Like most growing economies, the United States relies on a steady flow of well educated workers. In fact, without this, the U.S. never would have become an innovative powerhouse. Today, the newest technologies on the scene, including cloud storage and faster computing, apps, hydraulic fracturing, 3D printing, energy storage, and nano technology, require more knowledgeable and highly skilled employees to develop, refine and operate them. But where are these workers?

In late 2013, the Dallas Federal Reserve identified an “acute labor shortage” in a variety of job categories. And a 2014 report published by Accenture, a global management consulting firm, and the Manufacturing Institute, the research arm of the National Association of Manufacturers, indicated that more than 75 percent of manufacturers surveyed indicated a moderate to severe shortage of “skilled” labor, while more than 80 percent of respondents reported a moderate to severe shortage of “highly skilled” labor.

In an August 2014 article, Stephen Moore, an economist and former member of the Wall Street Journal editorial board, said there are at least one million jobs overall that can’t be filled in the United States due to a lack of skills. And these jobs are not necessarily the most sophisticated either. Moore also identified various medium skilled positions, like truck drivers, and estimated there were 30,000 to 50,000 too few to run long haul routes. In sum, the shortage, at all skill levels, will get worse as the economy improves and the need for workers grows.

To a large degree, the future success of American businesses depend on their ability to find talented employees who can think critically, solve complex analytical problems, learn new skills quickly, and implement increasingly sophisticated technologies. Consider this: the iPhone 4 offers roughly the same performance as a $5 million 1975 supercomputer, says James Manyika in a report published by McKinsey Global Institute. As technology becomes more sophisticated, the depth and range of skills required by employees only will increase. But that’s not all.

More employees must be well versed in the ways of the world, not just in ways of the United States.

Today, a greater share of economic growth is occurring outside the United States. And why not? The U.S. population only represents 4.4 percent of the world’s population. To reach the other 95.6 percent, U.S. firms need to expand internationally. In turn, global business and investment is becoming a significantly more important factor in the creation of new economic growth here in the United States.

As a result, more employees must be well versed in the ways of the world, not just in ways of the United States. Consequently, it is imperative that employees have an understanding of foreign business, economics and politics, as well as foreign cultures and languages.

What functions may be required? A purchasing manager in a U.S. manufacturing multinational, for example, may be required to source inputs from around the world to support its production facilities in Asia and North America. To do this, the employee would need advanced skills in a host of information technologies, the ability to coordinate the activities of colleagues and business partners in a global network, and very likely, formal education in foreign languages.

Multiple factors are contributing to the worsening skills deficit. For instance, baby boomers, those born between 1946 and 1964, continue to retire in droves. The problem: they are taking their skills with them. In addition, after reaching their highest labor force participation rate of 60 percent in 1999, participation among women has declined, according to the U.S. Bureau of Labor Statistics.

Furthermore, the U.S. Census Bureau says the mobility of adults aged 25 to 29 is at a 50-year low, largely a result of the Great Recession and the ongoing period of slow economic growth. Consequently, fewer young people have been able to relocate to seek or accept new jobs.

In The Spotlight

Moving forward, to find and retain the best candidates, employers need to act now. Many will need to create more attractive working conditions and compensation programs. But that’s not all.

Today’s accelerated skills cycles, which already have fallen from years to just months, are forcing employees at every skill level to engage in the practice of life-long learning. In turn, companies will need to invest more in employee training programs and continually refresh and upgrade employee skills.

And to a greater extent, companies will need to team up with local universities, community colleges and trade schools to ensure educational strategies emphasize critical thinking over rote memorization, and that the courses offered satisfy market demands. And we certainly can learn from the Europeans, where 70 percent of the youth age 15 through 19 in Switzerland, 65 percent in Germany, and 55 percent in Austria are involved in apprenticeships covering hundreds of occupations, says Peter Downs in a 2014 Wall Street Journal article.

Due to the absence of qualified job candidates, many companies are attempting to automate as many functions as possible, while others are drawing on an relatively untapped tremendous human resource: older workers. Keep in mind that Americans are living longer, healthier lives and are able to contribute well after their first retirement.

This article appeared in International Insights, a Fifth Third Bank publication.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella is a world-recognized author and speaker on global business, competitive strategies and the latest economic trends. He also is CEO of World Trade Center BN, chair of the Upstate New York District Export Council, and founder of The Manzella Report and Manzella Trade Communications Inc. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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Talkback (5)

  • Guest (Wry)

    Permalink

    NO shortage of SKILLS. Too many companies demand 'purple squirrels' and are completely and totally unwilling to allow even 10 minutes for a person to pick up whatever skill may be wanted.

    While there are jobs that require subject matter expertise and sufficient training to handle the basics, there are TOO MANY "Managers" demanding "skill packets" and refusing, absolutely refusing to consider anyone who doesn't precisely and exactly meet their demands. Hooey. Or, the company is low balling -- $10 /hr for 15 years experience just so the manager can get another 50k annually.

    Instead of excessive demands, companies should consider how they can leverage candidates who have all the attributes and most of the skills.... Surprising how a little coaching and a couple of hours with the tools results in a "well-qualified, capable" person.

  • Guest (Ecks Novemo)

    Permalink

    I think a large part of the American dream is to grow up and become someone important, someone like a "manager". Because if you manage people -- then you're surely successful.

    I've worked with too many companies where every person I dealt with was a "manager" of some sorts. Dishing out manager titles instead of salary increases has become an easy way to keep people happy with less pay.

    The problem is that you end up with a lot of companies with too many people "managing" and less people doing actual work. A lot of the work that's left is shipped overseas where the "skilled American" simply can't compete. This keeps costs down and lets the rest of us live our American dream.

    So if you're missing version 2.4.5.6, skip it and just add some "managing" skills to your resume, because outside of pioneering companies, we are more and more becoming a country of successful "managers".

  • Guest (WT "Bill" McKibben)

    Permalink

    America has traditionally used education and infrastructure among other things to lead the world in a wide range of economic sectors. No more, we have focused on tax cuts and austerity for nearly 15 years. Now we are reaping the havoc of that folly. At a time when we need skills we have slashed educational spending. When our infrastructure is in disrepair, bridges collapsing, we have slashed spending on this vital resource. Is there waste in government spending? Of course, but across the board cuts are not the answer. From the inception of the modern economy -the industrial revolution- there have been many downturns. Every single one has been overcome through increased public support of the economy. Austerity does not work; never has never will. Take a look at the EU where they have taken this folly to heart; even Germany is faltering. There is more than one way to increase tax revenue, put people to work, take them off unemployment and get them paying taxes and spending. Then there's the matter of tax equality. In what universe does it make sense to take a larger share of the working poor's income than the rich? And don't tell me about job creators, the big guys aren't where the new jobs or increased employment comes from. America needs to get back on the track that made us great.

  • Guest (Steve Jones)

    Permalink

    I have subscribed to your posts and feed. As a HRM associate I must say that I found the post relevant to my subject area. HRM Dissertation Examples Thanks, Steve

  • Guest (Laing99)

    Permalink

    It's good decision and this will help to minimize unemployment from USA. I think good news for the students who recently completed their graduation that most growing economies, the United States relies on a steady flow of well educated workers without it, they can not meet their target. Any how, I like to get top essay writing services topessaywriting-services.com but you said right that with education we must have some skills.

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