Our country is facing a massive talent shortage.
Automation, artificial intelligence (AI) and other technologies are creating a digital economy that is disrupting industries where people have traditionally found good jobs, from office administration and agriculture to customer support and food service.
More than 60% of the world’s labor force is employed in occupations that could be partially displaced by automation and digital technologies by 2030 1 . The economic and social impact of the COVID-19 pandemic has further decreased demand for many customer-facing jobs. Research predicts that more than 10% of the total labor force in major economies will have to switch occupations in the next 10 years.
At the same time, we have seen increased demand for roles in healthcare and science, technology, engineering, and mathematics (STEM). As of January 2022, there were 10.9 million open jobs in the U.S. Between the increased demand for emerging tech jobs and open positions from the Great Resignation, companies are scrambling to fill jobs – and finding it difficult to attract qualified candidates.
As an example, Amazon Web Services has approximately 50,000 jobs open with a salary greater than $65,000. Why aren’t they filling them?
The Digital Economy Talent Gap
Many seeking employment – especially those making career shifts toward new economy jobs – don’t have the skills to fill these higher-skilled, well-paying jobs.
Roughly 79% of jobs in the U.S. listed at $60,000 a year require a college education. And 61%
of Americans do not have a college education.
Enrolling in ongoing skills training and education is not easy for many people. It means taking classes after a long day at work in their current job. Or giving up wages from a second job to make time for training. Few can afford the time and money it takes to complete college courses, even at lower-cost community colleges.
The employment gap is the largest for lower income workers and those from underrepresented groups. Racial minorities are overrepresented in occupations likely to be impacted by labor market shifts.
According to the U.S. Bureau of Labor Statistics, 40% of the U.S. workforce will be non-white by 2024. We need to ensure that underrepresented groups have equitable access to skill development and career opportunities. If we do not, we are all going to face massive talent gaps and economic hardship for under-skilled workers.
What if we thought BIG about a solution? A solution that just might reshape the landscape of America and close the growing gap between those moving into high-paying jobs and those who don’t have the skills or access to these jobs.
Reimagining Our Talent and Training Systems
Our system must be radically rethought. Our traditional four-year higher education model is no longer optimal. New creative solutions demand new approaches from business, universities, colleges, nonprofits, and government agencies. We are all working toward a more adaptive, human-centered system that can be replicated and scaled at lower cost and with higher success rates.
We must shift from the status quo or the U.S. will lose on the world stage. More people will fall into poverty just when they should have the opportunity to move ahead. And we won’t achieve real change unless business is at the table.
In February, the CEO Leadership Alliance of Orange County, with support from McKinsey & Company, brought together leaders from seven regions across the country. The members of this Regional Talent Collaborative are all trying to work on the complex challenge of closing the talent gap.
Here is what we identified as a group:
- Regions have similar priorities and there is clear consensus on the need to address talent gaps to promote growth and competitiveness in our industries.
- Regions are taking different approaches to address talent gaps, and regions struggle with building a “full” ecosystem that includes funding, education, and upskilling/ reskilling levers.
- There is a strong interest for national collaboration to build common assets and a shared path forward – including the Department of Commerce, large foundations, large public corporations, state governments, community colleges, and large universities.
We believe the business community is uniquely positioned to drive solutions that work for everyone. We also recognize that we have the best chance to succeed if we work collectively and identify resources and funding at the national level to advance our regional and local community efforts.
Innovative Models Show Promise
Amazon Web Services and Google participated in our gathering. These companies bring a unique opportunity with their certification programs, offering a glimmer of the new approach we envision. Lisa Gevelber from Google told us they have trained 50,000 people in technology-related certifications. It takes 90 days full-time to go through a program. When people start, they are usually making about $35,000/year. Starting pay after earning a certification in three months is $65,000. The hire rate for those who complete a certification is 47%. That is a good return on investment.
John Hennessy, Chairman of Alphabet, said during our meeting, “The innovation economy is
just gaining steam. What we are doing is critical for America’s future.”
When people are presented with the opportunity to accelerate their skill level – both technical and interpersonal – they are eager to learn. Our challenge is that we don’t have the systems in place – especially getting us to the “last mile” where a person lands a well-paid job inside a good company.
Advancing Our Collective Goals
We can use ideal design thinking to help solve the growing talent gap in America.
Together, we began to envision a new approach. Working in partnerships with government, major universities, and large foundations, we explored a common template to grow talent in local regions. There was a great deal of enthusiasm and energy around the advantages of working together.
Our next steps:
- Meet in Chicago in September and do a deep dive into the region’s progress toward solving this challenge,
- Propose a common vision, structure, and path forward collectively as the Regional Talent Collaborative, and,
- Lay the foundation to allow other regions to join us.
Do we believe this is possible? Absolutely.
We are intent on achieving our goals. We understand the intense need for reskilling our workforce, and we are energized by the opportunity to make a real difference for individuals, for companies, and for communities. We want to invite in as many people as possible that want to turn this vision into a reality. We challenge you to join us.
There is an old proverb, “If you want to go fast, go alone, if you want to go far, go together.” We want to go far, not just for the benefit of our local regional economies but so America can compete on a world stage.
We would like to thank the leaders from all the organizations that participated, including P33 Chicago, Greater Houston Partnership, Itasca Project, Greater MSP, Markle Foundation, OneTen,
Silicon Valley Leadership Group, Greater St. Louis, and Greater Washington Partnership.