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By the end of the recession, the U.S. labor market had shed 8.7 million jobs. In the nine years since, the economy has recovered all of those lost jobs. But even with an unemployment rate last month of just 4.4 percent, not everyone is celebrating.
"This is an unbelievably fragile, shallow economy. Government economists say we're at full employment, but labor participation rates are low," said Fred Goff, CEO of Jobcase, a Boston tech company that provides a networking platform targeted to blue-collar occupations. "We have dumbed down the definition of full employment," said Goff, noting that many of the new jobs are part time and don't pay enough to lift people out of poverty.
Goff isn't alone in this assessment. "The quality of the jobs being created is, on average, lower than those lost in the recession. We need more companies to follow 'high road' business strategies that are both financially successful for business owners and provide good career opportunities for the workforce," said Thomas Kochan, a business professor at MIT and co-director of MIT's Sloan Institute for Work and Employment Research in Cambridge, Mass., Kochan is the author of Shaping the Future of Work (Business Expert Press, 2016).
In a tightening labor market, Kochan says that businesses need to view labor as an asset to be managed rather than as a cost to be controlled. His MIT colleague Zeynep Ton reached the same conclusion while researching operational inefficiencies in the retail and service sectors.
"Too many existing jobs are simply bad jobs," said Ton, author of The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits (Amazon Publishing/New Harvest, 2014). A bad job is defined as one that pays poorly, has unpredictable hours and leaves the employee feeling unappreciated, said Ton. Companies with "good job strategies" pay higher wages, invest in training (including cross-training) and provide opportunities for career advancement.
Ton argues that when employees are treated with respect, they are likely to work harder and better and be more loyal. She suggests that employers empower their front-line employees by soliciting feedback about their experiences and giving them the opportunity to "have a voice" through recommendations for improvements.
That's the strategy embraced at QuikTrip Corp., a convenience store and gas station chain headquartered in Tulsa, Okla., where entry-level workers are paid more than minimum wage, receive two weeks of training and are encouraged to apply for promotions. Stores subsequently run more efficiently, provide better customer service and have increased sales.
"So often people are asking the wrong questions," said Goff. "They are worried about getting hires in the door, but the bigger issue is keeping people employed."
The MIT professors agree that creating programs to train unskilled and low-skilled workers is an effective recruitment and retention strategy. Not only does it improve performance and employee engagement, it also creates a culture of learning and achievement.
A company that invests in training its lower-skilled workers sends the message to existing front-line employees that an entry-level job can be a steppingstone to a better work life and a more prosperous future, they say. In addition, it tells prospective hires that the company is willing to offer real opportunities for growth, which encourages labor force dropouts to become productive, contributing employees.
Many lower-skilled women with caretaking responsibilities also are absent from the labor market, largely because they can't afford the high costs of child care and transportation. Beyond the practical considerations of pay and benefits, companies with family-friendly policies and cultures incentivize working parents to apply for jobs by offering flexible work arrangements and work/life balance.
Addressing the Middle-Skills Gap
Beyond entry level, there's a critical need for skilled labor in many traditional industries. By the end of the decade, over 40 percent of new positions will be in "middle skills" jobs that require more than a high school diploma but less than a four-year college degree, according to Josh Davies, CEO of The Center for Work Ethic Development in Denver.
"Middle skills are eroding because firms have given up on training. They expect to be able to buy these skills on the market," said Kochan. "We need to train people for the jobs of the future and pay them fairly for the new skills they are acquiring."
"This isn't just a numbers game," said Steven Lindner, a talent acquisition and talent development partner with The WorkPlace Group in the New York city area. "Many occupations no longer attract enough qualified candidates."
Apprenticeships are increasingly seen as a vehicle to bridge the middle-skills gap. The most successful programs integrate classroom instruction with on-the-job training.
When recruiters at Mubea North America, a manufacturing company in Northern Kentucky, realized there weren't enough qualified applicants for their open positions, they created apprenticeship programs in four skilled trades: industrial maintenance, machinists, mechatronics, and tool and die. Their goal is to hire 12 apprentices each year, with each program lasting three to five years.
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Each apprentice earns a degree (at a local community college) and is paid while training. Upon completion, apprentices can choose to continue working for the company or move on, though most in the past have chosen to stay because they have developed relationships with peers and mentors, are well-prepared to do the work, and are guaranteed a well-paying job.
Kochan recommends that companies reinforce such commitment by creating career pathways for these middle-skills employees so that they can continue to grow their talents and increase their income.
A nationwide apprenticeship program jointly launched by the National Restaurant Association's Educational Foundation and the American Hotel and Lodging Association trains entry-level workers to become managers and is designed to be a career launching pad. Participating employers have found that investing in apprenticeships reduced turnover, improved productivity and enhanced job satisfaction, with 91 percent of apprentices still employed with their initial company after completing the program.
Changing of the Generational Guard
A Georgetown Center on Education and the Workforce survey predicts that retiring Baby Boomers will leave 55 million jobs open by 2020. At the other end of the generational spectrum, Millennials are expected to comprise nearly half of the labor force in the next three years.
"Baby Boomers are retiring fast, and we aren't training enough youth to take over their jobs," said Joe Lamacchia, author of Blue Collar and Proud of It (Health Communications, 2009). Lamacchia, who is the founder of a successful landscaping and driveway paving business in the Boston area, laments the growing pressure on high school students to go to college, even when it's not necessarily right for them. To help remedy that problem, Lamacchia made it his personal mission to travel the country educating young people (and their parents) about the value of blue-collar work.
"There's often a bias against blue-collar work," said Janice Urbanik, executive director of Partners for a Competitive Workforce in Cincinnati. "There are a lot of outdated ideas about what these jobs involve."
Urbanik encourages employers to reach out to high school students, teachers, counselors and parents to address myths and stereotypes around traditional blue-collar industries. People who think construction or manufacturing are "too dirty" may not realize how high-tech these industries have become or the types of opportunities they afford.
Noel Ginsburg, CEO of Colorado-based Intertech Plastics, founded CareerWise, the country's first statewide youth apprenticeship program, as a way to link high school students to industries and address manufacturers' demand for skills. Because manufacturers are facing critical shortages of skilled labor, they want to teach teens how to work for them, he said.
The program offers high school juniors and seniors the chance to spend three school days a week as apprentices, while earning classroom credit and a paycheck. After graduation, apprentices are offered full-time jobs and financial support towards community college degrees
Colorado leaders are hopeful that these innovative training programs will help them create a sustainable workplace for the future.
Eliminate 'Purple Squirrels'
The "purple squirrel" is a metaphor used by recruiters to describe unrealistic and overly specific hiring specifications. Practically speaking, there's no such thing as a purple squirrel, either in nature or the job market.
Lindner advises employers to adjust their recruitment strategies to better reflect market conditions.
"Managers who are more open to training and developing candidates for work-related tasks can provide a real edge in attracting talent," he said.
To that end, HR can help craft job descriptions that more accurately reflect position requirements. For example, many employers arbitrarily require college degrees for routine administrative and customer service jobs and, in the process, weed out viable candidates who can easily do—or be taught to do—the work.
While it's safer to look for candidates who have the exact experience and education that the position requires, many candidates have transferrable skills that they acquired in different industries and roles. Although some may not have a degree, they may have obtained certifications or participated in training to gain relevant knowledge.
"Don't focus solely on what they've done in the past," said Lindner. "Look at what they can learn and what they can be trained to do."
Some of the best hires are hiding in plain sight, he added. Millions of people are part of the gig economy. During the recession, they worked temporary jobs or sought out contract and freelance assignments as a way to earn money. Other workers had their hours reduced because employers needed to cut costs. Now that the economy has improved, these employees often seek more stable, full-time employment.
Forward-thinking employers are evolving creative sourcing strategies, investing in continuous training (at all levels) and providing career pathways. These are not just passing fads, said Kochan. Rather, they represent a new social contract between progressive employers and the workforce they depend upon for success.
Arlene S. Hirsch, M.A., LCPC, is a noted career counselor and author with a private practice in Chicago. Her books include How to Be Happy at Work (Jist Publishing, 2003), Love Your Work and Success Will Follow (Wiley, 1995), and The Wall Street Journal Premier Guide to Interviewing (Wiley, 1999). Her website is www.arlenehirsch.com.
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