Michael E. Hansen is the CEO of Cengage groupa global edtech company that enables student choice.
Recent labor market reports are sending mixed signals to business leaders. While unemployment had been pushed down, in August unemployment rose again. In the meantime, vacancies remain high, with 11.2 million job openings in July and 4.2 million Americans leaving their jobs that same month.
As economists and policymakers debate the best solutions to this labor shortage in an effort to revive the economy amid a recession, one thing is clear: many companies ache for talent. To solve this problem, leaders must focus on closing the persistent and growing skills gap between job seekers and employees.
Business leaders have a responsibility to understand the mismatch between candidates’ skills and the needs of the job market, as well as a responsibility to take steps to resolve it. As the CEO of an education technology company that enables student choice, here are three recommendations that I believe will help close the skills gap.
Review the hiring requirements again.
Look at a handful of job descriptions and you’ll likely see one requirement that’s consistent throughout: a bachelor’s degree. from my company Employability Report 2022 found that 62% of employers require a college degree for entry-level positions. At the same time, this survey found that 66% of employers who struggle to find talent believe removing degree requirements would increase their talent pool.
Diplomas are a great stepping stone into the job market and provide students with knowledge and skills that can help them enter the job market. However, we also found that most recent graduates (61%) believe employers should remove the degree requirement for entry-level jobs, and more than half of traditional graduates (53%) said they’ve held back from applying for entry-level jobs because they felt underqualified.
CNBC reported: earlier this year that more companies are now moving away from requiring university degrees. From my perspective, while a college degree will continue to be of tremendous value for many career paths, college isn’t the only path to work, nor is it always a reliable indicator of employability. Executives may consider removing strict degree requirements, especially for entry-level positions, to allow greater adoption of alternative credentials, such as vocational training, online skills courses, and previous experience. This would require a change of mindset for many employers, as well as a change in policy, to allow them to evaluate candidates based on their skills, values and suitability for the position.
At my company, for example, we started to address this by questioning our assumptions; we discuss the requirements for success in a position before posting the vacancies. This discussion allows for a critical look at all our assumptions about what the degree offers compared to skills and experiences gained through real-world situations. Sometimes hypothetical learning and critical thinking, developed in a higher education environment, are critical to success in a particular role, but more than occasionally we have also found that this is not the case.
Invest in continuing education.
Realistically, no new employee will enter an organization with all the skills required for the job, and they shouldn’t. This applies to candidates at any stage of their career, including those who are changing fields, moving to a new company in the same industry, or starting work from academia. Indeed, much of the “great layoff” resulted from employees’ desire for new experiences and achieving new levels of professional growth.
When we agree that the “perfect candidate” doesn’t exist, leaders must commit to prioritizing learning and development in the onboarding process. This training should go beyond logging into the IT system and proprietary activities. Employers can go the extra mile to help employees acquire soft skills such as time management, networking, and collaboration best practices. Employers can also encourage and support training that helps employees retrain based on their unique professional development goals.
More and more companies are recognizing the value of offering upskilling or reskilling programs for their employees. For example, IBM has dedicated to further education 30 million people by 2030, according to the company’s blog.
Forge partnerships with workforce development experts.
While employers can do much to address the skills gap, business leaders need to recognize that the responsibility does not lie solely with them. They may consider partnering with organizations specific to their region, community, industry and roles to find, develop, hire and train the right talent. Organizations like Opportunity@Work, for example, focus on connecting employees who are “skilled through alternative routes” with inclusive employers looking for talent to fill vacancies.
Organizations can also explore external internships and apprenticeships. These are programs that can help fill in-demand roles and fields, such as allied health and cybersecurity. These programs allow students to benefit from the direct path to an employer, while employers benefit from a consistent talent pipeline.
There is no single solution to closing the talent shortage and the gap between job skills, but there is one overarching theme: business leaders must adopt a new way of thinking about job skills and developing human capital must be a top priority. The companies that will succeed in attracting and retaining top talent will be those that take a new approach: from seeking new ways to find and evaluate the skills and competencies of potential candidates to helping employees expanding their skills and knowledge while on the job.