Reskilling for Tomorrow: Employer-Led Approaches to Closing the Skills Gap

The employment picture has changed…There are going to be other industries that come along five years from now and we have no idea what they are.

– Susan Reichle, CEO of the International Youth Foundation

The first Friday of every month is known to economists, politicians, and journalists as “jobs Friday.” It is the day the U.S. Bureau of Labor Statistics comes out with its monthly jobs report, which is used as a proxy for the overall health of the U.S. economy.

Many months, these numbers make headlines, the stock market swells, and the President takes to Twitter to praise the strong economy. The problem is that the monthly jobs report does not paint the full picture. Despite all this “growth,” entire segments of the population are still struggling to live above the poverty line—especially younger generations.

According to a report by the International Labour Organization (ILO), young adults are three times as likely as adults to be unemployed, a number that has not changed much in the last several years despite the growing population. The youth labor force has shrunk minimally over the last 20 years, but the youth population has grown exponentially, resulting in less than half of the world’s young people being in the labor force.

Susan Reichle, CEO of the International Youth Foundation

Susan Reichle joined the International Youth Foundation as president and chief operating officer in 2017 and has served as the organization’s chief executive officer since 2018.

She has 25 years of experience leading USAID policy development and programs and previously served as the counselor to the agency, USAID’s most senior foreign service officer. At USAID, she spearheaded policy development, oversaw USAID’s response to the 2010 Haiti earthquake, and launched the agency’s first direct human rights program in Russia, among many other achievements. She is also an adjunct professor at Carnegie Mellon University.

Reichle has a master’s degree in national security strategies from the National Defense University’s War College and two master’s degrees from the University of Pennsylvania: one in the international development of appropriate technology and the other in government administration. She earned her bachelor’s degree in international relations from James Madison University.

Jaimie M. Francis, Director of Programs and Operations at the U.S. Chamber of Commerce Foundation Center for Education and Workforce

Jaimie Francis is director of programs and operations at the USCCF Center for Education and Workforce—the nonprofit branch of the U.S. Chamber of Commerce that focuses on elevating educational standards and the quality of the labor market in the U.S. Francis oversees the center’s programs for higher education, youth employment, and workforce development, including the Talent Pipeline Initiative.

Before joining the USCCF, Francis worked as a program coordinator at George Washington University and an admissions counselor at Davidson College. She has a bachelor’s degree in sociology from Davidson College and a master’s in higher education administration from George Washington University.

One of the driving trends in youth unemployment is the skills gap. The rapid evolution of work due to technology, innovation, and globalization has had profound effects on the labor market, but educational systems have not been able to keep up. As a result, many young professionals feel ill-equipped to enter the workforce.

“We are globally not able to do as much now through our educational institutions to prepare them,” says Susan Reichle, the CEO of the International Youth Foundation, a global non-profit youth organization that partners with corporations to connect young people to new job opportunities. “The employment picture has changed.”

Reichle refers to a New York Times opinion piece by David Brooks from a couple of years ago, where he wrote:

Right now, we have a one-size-fits-all education system. Everybody should go to college. The problem is that roughly one-fifth of our students fail to graduate high school in four years; roughly one-fifth take no further schooling after high school; roughly one-fifth drop out of college; roughly one-fifth get a job that doesn’t require the degree they just earned; and roughly one-fifth actually navigate the path the system is built around—from school to career.

“We don’t even know how to prepare and reach them,” says Reichle. “It is really about reaching young people where they are, whether that’s in high school or with the millions of young people who drop out of education.”

That’s where the International Youth Foundation is hoping to help. The organization works with major employers like McDonald’s, Hilton, and FedEx to set young adults up for successful careers through vocational and technical training programs. The key, Reichle says, is in training first for life skills, then for technical or hard skills.

A 2015 Wall Street Journal survey found that 92 percent of employers value soft skills as much as or more than technical skills. Yet, the majority of academic education—from primary school through college—rests upon hard skills, whether that’s algebra classes or standardized tests like the SAT and ACT, highlighting the disconnect between what employers need and what institutions teach.

The International Youth Foundation’s flagship life skills program, Passport to Success, aims to go back to the fundamentals of how to get a job and keep it. The program has been implemented across corporations, universities, technical schools, vocational training providers, middle schools, high schools, and even community organizations in more than 50 countries and 20 languages.

“It’s about showing up on time, how do you deal with conflict, and communicating effectively, which are needed at all levels but particularly for young people who have not ever really been exposed to that in a way that trains them and prepares them for an entry-level job,” says Reichle.

The program speaks directly to the needs of employers and falls directly in line with the growing trends that the ILO noted in its “Global Employment Trends for Youth” report. The future of work will require employees to have core work skills like complex problem-solving, an openness to learning, and adaptability, regardless of their education level.

The emphasis on soft skills is mainly due to how quickly hard skills change today. Young workers are often doing jobs that did not exist a few years ago. They are also much more likely to change careers or industries, so life skills such as adaptability and openness will play an increasing role in the success of young professionals as the nature of work evolves.

Reichle uses the example of the logistics industry, which is an $8 trillion industry that has become a massive part of the economy. “There are going to be other industries that come along five years from now and we have no idea what they are, so the thing about life skills is that they are enduring and always in-demand.”

Education and training systems have not changed alongside innovation, making it harder for people to have the skills that companies require; furthermore, companies have traditionally invested very little into talent management, making it hard for them to find the people they need.

Half of jobs postings in the U.S. go unfilled making it more challenging for companies to take on more work. If they cannot fit the jobs they need, they cannot grow the company, which does not sound like an indicator of a healthy economy. This issue is most pronounced in a few key sectors such as transportation and logistics, but jobs are going unfilled in nearly every industry.

“It’s definitely a multi-pronged problem, and it’s easy to point fingers and say this is because employers aren’t investing in enough free training […] or that this is because educators haven’t progressed quickly enough. You could make arguments either way,” says Jaimie Francis. “To solve this issue, we need to solve the communication problem that we’re all experiencing, in which so often it is up to the employer community to better articulate what their job needs are.”

Francis is the director of programs and operations at the U.S. Chamber of Commerce Foundation (USCCF) Center for Education and Workforce, the nonprofit affiliate of the U.S. Chamber of Commerce. She directs the Talent Pipeline Management (TPM) initiative, which is an employer-led approach that helps close the skills gap by encouraging the private sector to play a larger role in building talent pipelines.

“What we had consistently heard was that a lot of employers needed different things. They all seemed to talk about the same position but they called it different things,” says Francis. “How am I supposed to respond to their needs when I’m hearing a lot of different types of communication about what I think to be the same position?”

The initiative is a six-step process where companies hone in on their own needs, collaborate to create a common language around their needs, and implement supply chain management principles to solve their talent management challenges. Companies involved in the program begin with self-reflection. They identify the most critical job openings—not just about where there is the highest number of job openings, but also which jobs are most critical to a business. Then, they go through the process of prioritizing the skills and competencies for these jobs.

“Job descriptions continue to get longer and longer. It’s pretty rare that we find an employer and organization being really thoughtful about what’s included in that description,” explains Francis.
“By creating a shared language between employers—if they are able to explain not just how their jobs are the same but also how they’re different to those provider partners—the idea is that that shared language will help the hiring education community be more responsive to those employers’ needs.”

The Talent Pipeline Management initiative has grown from a white paper outlining a supply chain framework for talent management into a full curriculum. The U.S. Chamber of Commerce acts as a host organization that convenes employer partners so that they can learn from each other.

The TPM academy was created as a workshop where people from around the country come together to learn about the mechanisms and strategies, and then go back into their communities to implement talent pipeline management into their businesses. Over the last two years, the organization has trained more than 200 people. The goal is to create a digital program as well so that anyone around the country and world can access this framework.

The Talent Pipeline Management (TPM) initiative has helped businesses of all kinds identify and speak much more clearly about their needs so that they can collaborate with educational institutions and governments to help them build a pipeline of skilled talent.

DTE Energy, for example, partnered with five community colleges and seven high schools to establish a talent pipeline. Together, they created a Power and Trades Pathways program for high school graduates interested in pursuing a career in energy. Students can choose from six career pathways and complete the program in one year, preparing them to enter the field as apprentices.

“There are a lot of solutions out there that sometimes it’s just some organization and a framework that is needed to really be able to put together a high-quality career pathway,” she says, which is why the TPM initiative has been so successful.

Similarly, as part of the IYF’s employer-led work, Hilton partnered with the youth organization to encourage stable career pathways for young people in hospitality. About 10 percent of global employment comes from the hospitality sector and the majority of the people employed are young people, so for Hilton, it was essential for its bottom line to retain and grow good staff regardless of their level of education.

“It is really about trying to meet people where they are,” says Reichle, “and trying to prepare them with how to deal with these situations and how really to discover within themselves, most importantly, their own potential.”

The U.S. economy has added new jobs every month for the last eight years. The latest release, for February 2019, recorded a record-breaking unemployment rate of 3.8 percent—its lowest point since the 1960s—but numbers don’t tell the whole story.

Young people are severely disadvantaged in the labor market not only because they have a hard time finding jobs, but also because when they do find a job, the quality of that position is not great. Two billion workers—about 60 percent of the global workforce—are in informal employment, which is characterized as work not regulated or protected by the government, meaning that informal employees have lower salaries and job security and fewer benefits if any. The focus needs to be on carving out new quality career pathways and pipelines for young people.

“We need to make sure students have a good understanding of the workforce so that they’re not only familiar with the jobs that their parents have or their parents’ friends have. That they have a broad understanding of what jobs exist,” says Francis.

For Francis, Reichle, and many others, solving the skills gap is a complicated issue and one that requires the participation of all systems—private, public, non-profit, government—but ultimately it comes down to the private sector to communicate what it needs.

The private sector is where jobs are created, and companies know best what skills are in-demand. They need to be the ones pioneering skills development and working alongside other educational and training institutions to equip youth with the skills they need and thus help close the skills gap.

“Where we see the biggest gap—what the data shows us and what we’ve heard from our partners and employers—it’s really on the soft skills,” explains Reichle. “It’s those things that unfortunately so many young people today really don’t have as they transition. It’s not just high school and college.”

Ultimately, soft skills development eases the transition for students and workers into the workforce. It allows them to stay open-minded about what types of positions to explore and be more innovative in their careers. Hard skills come and go, but soft skills are timeless and transferable. They help open the door to new possibilities.

“It’s not just getting them into the door and preparing them; it’s really about their potential to grow within that industry,” says Reichle.