, creating a “skills gap.” We can bridge this gap by better aligning the educational pathways available to workers to the types of skills needed by businesses. BRT member companies are at the forefront of these efforts by establishing partnerships with education providers and trainers, creating more opportunities for on-the-job training, and partnering in regional training programs to increase the pool of qualified job applicants.

America is hiring.

Recession Recovery

Ten years after the Great Recession, the labor market has returned to is pre-recession levels. Unemployment, a common measure for the health of the overall economy, is the lowest it has been in over a decade.

During the 2007–09 recession, the unemployment rate more than doubled, peaking at 10.0 percent (15 million people) (1). By December 2017, the unemployment rate dropped to 4.1 percent, the lowest it had been since December 2000. As of August 2018, the unemployment rate has dropped even lower to 3.9 percent. There were over 6 million job openings as of the second quarter of 2018 (2).

Increase in Technical Jobs

Technological innovation has created fast-growing occupations and job openings, 90 percent of which require postsecondary education and training.

By 2026, the U.S. Bureau of Labor Statistics expects a 13.7 percent increase in computer and mathematical jobs, further increasing jobs openings (3).

Generational Changes

Baby Boomers, once America’s largest generation, are aging and nearing retirement, while labor force participation among young Americans is projected to decline

The labor force participation rate has steadily decreased over the past two decades, from 66.8 percent in 1996 to 62.8 percent in 2016, and projected to fall to 61 percent by 2026.

Generational Changes

Not only are retirees freeing up job positions, the population of next generation workers is not large enough to fill those openings.

The working-age population is growing at half the rate of the last century (4).

Workforce
Jobs*

3 million
unfilled jobs

+ Technical Jobs

+ Additional Jobs

- Retiring Workers

But businesses can’t fill these positions.

Skills Gap

Despite this good news for job seekers, businesses are struggling to find candidates who have the necessary skills to succeed in available roles.

Almost 40 percent of American employers say they cannot find people with the skills they need, even for entry-level jobs (5).

Skills Gap

According to a Business Roundtable survey of its members, more than 95 percent of CEOs indicated that their companies suffer from skills shortages. Job candidates simply do not have the fundamental competencies to fill these open jobs.

Nationwide, almost 60 percent complain of lack of preparation, even for entry-level jobs (6).

Workforce
Jobs*

3 million
unfilled jobs

+ Technical Jobs

+ Additional Jobs

- Retiring Workers

Because of an unprepared workforce.

Middle Class Jobs Require Higher Education Levels and Technical Skills

Many high-wage jobs in the United States require extensive technical training, which candidates lack because of systematic shortcomings that can be abridged through investment, innovation, and outreach.

The number of workers with a college degree has risen by roughly 12 million since the recession, while the number with a high-school degree or less has fallen by more than 4 million (7).

Decline of Federal Investments in Workforce Training

The private sector has increased training and now spends more than $164 billion each year on training, but it’s not enough to ensure that employers have a qualified pool of candidates from which to choose. Public funding has decreased and, for employers who had to make tough decisions during the Great Recession, many training programs have not returned.

Over the last four decades, Congress decreased funding for job training programs from $24 billion to $5 billion (8).

“Apprenticeship in manufacturing and any technical field costs [employers] anywhere from $60,000 to $260,000 [per apprentice] (9).

Expense of Education for the Individual

When incurred by individual workers, the cost of specialized training is often prohibitively high. College or vocational training can be expensive as well as time intensive.

With states spending less on higher education and tuition costs for college and training programs increasing, public higher education education has never been more expensive (10).

K-12 Schooling is Leaving Many Students Unprepared for College and the Workforce

21st century skills require the ability to analyze complex texts, learn new technologies and solve problems. These skills are first taught in elementary school. But, today’s students continually perform at or below average compared to other industrialized countries in reading, math, and science (11).

With states spending less on higher education and tuition costs for college and training programs increasing, public higher education education has never been more expensive (12).

Workforce
Jobs*

3 million
unfilled jobs

+ Technical Jobs

+ Additional Jobs

- Retiring Workers

Private, public, and cross-sector initiatives can help close the gap between workers and employers through developing in-demand skills and qualifications.

Fix K-12

States should require school districts to implement rigorous curricula that prepares students to be successful in postsecondary education and the workforce. Developing more effective teachers and expanding access to high quality early learning are critical to preparing the next generation for the workforce.

At its peak, 45 states and the District of Columbia opted in to the Common Core standards.

While some states have since revised their laws, most have maintained higher academic standards in critical proficiencies like reading and math (13).

Innovative Training Opportunities

Employer-sponsored workforce training, apprenticeship and other work and learn programs, and mentoring can help ensure workers have the skills that employers need.

BRT members spend over $4.5 billion per year in employee learning and development, a number that is expected to increase in the future, and 96 percent of responding companies had internship programs and 50 percent of responding companies had apprenticeship programs (14).

Higher Education Partnerships with Business

Businesses are expanding partnerships with career technical education, community colleges, and universities to create programs that build the skills needed for 21st century jobs.

By partnering with 4-year colleges and universities to recruit and develop curricular enhancements to prepare students for the workforce, businesses are less likely to see skills shortages as problematic or very problematic (15).

Workforce
Jobs*

3 million
unfilled jobs

+ Technical Jobs

+ Additional Jobs

- Retiring Workers

CEOs are at the forefront of creating solutions to address the skills gap.


Many have already developed and implemented proven programs that create a pipeline of skilled American workers. Partnerships among business, educators and training providers can scale these initiatives and reach prospective candidates, including adult workers. These efforts are key to building a sustainable economy.

Learn more about our commitment to ensuring all students and workers are prepared to work and ready to succeed.

Citations


  1. Evan Cunningham. Great Recession, great recovery? Trends from the Current Population Survey : Monthly Labor Review: U.S. Bureau of Labor Statistics, 2018 https://www.bls.gov/opub/mlr/2018/article/great-recession-great-recovery.html
  2. Bureau of Labor Statistics, The Employment Situation - July 2018, https://www.bls.gov/news.release/pdf/empsit.pdf
  3. Bureau of Labor Statistics, Occupational Statistics - July 2018, https://www.bls.gov/emp/tables/emp-by-major-occupational-group.htm
  4. Business Roundtable, Work in Progress, June 2017, https://www.businessroundtable.org/sites/default/files/immigration_reports/BRT%20Skills%20Gap%202017%2011012017.pdf
  5. Martha Laboissiere and Mona Mourshed, Closing the skills gap: Creating workforce-development programs that work for everyone, MicKinsey & Company, February 2017, https://www.mckinsey.com/industries/social-sector/our-insights/closing-the-skills-gap-creating-workforce-development-programs-that-work-for-everyone
  6. Martha Laboissiere and Mona Mourshed, Closing the skills gap: Creating workforce-development programs that work for everyone, MicKinsey & Company, February 2017, https://www.mckinsey.com/industries/social-sector/our-insights/closing-the-skills-gap-creating-workforce-development-programs-that-work-for-everyone
  7. Bureau of Labor Statistics, Employment Statistics - July 2018, https://www.bls.gov/emp/tables/emp-by-major-occupational-group.htm
  8. Anna Cielinski, Federal Investment in Employement and Job Training Services Has Declined Over the Last 40 Years, CLASP, December 2017 https://www.clasp.org/sites/default/files/publications/2017/12/12.15.17%20Federal%20Investment%20in%20Employment%20and%20Job%20Training.pdf
  9. Lolade Fadulu, Why the U.S. Fails at Worker Training, The Atlantic, November 15, 2017 https://www.theatlantic.com/education/archive/2017/11/why-the-us-fails-at-worker-training/545999/. Anthony P. Carnevale, Nicole Smith, Jeff Strohl, Help Wanted: Projections of Jobs and Education Requirements Through 2018, Georgetown University Center on Education and the Workfoce, June 2010,
  10. https://1gyhoq479ufd3yna29x7ubjn-wpengine.netdna-ssl.com/wp-content/uploads/2014/12/fullreport.pdf
  11. Sophie Quinton, The High cost of Higher Education, Pew Trusts,January, 25, 2016 http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2016/01/25/the-high-cost-of-higher-education
  12. OECD (2018), Reading performance (PISA) (indicator). doi: 10.1787/79913c69-en
  13. Michael Leachman, Kathleen Masterson, Eric Figueroa, A Punishing Decade for School Funding, Center on Budget and Policy Priorities, November 29, 2017 https://www.cbpp.org/research/state-budget-and-tax/a-punishing-decade-for-school-funding. Business Roundtable, Taking Action on Education & Workforce Preparedness, October 7, 2013, https://www.businessroundtable.org/resources/taking-action-on-education-workforce-preparedness
  14. Thomas J. Donohue & John Engler. Common Core Brings Benefits to Both Education & Our Economy [op-ed]. Business Roundtable. August 12, 2013, https://www.businessroundtable.org/media/news-releases/common-core-brings-benefits-to-both-education-our-economy.
  15. Business Roundtable, 2016 BRT Education and Workforce Survey: Results and Analysis, June 2017, https://www.businessroundtable.org/sites/default/files/BRT_Education_and_Workforce_Survey_June_7_2017.pdf.
  16. Business Roundtable,“Education & Workforce Committee,” n.d., Accessed August 15, 2018 https://www.businessroundtable.org/issues/education-workforce/committee

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