Using Workforce Data to Shrink the Skills Gap

Employers and states are putting analytics to work to close the skills gap.

Roy Maurer By Roy Maurer November 29, 2017
Using Workforce Data to Shrink the Skills Gap

Today’s technology is boosting local economies by helping college students answer an age-old question: What should I major in? The idea is to use workforce analytics to better align postsecondary education options to the business opportunities that await students after they graduate, which can help shrink the nation’s skills gap.  

Doing so has become increasingly urgent, given that the U.S. labor market has not yet fully rebounded from the Great Recession. Low labor force participation has created a significant talent shortage as well as a hypercompetitive hiring environment. Nearly 60 percent of employers have jobs that stay vacant for 12 weeks or longer, according to CareerBuilder research.

“Learners and workers need a modern guidance system with clear and comprehensive consumer information that will help them make good college and career decisions,” says Anthony P. Carnevale, director of Georgetown University’s Center on Education and the Workforce (CEW), a nonprofit research and policy institute based in Washington, D.C., and the lead author of a study on states’ efforts to create career pathways.

[SHRM members-only toolkit: Workforce Planning]

A Data Framework

The report highlights several ways states are integrating data to:

  • Assist schools in developing curricula aligned with the abilities that job seekers will need to succeed with local employers. 
  • Help workers understand how to take advantage of postsecondary education and training options as they change jobs and navigate their careers. 
  • Guide policymakers toward better-informed decisions about resource allocations to build stronger communities.

 “The challenge is to use local market data that is captured in real time so that students can see the relevance of what they’re learning and employers can see how those skills connect to what they need,” says Mike Knapp, CEO and co-founder of the job placement platform SkillSmart, which connects employers, job seekers and educational partners to help close identified skills gaps. 

Paving Pathways

While some states currently use data to advise school systems on making curriculum modifications based on local market needs, more work is needed to link students to current job opportunities, Knapp says. 

In Maryland, for example, state officials implemented several new assessments to ensure that high school graduates are “college- or career-ready,” but the tools don’t connect the test results to the skills employers say they need, Knapp says. “It’s still going to take a while for states to go from a theoretical exercise into a practical local activity that shows students how the skills they’re learning link directly to jobs in their communities.”

Other initiatives:

  • The Indiana Chamber of Commerce and Indiana Chamber Foundation created IndianaSkills in 2012 as an online jobs database. It allows employers to compare education requirements by job, view wages paid to similar employees around the state and create job descriptions. Job seekers can use the site to find career opportunities and short-term training programs that best match their skills and interests, are in high demand, and offer competitive wages. 
  • Connecticut college administrators are using workforce data compiled by the state’s labor department to measure demand for different career fields in local markets and guide their decisions about which programs to add, expand, contract or discontinue. The system includes the average earnings for selected positions and data projecting the annual number of graduates in each field compared to the number of available jobs. 
  • The Center for Employability Outcomes, an applied research center at Texas State Technical College, created an online database in 2014 that incorporates more than 3,000 validated skills for 900 occupations from 1,400 employers across the state. Natural language processing translates course descriptions into occupational skills that are matched against the skill sets employers are seeking. 
  • The Virginia Community College System developed its Virginia Education Wizard, an online portal that helps students make decisions about careers and postsecondary education and training options after assessing their skills and interests. 
  • The NYC Labor Market Information Service at the City University of New York (CUNY) Graduate Center began creating career maps in 2014. The five maps produced to date allow CUNY students to plan career trajectories using flowcharts of the most common career progressions based on actual work histories. They also include the median annual salary for each position, the typical educational requirements needed to fill each role, and details on which CUNY institutions offer the credentials necessary to advance in those careers.
  • Launch My Career Colorado is an online dashboard that allows high school students to visualize the return on investment from a credential at a particular Colorado postsecondary institution. Learners and workers can select jobs and view an occupational description, the expected earnings over a 20-year period compared to those of high school graduates, a list of associated skills common to workers in the industry, and the highest degrees common to workers in the field.
  • The Minnesota Department of Employment and Economic Development created a matchmaking program for job seekers who aren’t in college. The tool also helps workers transition to new careers. Job seekers can match their current skills to the qualifications needed for their desired occupations, view annual wages for various jobs, see postsecondary education and training options available to gain the skills in demand, and scan current job openings. The U.S. Department of Labor based its “My Next Move” career transition website on the Minnesota tool.

The states featured in the CEW report are in the early stages of turning integrated data into usable information. “The tools developed to date hold much promise and are a step in the right direction,” Carnevale says. “They also require an active outreach component to attract the intended audience. The good news is that states can borrow ideas from other states and implement tools in any one of these [areas] within a year or two.”  

Workforce Planning in 4 Steps

  • Analyze supply. Look at your organization’s current labor supply. Consider not only the number of employees within an enterprise and their skills, but also workforce demographics.
  • Study demand. Review future business goals with an eye toward forecasting your organization’s future workforce composition. Think about anticipated new product lines, competitive forces, anticipated workforce availability within geographic boundaries, and any other internal and external factors that affect available labor.
  • Conduct a gap analysis. Compare the differences in the supply and demand models to identify gaps between the composition of the current workforce and future needs. Categorize a variety of future scenarios and then select the one most likely to occur, with contingency planning for alternative outcomes. 
  • Look at solutions. Focus on how to bridge the gaps you’ve identified through recruiting, training, contingent staffing and outsourcing. Your strategies will depend on whether your organization will need to expand, contract, restructure or rely on contingent workers to meet labor demands.

Roy Maurer is an online writer/editor for SHRM who focuses on talent acquisition. 

Illustration by Mister Phil for HR Magazine. 

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