Closing the Skills Gap

Introduction

Employers are having a hard time finding suitably skilled workers, according to a survey conducted by Learning House in collaboration with Future Workplace. In the spring of 2018, 600 human resource leaders were asked about the state of their hiring process and any difficulties identifying qualified candidates. The survey found that half (52 percent) of employers do feel there is a skills gap and 47 percent blame higher education. Job openings in the U.S. continue to rise and 70 percent of employers note that up to 500 jobs at their company went unfilled over the past year.

To address this skills gap, Learning House proposes a stronger connection between employers and educational institutions. Although employers note considering outsourcing training and hiring non-traditional candidates without four-year degrees, we feel these options are short-term. The best long-term solution is increased collaboration between the subject matter experts in education and employers.

This study identifies and benchmarks the current skills gap experienced by U.S. employers as well as their frustrations with finding qualified candidates. We look to bridge this gap by starting dialogue between employers and schools. We feel this collaboration is essential to closing the gap and for continued strengthening of our national economy.

Section One: College isn’t preparing students for the working world

Employers point to colleges and universities for not preparing the future workforce for open positions that they have in their business, thus creating a skills gap nationwide. Nearly half (47 percent) of employers surveyed say they do not feel that colleges are preparing students for the working world; this is troublesome since 35 percent of employers feel it is the responsibility of the colleges for making employees “work-ready.”

Do you feel that colleges are preparing students for the working world?[All Employers]

The skills gap, in the eyes of employers, will not be closing anytime soon with nearly one-third (29 percent) of employers saying they do not have a pipeline of talent coming from colleges and universities with the right skills to fill their current and future roles. An additional 22 percent are unsure about their talent pipeline.

Do the schools/colleges where you recruit have a pipeline of talent with the right skills to fill your current and future roles?[All Employers]

Despite pointing the finger at colleges and universities for not helping to address the skills gap, almost half of employers (43 percent) are not extending their hand in collaboration to these institutions to help ensure the necessary skills are being addressed. Perhaps employers do not feel higher education can address all the skills gaps needed, but only 31 percent of employers are actively collaborating with colleges and universities to help close the skills gap.

In the last three years, has your organization collaborated with colleges to make the curriculum more responsive to workplace needs?[All Employers]

Section Two: Companies are challenged with closing their growing skills gap

More than half (52 percent) of employers surveyed report a skills gap at their organization. Over one-third (37 percent) of employers feel the average rate a skill is usable is four years or less, thus demonstrating how quickly roles are evolving at their organizations. Thirty five percent of employers note that it has been more difficult to hire for open positions in 2018 compared to just one year ago; an additional 60 percent report the difficulty has remained the same, with just 6 percent reporting that filling positions has become easier over the past year.

Has filling open positions to close your skills gap, been harder this year compared to 2017?[All Employers]

Nearly half (47 percent) of employers point to the lack of qualified candidates in the workforce as the cause of the skills gap at their organization. This has led to 70 percent of employers not being able to fill up to 500 open positions at their organizations over the past year.

Approximately how many job openings have gone unfilled at your company in the past year?[All Employers]

Section Three: Technology and IT skills are the most in-demand

The ever-changing technology landscape is impacting the ability to find qualified candidates for open roles at companies across the country. Technology and IT jobs are the hardest to fill, according to 43 percent of employers, followed by management jobs (41 percent). These roles appear to mirror what employers deem the in-demand college majors: computer information systems (63 percent) and finance and economics (56 percent). This, again, shows the onus employers place on educational institutions to ready the future job market candidates for hire.

Which roles are the hardest to fill?[All Employers]

In the survey, employers identified the hard and soft skills that are in-demand at their organizations. For hard skills, “strategic thinking and analytical skills” top the list (59 percent). Project management and computer skills are in-demand by nearly half (47 percent) of employers as well. The top soft skills in-demand are teamwork (38 percent), the ability to adapt to change (37 percent), and leadership (37 percent).

Which of the following hard skills are the most in-demand right now at your company?[All Employers]

Section Four: Companies are betting on untraditional means as solutions for closing the skills gap

There are several obstacles facing employers who seek to close the skill gap. Number one is lack of budget (53 percent) followed closely by difficulty finding external talent to train employees (52 percent) and not having internal talent to train employees (50 percent). As a result, companies are open to innovative ways they could possibly address their skills gap. Forty-percent of employers somewhat or strongly agree that artificial intelligence (AI) will help fill the skills gap at their organization and 40 percent also are looking to outsource work to vendors rather than hiring or upskilling their employees.

What are your three biggest obstacles to upskilling current employees? [All Employers]

The skills gap is also causing a significant proportion of employers to more seriously consider hiring candidates without college degrees, which is good news for alternative credentialing bodies like coding bootcamps. Two-thirds of employers would hire someone with a recognized industry certification (66 percent) or a certificate of completion (66 percent) in place of a college degree. Nearly half (47 percent) would hire a candidate with a MOOC-degree and one-quarter (24 percent) would hire a candidate with a digital badge.

How open are you to hiring a candidate who has one of the following in place of a college degree?[All Employers]

In all, 90 percent of employers are open to hiring a candidate without a four-year degree. This shows how strongly employers value the skills of a candidate over traditional credentials.

How open are you to accepting untraditional job candidates (those without a 4-year degree)?[All Employers]

Section Five: Companies are still investing in upskilling and reskilling their employees for future roles

Though looking for outside options, employers are still also looking to invest in their employees to help close parts of the skills gap. Nearly three-quarters (74 percent) are investing in upskilling employees for future roles and 62 percent are investing in the reskilling of current employees. Half of employers are spending $500 or more per employee on their upskilling and 40 percent are spending $500 or more on employee reskilling. Forward-thinking companies are even taking investment in alternative strategies like these a step further, creating their own internal skills boot camps, or considering the use of AI as a way to free up hundreds of manhours spent on repetitive tasks and redirecting staff attention to more complex needs..

Are you currently specifically investing in upskilling your current employees for future roles?[All Employers]

Are you currently specifically investing in upskilling your current employees for future roles?[All Employers]

Section Six: Conclusions and Recommendations

Employers across the country indicate that their employees are not adequately trained for current or future roles within the company. This has created a noticeable skills gap that employers feel will not be closing any time soon since they do not see a stable pipeline of qualified graduates entering the workforce after completing their education. As a result, employers are turning to non-traditional candidates and are open to hiring candidates without a four-year degree who have necessary skills. Employers are also spending money on upskilling and reskilling some employees while outsourcing other jobs. Technology and IT roles appear the hardest to fill.

Employers should look increasingly to partner with higher education – 43 percent do not partner with educational institutions to help address these growing needs. The skills gap already exists, so it may take time for higher education to catch-up and add necessary skills into programs, but it can be done and help be a long-term solution to the problem.

In the short-term, employers could devise shorter credentials, including badge/certificate programs with collaboration of higher education professionals. Employers say they lack experts to help retrain individuals; educators from colleges and universities are the subject matter experts in many cases and can collaborate with employers to develop the necessary programs and trainings. There are cases of innovation within higher education to help address just-in-time education such as the creation of badge programs, MOOC-degrees, and competency-based education programs.

In turn, institutions of higher education should become more proactive in reaching out to local employers to ensure their graduates are preforming strongly in the workplace. Identifying new skills, practical experiential opportunities, and technologies that students can be exposed to is key when developing relevant degree programs for students. Already there are successful cases of higher education’s partnership with enterprise such as Georgia Tech’s partnership with AT&T and University of Arizona’s partnership with Starbucks.

If employers and institutions can open a dialogue and establish a way to collaborate, a feedback loop can be created that can benefit everyone, including students and employees.

Cycle of Feedback and Improvement for Employers and Higher Education

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Contact Us

For more information on how Learning House is helping business and educators form partnerships to help close the skills gap, contact Jeremy Walsh.

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Jeremy Walsh

Senior Vice President of Enterprise Learning Solutions