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Two Worker Shortage Challenges and Their Training Solutions

Great article written by our very own Dr. Victoria Steeger for Training Industry’s magazine, she is the vice president of partner development and communications for ProTrain, LLC, a grant reviewer for the U.S. Department of Labor and U.S. Department of Education, and a reviewing editor of three professional international journals.

“Too many jobs, not enough workers” was the headline of a December 2017 article by The Washington Post. This headline sums up a significant challenge for many businesses in the U.S. in 2018. A worker shortage, combined with an economy that grew by 4.1 percent in the second quarter of 2018, has resulted in the workforce qualified worker pool becoming “dry.” A recent poll found that 45 percent of midsize business leaders are “concerned about the limited supply of talented job applicants.”

There are many contributing factors for the worker shortage, especially for qualified workers, but a core problem is the historically low labor force participation (LFP) rate (the percentage of workers who can work and who dowork). There are fewer and fewer workers to fill jobs. The workforce pool is the smallest it has been since the end of World War II. The LFP rate steadily increasedfrom 1948 until the late 1990s. It reached a peak of 67.3 percent in 2000 and a current historic low of 62.9 percent in July 2018.

Since 2001, businesses have compensated for the decrease in workers though multiple avenues, including using technology and automation, outsourcing work to other countries, and creating a leaner work environment. However, there is a limit to those compensations, and many economists believe we are at that limit. The challenge for training and workforce development professionals will be to creatively address the need for a larger but qualified workforce pool. Below are two challenges for the LFP rate and some ideas to address them.

Changing Workforce Demographics: Shrinking Human Capital

Half of the decline in LFP rate is directly due to the aging of America. One of the largest generations in history, the baby boomers, is starting to leave the workforce, replaced by generations who look and act nothing like them — Generation Xmillennials and, now, Generation Z. For the first time in history, we don’t have the “normal” workforce succession plan.

Because Generation X only includes about 50 million workers, there are not enough of them to replace the 78 million baby boomers currently leading organizations. Therefore, a significant number of the 83 million millennials will have to come up the leadership curve with more speed and agility. They will make up 75 percent of the workforce by 2025.A significant number of the 83 million millennials will have to come up the leadership curve with more speed and agility.

Since millennials will have to assume leadership positions much earlier in their career than any other generation, they will need to receive the right type of training and mentor support to make them successful leaders. But our traditional training programs were designed for earlier and different generations and  may not be successful for millennials.

Mentoring is an excellent way to provide short bursts of training, develop soft skills, and provide additional engagement to help employees achieve personal and professional goals – all things millennials are looking for. Mentoring isn’t limited to one-on-one engagement. For example, at AT&T, mentoring takes place in self-organizing, topic-based groups called leadership circles. This approach allows them to reach more employees, and by using an online platform, one mentor can work with several mentees at a time, sometimes in separate locations.

Hiring the Long-Term Unemployed: Finding Invisible Human Capital

Twenty-four percent of the unemployed, or 1.478 million individuals, have been without a job for six months or more. The U.S. Department of Labor Bureau of Labor Statistics (BLS) calls these workers “long-term unemployed.” Only 10 percent of the long-term unemployed find a job each month. It has become so frustrating for them that many dropped out of the labor force and may never return. They don’t have updated skills, and employers aren’t willing to take a chance on them.

The first step in addressing this problem is to improve these long-term unemployed Americans’ skills and get them job-ready. Businesses can work with their local workforce boards to create hiring and training programs at little or no cost. Depending on the demographics of the employee, these programs can give organizations the opportunity to provide training and development to audiences that they may not have addressed previously.Businesses can work with their local workforce boards to create hiring and training programs at little or no cost.

Many employers see a long resume gap as a red flag, but they should reconsider. Here are some advantages of hiring long-term unemployed workers:

  • The long-term unemployed are under-accessed, not unqualified, and evidence suggests that companies who hire them have a more reliable and loyal workforce with higher retention rates.
  • Targeting the long-term unemployed can lower sourcing costs. If businesses are currently filtering them out, intentionally or unintentionally, they are narrowing their talent pool, which could mean they are spending more.
  • Hiring the long-term unemployed also has a positive impact on the local community. The benefits of employment compared to the toll of unemployment are clear. When people are employed, rates of depression and divorce go down, self-esteem goes up, and children do better in school.

For example, Catskill Dialysis hired Anthony Worrell as a patient care technician after his successful completion of a program called Jobs Waiting through the Sullivan Works One-Stop Career Center in Monticello, New York. Anthony had been out of work for over a year and had bounced between part- and full-time jobs. When Sullivan Works referred Anthony to Catskill Dialysis, he seemed like a perfect fit, because he had gained the knowledge, skills and abilities that matched what the business needed.

For workforce development professionals, the historically low LFP rate creates a need to develop innovative and generationally relevant learning opportunities for emerging leaders who have been tasked to rise to leadership much earlier in their careers than their predecessors. Additionally, the LFP rate has necessitated that training professionals look at programs, funding sources and more unusual populations to identify and train new workers.

Article originally appeared in Training Industry’s magazine published Sept. 13, 2018.