Addressing the Urgent Labor Shortage: Proactive Measures for Employers and Communities
The urgent need for proactive measures to address the pressing labor shortage challenges faced by employers, states, and communities alike must be recognized. According to recent data from the Department of Labor, the current workforce participation rate has declined by approximately 3 million people compared to 2020[1]. This trend has led to a significant talent gap, as evidenced by the fact that there are currently 10 million job openings and just under 6 million job seekers.[2],[3]
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This dynamic has created a situation where low unemployment rates and a talent crisis can coexist, exacerbating the challenges faced by employers in their search for qualified workers. ?In response, forward-thinking organizations are already taking steps to become more competitive.
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Stakeholders should recognize this situation's gravity and take bold action to address it. Failure to do so risks long-term damage to the health and prosperity of our economy and society.
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Per the Department of Education, by 2027, 70% of jobs will require education or training beyond high school.[4]?What that training and education look like is the real question. Employers can address employee retention and hiring in several ways to combat the tight labor market.
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First, employers need to reevaluate their job role requirements. "Degree requirements have locked out jobseekers with alternative qualifications from 7.4 million jobs", says Bridgette Gray, chief customer officer for Opportunity@Work.[5]?Some employers are revolutionizing the way they evaluate job requirements. Rather than setting college degree requirements, employers seeking to compete for talent will prioritize skills and experience, ultimately redefining the qualifications necessary for a job. While specific positions require a college degree, such as those required by law or regulation, many professional jobs have historically been filled with college graduates due to employer preference rather than a legal obligation. Fifty three percent of jobs require more than high school education and less than a four year degree, but only 43 percent of workers are trained at that level.[6] To further illustrate this point, Burning Glass Technologies found that 40% of jobs created within the past decade are considered "middle-skill" occupations, where postsecondary education is required, but a four-year degree is unnecessary[7].?This trend appears to realign the labor market in contrast with employer behavior a decade ago. A 2014 study conducted by Burning Glass, found that employers were increasingly seeking candidates with a bachelor's degree for jobs that historically did not require one. Surprisingly, the study also found that the skill requirements for jobs that require a college degree were not significantly different from those that did not. Instead, per the data, employers were using a bachelor's degree as a broad recruitment filter that may or may not correspond to the specific capabilities needed for the job. In some industries, such as IT, specific roles and functions identified in one or two-year degree programs prepared workers better than a bachelor's degree, but employers presumed that someone with a college degree was more capable. To avoid excluding a large population that may not have a college degree, employers must update their existing job roles, redefine the necessary skills, certifications, and experience to do a job, and stop relying on historical requirements that have contributed to tightening the labor market.
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Furthermore, employers must collaborate with community colleges and universities to effectively communicate the relevant skills and credentials needed for various job roles, ultimately bridging any gaps in qualifications. Community colleges are well-equipped to immediately address skill deficiencies and establish employer and industry-driven credentialing programs. The 2014 Burning Glass study also highlighted that certain job roles have structured credentialing requirements outside of traditional higher education degrees, such as state licensing requirements and industry-wide accepted certifications. These job roles, such as those in healthcare, have not experienced upcredentialing as they remain focused on skills. It is up to employers to take the lead in addressing these issues by recognizing the value of these alternative credentialing pathways and continuing to develop this model alongside colleges through collaborative industry partnerships.
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Employers prioritizing employee retention and company growth must invest in their workforce's skills and career advancement. Therefore, a third recommendation for employers is to offer tuition reimbursement programs and actively encourage their employees to pursue professional development opportunities to enhance their skills and further their career journeys.
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The current labor shortage is a pressing challenge that must be addressed proactively. The data from the Department of Labor speaks for itself: a talent gap that is only widening, with millions of job openings but not enough job seekers to fill them. The situation calls for bold action, particularly from forward-thinking organizations that recognize the situation's urgency. Failure to act risks long-term damage to our economy and society. As we look to the future, education, and training will play an increasingly crucial role in the workforce. Employers must adapt by reevaluating job role requirements, collaborating with educational institutions, and investing in their workforce's skills and career growth. By taking these steps, we can address the current labor shortage and build a stronger, more resilient workforce for the future.
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[1] NGA. (2023, February 28). Workforce Shortages and Opportunities. National Governors Association. https://www.nga.org/news/commentary/workforce-shortages-and-opportunities-2023-nga-winter-meeting/
[2] U.S. Bureau of Labor Statistics. (2023, April 4). Job Openings and Labor Turnover Summary [Press release]. Retrieved from https://www.bls.gov/news.release/jolts.nr0.htm
[3] U.S. Bureau of Labor Statistics. (2023, April 7). Employment Situation Summary. Retrieved from https://www.bls.gov/news.release/empsit.nr0.htm
[4] Office of Career, Technical, and Adult Education, U.S. Department of Education. (n.d.). About Unlocking Career Success. Retrieved from https://cte.ed.gov/unlocking-career-success/about.html
[5] "Degree requirements have locked out job-seekers with alternative qualifications from 7.4 million jobs," according to Gray (as cited in Opportunity@Work, n.d.).
[6] National Skills Coalition. (2020). Career pathways for a competitive advantage: A state policy framework for adult workforce development. Retrieved from https://nationalskillscoalition.org/wp-content/uploads/2020/12/CIAW-Invest-in-AW.pdf
[7] BenefitsPRO. (2023, April 1). Career pathways: A solution for employers and workers alike.