Structural changes in the labor market, including an aging population and the rise of the gig economy, have created a persistent skills gap for employers. This mismatch in talent has become a top challenge for businesses, educators, and policy makers. Businesses understand that a predictable supply of workers is critical to their growth and viability. Policy makers are seeing that persistent underemployment and a lack of opportunity deepen economic inequality. And educational institutions are experiencing increasing demands from organizations to tailor their offerings to the demands of industry. As a result, all are motivated to create a 21st-century workforce that can serve both business and society. The major question is how these groups can work together to address common goals.
McKinsey recently sat down with Jonas Prising, chairman and CEO of ManpowerGroup, to discuss changes in the labor market and how organizations should adapt. Prising shared his thoughts on identifying skills adjacencies and opportunities for upskilling, partnering with educational institutions, and hiring based on an employee’s ability to learn as opposed to current skill sets.
McKinsey: How have employers responded to these changes?
Jonas Prising: Over the past 20 years, organizations have been consuming labor and not growing talent. We need to think differently about attracting and growing talent internally. We need to move away from a model of “come to us and we will employ you for the next 40 years” to “come to us and after three to five years we promise you will have acquired skills.”
Organizations need to develop skills in employees that make them more marketable and employable inside the organization but that also make them more marketable and employable outside of the organization. And that is really the shift in employer brand promise that we see occurring.
What we need to be aware of is that most of our legislation and support structures are aimed at the traditional, full-time employment model. That’s where we see a lot of the evolution that needs to occur, so we can facilitate the ability of individuals to leave certain roles, move to others, and still feel that they can make a living and achieve their quality-of-life objectives. We also see that individuals with in-demand skills are making different choices in terms of who they choose to work for and why.
McKinsey: What other trends are you seeing in terms of reskilling and upskilling?
Jonas Prising: We believe that the next evolution of assessments capability is going to be in what we call LQ—the learnability quotient. Your future employability is not going to be based on your hard skills and soft skills but on your ability to acquire new knowledge as you evolve in your career. You don’t get to a finish line when you’ve completed a degree; it’s truly a journey of lifelong learning that’s going to make you more employable and more marketable.
McKinsey: How do educational institutions need to adapt to ensure their graduates can participate meaningfully in the economy?
Jonas Prising: Our general approach to training and workforce development in the US is when I need the person and talent, I will go into the market and I will find them. What organizations are seeing now is that they’re not able to just find people because the talent is not there at scale. And looking ahead it won’t be there at scale.
I think the whole approach to education will shift as we come to understand what kinds of skills—and what level—are needed for certain roles. In some cases, it’s going to be a four-year college degree. In other cases, it’s going to be a two-year vocational degree. And in other cases, it’s going to be a series of stackable certificates that are going to enable individuals to move forward in their careers in the way that they choose.
Education needs to move to a model that is faster and more specific to an outcome—that is, developing somebody who is employable. The evolution of education is going to involve shorter bursts with more tangible outcomes. And maybe also a more iterative process that matches the evolution of the changes in skills that are occurring in the workforce.
McKinsey: What is the role of business in facilitating the shift in the education model?
Jonas Prising: Currently we have people who come out of schools ready to graduate, but they may not be ready to work, and that, I think, is why the collaboration between the private sector and educational institutions has to become much tighter.
On the employer side, they are notoriously poor at predicting future demand for skills. And if they were poor before, it will be even worse in a rapidly changing environment. Closer communication between educators and employers is occurring in some parts of the world, but we clearly have a long way to go in a number of nations, including the US, to make sure that these connections are stronger than they are today.
Most organizations today understand that having access to skilled talent is what’s going to make or break their business strategy. That’s true for large organizations, medium-sized organizations, and smaller organizations. But one of the challenges, of course, is large organizations have resources to develop training on their own. Smaller organizations don’t—not to the same degree.
We see many smaller organizations collaborating with educational institutions in a more focused and intense way. Some of these organizations are going into high schools and talking about the future of work. They’re engaging young people in earn-and-learn programs—a form of apprenticeship where they pay young people to come in and learn about their activities—and then the students go back to school but stay in touch with the organizations so they can enter the pipeline. I think the advice to employers is to take their workforce strategy as seriously as they take their business strategy.
Chosen excerpts by Job Market Monitor. Read the whole story at How governments, technology, and data analytics can support workforce development | McKinsey
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