Recent research has indicated the so-called skills gap of the past decade may have been associated more with expectations of employers than the qualifications of the workforce.
Millions of jobs were lost in the U.S. during the Great Recession of 2008 and 2009, and for years after the economic decline officially yielded, high unemployment rates persisted. Even with large pools of job seekers, employers reported difficulty in finding candidates with acceptable skills, credentialing or postsecondary education. Many experts dubbed the phenomenon a “skills gap.”
Then, without major education reform or a unified effort to train American workers, the unemployment rate started steadily falling in 2013. By April 2014, total employment reached its pre-recession level. According to the Washington, D.C.-based economic research group and think tank The Hamilton Project, a part of The Brookings Institution, the labor market in 2017 had reached the number of jobs needed to return to the national employment rate prior to the recession, accounting for population growth and aging.
The unemployment rate continues to drop, yet the numbers do not mean all harm to the labor market resulting from the recession has healed, nor that the economy is at full employment, according to the organization.
While some economic markers indicate a tight labor market — a low unemployment rate and plentiful job openings — other factors, such as the share of people working part-time for economic reasons and the continued subdued wage growth, are consistent with a weaker labor market.
The employment recovery also has been uneven across regions of the county and in additional demographic respects. Notably, women have outperformed men and large unemployment disparities still exist among people of color.
“For our community, the African American environment, there’s still an imbalance,” said Randy Otterbridge, a partner and fund development adviser at Jubilee Jobs Inc., a Grand Rapids-based nonprofit.
“We still see high unemployment even though it is supposedly in a low unemployment environment,” he told MiBiz. “We’ve got to go deeper. We’ve got to ask ourselves, ‘Why is that?’”
Jubilee Jobs works to decrease unemployment disparities by providing GED preparation, work experience, criminal records expungement, soft skills training, and other human resources “filtering mechanisms,” according to Otterbridge.
Recently, researchers at the John F. Kennedy School of Government of Harvard University reported on a condition they call “downskilling,” meaning changes in employer skill requirements as a result of the shifting labor market.
Using a database of millions of online job postings, the research showed employer skill requirements fell as the labor market improved from 2010 to 2014, suggesting that the skills gap may have been a result of high unemployment, rather than the cause.
“If you take a look at the basic economic model, that suggests that if you have high demand, raise the price,” Otterbridge said. “In an environment where you have a whole bunch of people out there and there is high unemployment, now you have to raise the bar so that you don’t get inundated with a lot of noise in trying to find a placement for a job.”
As unemployment started to fall, employers and HR departments responded by becoming more relaxed again.
“You can see, as they have languished this thing in a way that suggests that there was a skills gap, it wasn’t necessarily the skills gap,” Otterbridge said. “It was the requirement of said skills that caused a gap.”
'Trying new things'
Employers increasingly are driven to partner with nonprofit organizations, schools, governments, and their peers to provide technical training or credentialing programs to potential and current employees who are eager to learn, according to Cindy Brown, vice president of talent initiatives at The Right Place Inc.
“Employers are trying new things, and I think that’s one of the cool things about West Michigan,” Brown told MiBiz.
As the demand for jobs in certain industries has changed, Brown has seen an uptick in employers who are seeking new hires with soft skills that can translate across various work environments.
“When you talk to any manufacturer or any employer right now to find out what are people missing today, you hear a lot of the soft skills and those are extremely important,” Brown said.
The local state workforce development agency, West Michigan Works!, is currently developing a program for students to document soft skills that easily integrate into the workplace, said Brown.
Regional collaborations like Discover Manufacturing also have formed to connect community colleges, higher education institutions and economic developers with manufacturers to expose manufacturing careers to young people, as MiBiz has previously reported.
“It’s important to consider that some jobs are just unattractive due to the fact there are low wages or irregular schedules,” Tammy Britton, a project manager from Talent 2025 Inc., told MiBiz. “I think industry matters. I also think technological advances lead to a higher demand for higher skills training.”
In particular, labor-intensive industries like manufacturing and construction — which saw “mass exit during the Great Recession” of workers, according to Britton — have grown increasingly concerned about finding future employees to replace the retiring labor force.
“There are not enough people who are coming into those fields to make up for the amount that they’re going to lose through replacement or retirements in the next five years,” she said. “Particularly in those industries, we’ve seen a lot of employers reaching out and establishing partnerships with schools just to bolster their internship programs or job shadowing or whatever they can do to get more students engaged and make them realize that they are lucrative careers that could provide steady income and support families.”
In the past, employers used two- or four-year college degrees as a proxy for competencies or knowledge, making the argument that by virtue of completing a degree program, an individual should be able to achieve success in a position, according to Talent 2025 researcher Alex Andrews.
“However, we’ve seen a shift in this mindset over the past decade as job responsibilities and skill requirements continue to become more specialized with just the changing nature of our global knowledge-based economy,” Andrews told MiBiz. “The extent in which these skills are communicated through a degree doesn’t necessarily capture the extent in which these individuals possess those skills.”
As a result, Andrews has noticed more employers placing emphasis on better defining the skills and abilities that should correlate to actual jobs and replace traditional “catch-all requirements.”
Opening the door
Marne-based metal fabricator DeWys Manufacturing Inc. started its company training facility, DeWys University, while unemployment was still high in 2012. The training curriculum began with welding and has grown into “all major core processes on the shop floor,” including CNC machining, powder coating, assembly, press brakes, and recently, leadership development, according to CEO Jon DeWys.
“We choose to be a leader in the industry and not a follower and I think that’s a cognitive part of what it is that makes us different,” said Laura Elsner, director of workforce development at DeWys. “If we wait for people to come in here who are educated, trained, capable of doing what we need them to do, we’re going to sit and wait and we’re never going to be able to stay ahead of the competition.”
Education has become a part of the strategic plan at DeWys, Elsner said. An increased emphasis on “intangible” qualifications like an eagerness to learn, goals-setting, and “company culture” has opened DeWys Manufacturing to individuals who may have previously experienced barriers to meaningful employment, such as people with disabilities, transportation issues or criminal backgrounds.
“Many employers have been forced to look at things a little differently,” she said. “I know from sitting on various HR roundtables, not everybody is quite as comfortable, whether it’s a return-to-work (program), or still, people with different disabilities. But those are the companies that you are going to continue to see struggle in the market. We have to be open to new conversations that we’ve never had before, because if you don’t, you’re really going to continue to just stay stagnant or maybe retreat from being an active employer.”