It's time to redesign the talent development system to have a broader reach and more precise skilling.
In early 2022, we participated in a San Diego Workforce Partnership-sponsored panel discussion on labor market development at the Burnham Center for Community Advancement at the University of San Diego. Attendees were diverse in terms of ethnicity and profession, ranging from city and nonprofit officials to employers, colleges, and training organizations. Yet, many of their questions began with a similar refrain: "Finding talent is tough—any suggestions on how to expand the pipeline?"
The week prior, a meeting among large-city officials turned to infrastructure. The comments reflected a similar concern: "We need the money, but we also desperately need a workforce capable of completing the work."
That issue arises frequently. Some experts connect the current labor shortage to the Great Resignation, especially baby boomers leaving the workforce. Others attribute it to a significant reshuffling as employees look for better jobs.
Still other experts link the talent shortages to a reduction in immigration and labor participation rates. Regardless of the causes, the result is indisputable: It will not be easy to fill the 11 million-plus jobs now open today in the US.
Rethinking the pipeline
The talent shortage likely won't improve without intervention. Given the rapid growth of jobs for highly skilled and midskilled workers, college graduates alone can't meet the demand for qualified candidates.
In a 2020 paper, Harvard University professor Peter Blair; Byron Auguste, CEO and cofounder of Opportunity@Work; and co-authors write that the pipeline of four-year degree candidates will be short by at least 25 percent, and the US cannot sufficiently increase the number of college graduates to meet demand.
An unrelenting focus on academic degrees as a prerequisite or proxy for job readiness restricts the talent pipeline in a particularly unfair way. For decades, a legacy of K–12 segregation and barriers to college access have obstructed educational opportunities for people of color.
Although we are not experts in the talent development profession, we are organizational leaders with decades of experience implementing change in the public, private, and social sectors. For our recent book Growing Fairly: How to Build Opportunity and Equity in Workforce Development, we spent more than two years interviewing workforce experts—individuals who work for large and small employers, nonprofit programs, city halls, and education and training centers—as well as aspiring workers and learners.
From those discussions, we have drawn lessons that point to TD executives' uniquely important position in addressing the current talent gap and in helping to reshape our failing workforce system. Chief TD officers can add substantial value by enhancing how their companies—and the regions in which they work—identify and train talent, evaluate skills, and promote new training approaches.
Broad and precise
TD needs to be broader, exploring better ways to bring on nontraditional workers on the front end of the pipeline by using skill-based hiring rather than over-relying on degrees. And it needs to be more precise in the ways it uses training programs to replace missing rungs on the upskilling ladder for employees who want to grow and develop. A skill-based system with the right supports can increase pipeline intake.
In addition to the training, executive skilling and wraparound service changes will be necessary to convince many workers standing on the sidelines that a step forward will produce benefits. Remarkably, according to a Strada Center for Education Consumer Insights survey, in 2020, slightly more than half of Americans did not believe a good job was within their reach or that they could advance in their careers.
As part of our research on effective approaches to skilling, we spoke to hundreds of workforce participants and experts around the US. From our conversations, we developed 10 principles (featured in Growing Fairly) for architecting a more effective, equitable system—one that speaks to the current and projected needs for talent and that fosters greater economic mobility.
The principles fall into three categories: those that apply to the people whom the system is intended to serve, those that apply to the organizations supporting those individuals, and those that apply systemwide.
Skilling needs vary widely across populations. For some individuals, skilling begins with executive skills coaching; for others, it starts with industry-specific reskilling.
That means regional workforce development systems must include a wide variety of local partners from organizations such as Roca, which provides pre-employment cognitive behavioral therapy to justice-involved youths; and Walmart, which provides training to long-time incumbent workers. The broader the definition of skilling at the front of the pipeline, the more likely employers will be able to identify and train individuals with specific talents at a subsequent point in their journey.
While the occupational content of their training programs may differ, successful organizations build bridges or on-ramps to employment into program design. Those paths include formalized networking and experiential learning activities, such as intern and apprenticeship programs and scenario-based employer-generated project work, as well as sectoral initiatives that clarify career pathways and provide direct access to employers.
Across the US, we saw employers partnering with nonprofit and school leaders to provide opportunities for aspiring workers to learn and earn. The range of examples is wide and speaks to the importance of intentionally working across sector boundaries to create opportunity.
In every instance we examined, both the employer and prospective employee benefited. Employers had access to talent they would not otherwise have seen, and aspiring workers engaged with employers with whom they may not otherwise have had access.
The extraordinary work of Goodwill Industries is a creative case in point. It contracts with employers to hire, train, support, and manage employees who stay on the company's payroll while working for it.
For example, Goodwill Indianapolis partnered with one of Indiana's most successful businesses, Cook Medical. To increase its talent pipeline and with an eye toward equity, Cook built a manufacturing plant in a distressed neighborhood of Indianapolis, Indiana. It engaged Goodwill to recruit, train, and provide workers because Goodwill has more expertise than Cook with work support services.
On-ramps to employment that tailor an approach to individual participants' unique needs and circumstances open the door for more workers. Many aspiring workers lack sufficient literacy and numeracy skills and require remedial, adult basic education or English as a second language in addition to occupational training.
Yet, participation in ABE or ESL classes takes time—time that prospective workers do not have. Those individuals benefit from contextualized learning via a pedagogical approach that teaches math, reading, writing, or English in the language of company's trade. Occupational training programs that contextualize skill development with ABE or ESL often show great results.
Making changes that couple broader intake with on-the-job skill development at the regional, rather than company, level requires a system that brings together a broad array of providers whose efforts are tailored to varying needs. Cities such as Houston, Texas, and San Diego, California, show that putting those support pieces together is possible and effective, albeit difficult.
HR and TD professionals as well as other corporate officials should push the communities in which they hire to provide support services that accommodate the distinctive characteristics of a population diverse in confidence, skills, and background.
In addition to opening opportunity at the front end, talent managers can also do the same for advancement. Current workforce development efforts are fragmented and too often do not respond to employers' immediate or emerging needs.
Adopting skills as the currency of advancement changes local labor market dynamics. Switching to skills-based hiring requires the use of better, real-time labor data and a commitment to transparency and targeted training.
One exemplary model of switching to skills as the currency of promotion features IBM, which has the vision, size, and capacity to put together the pieces of a new pathway (see sidebar).
Case Study: IBM
Certificates and badges have emerged as signals of achievement. IBM is one of the country's leaders in using skills to provide an alternate hiring pathway for what IBM refers to as new collar jobs. We asked David Leaser, senior executive for IBM's training and skills program, to explain how the company uses credentials to support advancement. Leaser explains that the call for action originated from then CEO Ginni Rometty and her passion to identify "new collar" as a concept that reflects changes occurring in the U.S. labor market. The old dichotomy of college degreed workers filling white collar jobs and non-degreed workers filling blue collar jobs no longer reflects reality.
IBM began by reevaluating roles that unnecessarily required a college education and commissioned an internal team to go through job descriptions and strip out degree qualifications where they were not needed. Currently, the company does not require a college degree for roughly 50 percent of its roles in North America. Once the company eliminated four-year degree requirements, it needed to delineate the right sets of skills for those hiring and those seeking to be hired for applicable jobs. The team developed a system to help prepare people for those roles.
Source: Excerpted from Growing Fairly: How to Build Opportunity and Equity in Workforce Development.
In a system like IBM's, certificates and badges represent signals of achievement. Badges make it easier for workers to quantify and for talent managers to assess potential.
At the regional level, using skills as the medium of exchange for hiring and training across employer groups produces greater mobility, particularly into midskill jobs. Emulating the IBM approach regionally requires greater transparency about effectiveness.
HR and TD directors and workers alike struggle to determine what additional training courses and certificates make a difference. Workers, their coaches, and interested HR and TD leaders should be able to calculate the return on investment from a training or education offering and answer the question: If aspiring workers take this 16-week course for $1,000, what specific skills will they acquire and what job do most graduates secure and for what salaries?
Delivering usable information on required skills and the performance of training and education programs helps consumers of those services make informed choices about their options. And that information helps organizations determine which credentialing and training providers they can rely on.
Employers should nudge community college and training organizations to provide more sector-specific training. Educational and training offerings help people succeed when employers target those offerings to fill identified skills gaps in a way that produces a return for workers and learners. Information sharing between employers and training and education entities creates an important feedback loop regarding which training offerings are or are not effective.
Advocate for change
Today's labor market crisis is an opportunity for workers as well as for companies willing to approach workforce development in a different way. Talent managers who play a larger role in the company and the regional labor market can make a significant difference.
An employer that is willing to hire and promote based on skills and that enables employees to earn badges or certificates for training modules will enhance staff loyalty and company productivity. And it will substantially increase the pool of available talent.
However, even that will not be enough in the long run. Many prospective employees and workers who earn low wages or are unemployed need support services. Some need training in executive skills. Others need access to adequate childcare and transportation to overcome barriers to employment and training.
Those are systems-level issues, but they affect both workers and employers. TD leaders are ideally positioned to advocate for many of the needed changes both inside and outside their companies. And now is the time for change.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.