Filling the 'Middle-Skills' Gap

The trouble organizations are encountering when searching for available workers with "middle skills"-defined as those that require more than a high-school diploma, but less than a four-year degree-is causing a negative impact on corporate performance, according to a new report.

Monday, November 24, 2014
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For all the talk of organizations struggling to fill high-skill positions with high-quality candidates, there is another segment of the workforce that organizations are having just as much trouble locating, despite making up nearly half the U.S. workforce: those with "middle" skills.

According to a new report, Bridge the Gap: Rebuilding America's Middle Skills, released by Accenture, Burning Glass Technologies and Harvard Business School, 56 percent of employers surveyed earlier this year are struggling to find people with the qualifications to fill existing "middle-skills" vacancies, defined as those that require more than a high-school diploma, but less than a four-year degree.

In addition, 73 percent of respondents expect an increase over the next few years in their demand for these "middle-skills" jobs.

The report was compiled in January and February 2014 and involved 809 HR executives in the United States, across 18 industries, with a range of company sizes and revenues. Half of the participating companies had revenues of more than $1 billion.

The lack of available talent is having an impact on corporate performance, according to the report. Sixty-nine percent of respondents indicated that the "middle-skills" shortage regularly affects their performance, and 34 percent believe that the shortage of these workers has significantly undermined their productivity."The majority of U.S. employers across many business sectors are having great difficulty filling middle-skills positions, despite the fact that unemployment and underemployment remain a challenge for many Americans," says David Smith, senior managing director for Accenture's strategy, talent and organization practice in Hartford, Conn.

Hard-hit sectors include finance/insurance, IT/telecommunications, healthcare and social assistance, retail and manufacturing. In specific, some of the most difficult middle-skills positions to fill are engineering technicians, sales representatives, nursing assistants, network administrators and computer-support specialists.

According to the survey, inadequate training and lack of experience were seen as the leading impediments to filling middle-skills positions.

"There are two key ways to cultivate talent," says Smith. "You can develop the power of an organization's existing workforce and build those skills from within, or you can develop new talent externally through a network of trusted partners." However, only 22 percent of respondents, including those who said their companies are having trouble filling middle-skills positions, said they are always willing to consider hiring new employees who require additional training.

What can employers do to address these challenges?

"We recommend following an approach very similar to how leading companies manage their supply chains, keeping in mind, of course, that people are not products or spare parts," says Smith. "Thinking in terms of a 'talent-supply chain,' companies can provide the rigor needed to more effectively manage the supply and demand of people resources needed for the middle-skills talent pipeline."

According to Matthew Sigelman, CEO of Boston-based Burning Glass Technologies, the most important thing HR leaders can do is to leverage labor-market data to take charge of their own labor-supply chain. "Rather than rely on the 'spot market' for talent, most large and medium-sized companies can access new sources of market intelligence to track emerging trends, identify which skill sets are in short supply, and take tactical steps to beef up their recruitment and training efforts in those areas," he says.

"HR executives can take the lead in closing the skills gap by first working with their operational colleagues to identify the skills needed to fill the jobs that are most important to sustaining the competitiveness of their company, and those capabilities and skills that appear to be growing in importance," says Joe Fuller, a senior lecturer at Harvard Business School and lead author of the report. "These skills, or emerging skills, should be separate and distinguished from other work that, while needed, is not as leveraged to support the broader company strategy."

Then, according to Fuller, HR executives need to establish an ongoing and well-staffed partnership with talent sources, such as local community colleges and technical schools, supporting educators with apprenticeship opportunities, ensuring that their curricula are up to date with market needs by providing updated job descriptions, and ensuring accessibility to necessary tools so educators have the resources to teach skills effectively.

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One reason for the shortage of "middle-skills" talent, experts say, is that technology is increasing in the workplace, to the degree that many tasks that could once be performed by workers with high-school educations must now be performed by workers with more technical expertise. However, high-school students with interests and abilities in technical careers seem to be more likely to seek four-year college degrees for engineering and computer-technology degrees than immediately enter the job market after graduation.

At least one group of employers finding this to be a problem are heavy-equipment dealers and distributors-companies that sell and provide maintenance and repair on large equipment that is used in construction, agriculture and other industries. These employers are desperate to find qualified equipment technicians to handle equipment maintenance and repair.

"The industry began to notice the shortage in the 1990s, and that shortage continues to this day," says Steven A. Johnson, executive director of The AED Foundation. AED (Associated Equipment Distributors) is an association of independent distributors and manufacturers involved in the distribution of construction equipment. The AED Foundation helped to create the AED Accreditation Program to accredit colleges nationwide that teach students AED standards. Members are active in not only working with community and technical colleges to gain their participation in the program, but also in helping to attract and recruit students to the colleges.

Ziegler CAT, a Minneapolis-based Caterpillar dealer and AED member, began working with a number of local colleges around 1990. "We also try to bring in up to 10 students from each college each year to intern with us," says Paul Anderson, human resources technical recruiter for the company, which also provides scholarship money to some students.

"We also work to recruit high-school students to the program," he says. "In fact, last year, I probably talked with about 600 high-school students in Minnesota and Iowa."

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