Dear Governor-Elect: Business leaders understand the skilled workforce problem…

By Mary Gershwin, Business Champions and Stephen Wing, CVS Caremark  

Thirty-seven states will elect Governors this November.  Jobs and economic development will be top priorities in every state.   And new Governors should know:  You don’t need to launch your Administration with a distinguished commission that studies the skilled workforce challenge.  Rather, this is one area in which you can move quickly to engage business leaders in action, progress and solutions.   

With support from Lumina Foundation and The Joyce Foundation, Business Champions recently conducted a series of interviews with some of the nation’s top employers and business leaders that focused on workforce skills, competitiveness and the role of the business community in workforce education.  Our outreach included facilitation of a series of seven White House meetings for the President’s Economic Recovery Advisory Board, interviews with fifty top employers from small and large business who are championing a skilled workforce agenda in their communities, and meetings among philanthropy and employers.

Top business leaders understand the skilled workforce problem and are ready to join forces to work across party lines to implement solutions. Yet, leaders tell us they are frustrated by public sector approaches that devote months, and sometimes years, to problem analysis, when the challenge is clear and the need for action is urgent. 

Our advice to candidates is this:  Familiarize yourself with these five elements of the skilled workforce problem, and prepare a strategy that brings leadership together to focus on solutions.

• The American Workforce is falling behind. The percentage of American adults who have earned a degree or credential after high school has been flat across age groups for nearly thirty years, at about 39 percent.  This trend is especially troubling in the global economy.  The proportion of the population that has completed some college is rising in most developed countries, but not in the U.S. Among older adults – those between the ages of 55 and 64 – the United States ranks first with the highest percentage of postsecondary degree holders among all countries ranked by the Organization for Economic Cooperation and Development. However, among young adults, aged 24 to 35, the U.S. ranks tenth.  If current trends continue, the American workforce will be less educated in 2020 than it is today.

• Employers are demanding more practical skills and education.   The Business Roundtable reports that even in the midst of recession, 61 percent of employers say it is difficult to find qualified workers to fill vacancies at their companies. Jobs requiring at least an associate degree are projected to grow twice as fast as jobs requiring no postsecondary education.

• Millions of adults must upgrade skills and earn credentials.
  Job losses in the recession have hit low-skilled workers the hardest.  Last July, the unemployment rate for individuals with less than a high school education was 15%.  For people with an associate degree, it was 7%.   
  
  About 90 million Americans (half of the U.S. workforce) lack the skills required to function well in the global economy or to earn family sustaining wages.   
  
  An estimated 65% of the American Workforce in 2020 is beyond the reach of our K-12 system today; and school reform will not fully impact the labor force for many years. Over the next 10 years, a total of about 30 million young people will graduate from high school in the U.S. – hopefully, many prepared for college -- but today there are  twice that many adults already in the workforce who have no credentials after high school.

• It’s not just about four-year degrees: industry-based certifications, two-year credentials, and apprenticeship programs in high-demand fields play an important role.  A recent report by the President’s Council of Economic Advisors finds that “occupations that require only an associate’s degree or postsecondary vocational award are actually projected to grow slightly faster than occupations requiring a bachelor’s degree or more.” The Brookings Institute reports that 19 of the 30 occupations with the largest projected job growth over the next decade do not require a four-year degree.

• Adults are interested in taking action, but many are uncertain of what to do. The Business Roundtable reports that workers are misreading labor market signals from the recession. 70% think the recession is costing people jobs regardless of education or skill level, when in fact the downturn is falling hardest on low-wage workers who have less education and lower skill levels. 

More than 80% are willing to participate in education and training outside the workplace—regardless of income or education level.  62% of workers say a convincing reason to pursue training is that the future economy will be extremely demanding, and if their skills are not up-to-date, someone will pass them by. Workers want reassurance that investing in training and education will pay off. 41% see risks to pursuing skills training now, because they are unsure about what their job will require in the future.

Gubernatorial candidates who are serious about prosperity and jobs should understand these trends and be ready on day one of the job to implement solutions that inspire private sector leaders to get involved. 

We encourage Governors to make public/private solutions a top priority.  Companies such as CVS Caremark are demonstrating the unique value these partnerships produce.  For example, CVS partners with federal, state and local officials, with local nonprofit groups focused on job training and with the deans of pharmacy schools and others in higher education, to develop programs for recruiting and training colleagues from all walks of life and for building career paths in the communities where their facilities are located. One of the success areas of these workforce partnerships is the company’s Welfare-to-Work training program, which began in 1996 and has since hired more than 65,000 people who had been on public assistance. More than 60 percent of the employees hired since the program’s inception are still actively employed, and a majority of them have been promoted more than once.

Our next post will discuss how Governors can encourage these kinds of solutions. 

What type of workforce-training and education solutions do you have? Email them to Mary Gershwin at mary.gershwin@businesschampions.org 

Steve Wing is Director of Workforce Initiatives for CVS Caremark. He is participating with President Obama’s Economic Recovery Advisory Board, on a subcommittee tasked with advising the White House on workforce development strategies as part of its overall approach to economic recovery.

Mary Gershwin is President of Business Champions, Inc.   Supported by Lumina Foundation and The Joyce Foundation,  Business Champions Inc. is dedicated to engaging the business voice for a skilled workforce.  She recently facilitated a series of seven meetings on workforce development and the role of public/private partnerships for the President’s Economic Recovery Advisory Board.