Addressing Regional Skill Gaps

So the topic du jour is the skills mismatch in the US, which is all about how employers are having a hard time finding appropriately skilled employees during a time of abundant unemployment. It’s an odd phenomenon, and one that has folks at all levels flummoxed.

So why is this happening? There are a bunch of explanations – economic change has revealed that the American workforce: 1) has a lot of out-of-date skills and training; 2) vocational institutions and higher education aren’t equipping students with what employers want; 3) rapid advances in technology and business have created skills needs that very few possess; 4) as businesses become more lean, they want more out of their employees. And the list goes on.

You can read more about this via the following links:

  1. NPR: “2 Million ‘Open Jobs’? Yes, But U.S. Has a Skills Mismatch”
  2. Skills for America’s Future
  3. Washington Post: “The Great Jobs Mismatch”
  4. Fortune: “The Coming Jobs Crisis”

Suffice it to say, the economy has changed, which means business has changed, which means that education and training need to be updated to supply the 21st century skilled workforce that businesses demand.

What are education and training providers to do? Addressing all these apparent skill gaps is no easy task. At EMSI we have assisted a number a workforce agencies in their attempt to get dislocated or underemployed workers equipped with the right skills for local employers and in-demand jobs. If you are interested, we would be happy to discuss your organization’s need in this area, and help you adopt a similar approach so we can close the skill gaps.

Note: There’s a lot of on-the-ground work that goes into this process, and biting off too much at once is going to be overwhelming. However, with some data work on the front end, you can make a very strong, confident first step that will ultimately save you time and headaches – and get you close to making a bigger impact for businesses and workers alike.

Below are a series of steps that EMSI recommends. From a best practices standpoint, our clients have taken the critical information identified through this process to execute new strategies, invest in innovative practices, and adjust to rapidly changing economic environments.

Step 1: Identify Key Industries

You’re thinking, “I knew they’d say that!” This is such a good first step in many projects because it helps us understand where we should logically target efforts. It also helps to reveal if there are sectors that you are missing as a result of recent growth. Given limited time, budgets, and resources, developing a strong focus on the front end is key.

So here is a rundown: There are jobs available in every region, but not all jobs are equally important to your regional economy. Using labor market data and EMSI’s input-output model, we can determine which industries are having a significant influence on your regional economy in terms of jobs, earnings, and secondary sales. By allocating resources toward these industries, each dollar that you spend will have a greater job-for-job impact on your regional economy. Looking at the up-and-coming industries in your region will also help identify those industries that are most likely to experience labor shortages and occupations with skill gaps. Ultimately, using data-driven resources and tacit knowledge of regional leaders leads to the identification of optimal target industries, which serve as the foundation for additional research and workforce analysis.

You can see this type of analysis at work in Kentucky (click here).

Step 2: Staffing Needs and Validation with Employers

Once we have decided on targets, we will then work to unearth the key occupations those industries are employing. The primary metrics we will use to identify these occupations will be job growth and earnings, which will help to indicate if there are healthy trends for the jobs and if the pay is competitive on a regional basis. Finally, looking at occupation data for target industries also helps us to better understand where important skill gaps might be occurring.

After identifying key occupations, EMSI can then run a comparison of job titles to the number of graduates, or “completers,” from local educational institutions and determine the level of educational attention and investment that is currently being placed on preparing workers for these occupations.

Step 3: Regional Engagement and Ground-Truthing

With a solid list of industries and occupations to target, it is time to approach regional employers and community leaders to validate the data and better understand more anecdotal evidence for or against these industries/occupations. This is where the rubber meets the road. Having such data in hand will help us get much further with employers by allowing them to tell you the potential hiring outlook, key needs, and economic forces at work creating changes for key sectors, as well as any impending decline or growth that might be happening. It will also show that you have done your due diligence.

Many local workforce boards have developed smart business service operations that use such data to connect with employers in order to see what training and skills will be needed in the near future. In our minds this is perhaps the most straightforward thing that local agencies and educators can do to address potential skills mismatch in their communities. If your organization already has a process here, great! If not, EMSI can supply a survey that you can use to speak to employers to determine how they feel about the data.

Step 4: Articulate the Skill Gap

After we’ve had a chance to share the data with the community, EMSI will divide the occupations into groups based on skills similarity (e.g., finance, logistics, maintenance and repair). This will help us zero in on those skills that are truly critical to that group. Once these groups are identified we can start to articulate which knowledge, skills, and abilities (KSAs) are critical. We can also compare these KSAs to the output of regional college graduates to see if an apparent skill gap exists, or if one is likely to crop up in the future.

In addition, under these occupation groups we can present a list of key skills and educational qualifications that can be used to ensure that local training providers are in fact equipping future employees with what is actually in demand.

Step 5: Final Report

Once all of this has been reviewed and vetted, EMSI will produce a final report suitable for a broad audience in the region. The report will review all the findings and provide recommendations. EMSI can also be available to present the findings at regional meetings.

Contact Us

Please contact Rob Sentz, EMSI’s marketing manager, for more information.

Illustration by Mark Beauchamp

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