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Skills Gap Fallout Lands with HR

Employers have to innovate fast to stay ahead of worker shortage

Hershey's Story

​The Hershey Company has been feeling the pinch over the last several years trying to fill maintenance and manufacturing roles at its plant in Stuarts Draft, Va. Manufacturing—and the perception of it as a viable career option—has changed a lot since the plant was first built in 1982 to produce Reese's Pieces. 

"Manufacturing is so important to the country, but it's not always people's first career choice," said Kevin Walling, the company's senior vice president and chief human resources officer. "But the quality of work in manufacturing, the benefits and the pay are exceptional. So we decided to partner with the Shenandoah Valley Workforce Development Board in 2018, which works with local high schools to encourage young people to seek careers in manufacturing and develop a future workforce."

The facility offers a two-week, paid boot camp to attract high school seniors, individuals from the Wilson Workforce Rehabilitation Center, and other people in the local community who have no manufacturing experience and want to see what working in a manufacturing environment is like. Thirty-six people applied for the boot camp in the summer of 2018—15 of them were accepted. Graduates are considered for full-time jobs.

"Hershey is an iconic company, which serves as a talent magnet, but we do have our challenges," Walling said. "Our plants are so technical. Maintenance roles have become electrician work, and electricians have become skilled programmers to operate advanced machinery. Our business also continues to evolve from traditional brick-and-mortar to a more ubiquitous digital footprint. So, like many, we are competing for the digital skill sets that help drive digital commerce: use of 'big data' and analytics."

Hershey's story is not unique; too many workers across industrial sectors lack the skills needed for critical jobs. To close this gap, employers and workers need to change how they think about work and the skills needed to do it.

"In the United States, we've got low unemployment, a low birth rate, a roaring economy and poorly performing K-12 education," said Johnny C. Taylor, Jr., SHRM-SCP, president and chief executive officer of the Society for Human Resource Management (SHRM). "You put all of that together, and it's the perfect storm for a skills gap."

Taylor said that the solution is effective training and development. "The people are there; they just don't have the skills needed for the 21st century."    

Employers need to shift their focus from reactive hiring to thinking of themselves as builders of talent, said Jonas Prising, chairman and CEO of global staffing and talent acquisition firm ManpowerGroup, based in Milwaukee. "With new assessments, big data and predictive performance, we have the best tools to identify adjacent skills, help people shift into emerging roles and create clear career paths," he said. "For individuals, the appetite for learning and continuous upskilling will [create] the route to better employment security. For organizations, creating a culture of [learning] so that people are equipped and open to adapt—to move within the company or elsewhere—must be a strategic priority."

Time for Change

The U.S. economy experienced solid growth in 2018, along with record-low unemployment, increased productivity and improved consumer confidence. Strong employment gains and a high demand for talent have stretched an already tightened supply.

HR is leading the search for the small number of qualified candidates available to hire by increasing pay to attract talent, refocusing on retention and succession planning, and heightening the urgency around employee development.

"The pressure on HR is acute," Taylor said. "The business is looking at HR and thinking that [HR practitioners are] not satisfying business needs because they haven't found the people to fill critical roles. They're saying that HR is failing the business from a talent acquisition standpoint."

HR should take a holistic approach to creating the workplace of the future, Walling said, "a longer-term view, anticipating need and then using data to drive decision-making in where the company invests in buy versus build."

To get in front of the problem, Taylor said, HR has to be at the center of programs created to align the needs of employers with the education being provided from pre-kindergarten through postsecondary schooling. "We are the bridge," he said. "HR should be looking at the generation coming up and asking what we need from that population―and then the group that's coming behind them. That's strategic, sophisticated HR."

Recruit Differently

Think ahead, Walling said. At Hershey, "we've curated a longer-term talent pipeline ahead of need," he said. "We'll start developing a relationship with top candidates a year in advance of an anticipated opening, so when the vacancy occurs, we know who we want, they know us, and we are able to fill the role within a week or so of the need."

Actively recruit from overlooked talent pools such as the formerly incarcerated, people with disabilities, workers returning from career breaks and older workers.

"We've got to cast our net into different pools where we've never fished before," Taylor said. "We don't have the luxury of leaving out significant portions of our population." Those different pools include people with criminal records, people with disabilities and people who have paused their careers to care for family members.

2018 survey from SHRM and the Charles Koch Institute found that many companies have not strongly considered candidates with a criminal record as a talent source—but are willing to do so. When asked why job offers were extended to individuals with criminal records, the majority of HR professionals responding to the survey said that they wanted to hire the most qualified candidate irrespective of criminal record. "Many people with criminal records are ready, willing and able to work," Taylor said. "It's right—and encouraging—that many employers and workers are willing to give them a second chance."

Hershey developed a program called Abilities First for workers in manufacturing who have disabilities. It emphasizes equal pay, equal work and equal expectations. One of the company's greatest successes has been converting many production lines to accommodate deaf workers. Supervisors and managers have been trained in sign language, and machines that were outfitted with bells and buzzers were adapted to use colored lights instead.

General Motors runs a career re-entry program called Take 2. The prime beneficiaries of the 12-week paid program are women and older workers who interrupted their careers to raise children, care for a sick family member or follow a spouse to a new job.

Focus on Qualities Candidates Must Have

Widen the top of the recruiting funnel by cutting requirements in job ads to what's truly essential—tossing out education and experience nice-to-haves—and hiring for fit rather than technical mastery of the role. 

"Finding the best, qualified people irrespective of an arbitrary barrier such as a bachelor's degree forces us in HR and hiring managers to ask what the person needs to be able to do in the job, and hire for that," Taylor said.

The first thing to do is toss the resume, said Jennifer Carpenter, vice president of global talent acquisition at Delta Air Lines. Resumes won't necessarily reveal a candidate's creativity, willingness to work hard and love of learning, she said. "A candidate's potential is far more relevant than any skill pedigree they may show up with." 

"Education and tenure requirements act as a proxy for skill," said Nicole Smith, a research professor and chief economist at the Georgetown University Center on Education and the Workforce in Washington, D.C. "As we know, they are not the best proxy, and there's a lot of mismatch."

Tanya Axenson, global head of human resources for Allegis Group, recommended that HR identify the core competencies needed for any job. "The question is, how much of that must someone possess when they sit in the chair on day one versus how much can be trained or taught?" she asked. "With the way jobs are changing more quickly, we're finding that more organizations are willing to hire for the core and make sure that the person has the necessary soft skills to navigate the workplace, and then train for the rest."

The soft skills—agility, creativity, teamwork, ability to learn—will survive the automated future, Smith added. "The jobs that endure will be the types of jobs that are not easily automated, where human reasoning is required," she said. "Workers will be trained in what they need to do at the job, but they need to show up to work on time, work well with co-workers and customers, and show creativity and critical thinking to be the type of model employee that is trainable."

These experts also recommend:

  • Offering internship assignments and mentoring opportunities to high school students. "Getting in front of younger students is a creative way to influence people earlier on," Axenson said. "There are careers and industries that kids may not even know exist."
  • Recruiting outside the local labor market and in parts of the country where there is a surplus of workers. "You've got to go where the talent is," Axenson said. Increase flexibility and remote work options to attract those workers.

Raise Pay

In the end, companies will have to improve wages and benefits offerings to differentiate themselves in the market.

"Surveys consistently find that when it comes to recruitment, retention and job satisfaction, cash is king," said Julia Pollak, a labor economist at ZipRecruiter, an online employment marketplace based in Santa Monica, Calif. Pollak explained that over the last year, employers have started competing for candidates by increasing bonuses and benefits faster than they increase salaries, cautiously preserving the flexibility to dial the perks back if the economy experiences another downturn.

"When I hear businesses complaining about labor shortages and skills gaps, the first thing I think of is not training and hiring barriers―it's wages," said Michael Strain, director of economic policy studies and resident scholar at the American Enterprise Institute, a public policy think tank in Washington, D.C. "Simply put, if businesses can't find workers—or can't find workers with the right skills—they should raise their wage offers. Basic supply-and-demand logic suggests that doing so will broaden the pool of workers interested in the job and will make the job more desirable to applicants."

Commercial airlines have raised starting pay for pilots, and retail and e-commerce companies like Target, Walmart and Amazon are hiking pay to compete for holiday workers, Pollak said.

Hershey evaluated its competitive wage structure for entry-level hiring and was able to attract 25 percent more candidates, Walling said. "We knew by raising wages jobs would be filled more readily, and we could get higher-caliber and more-diverse talent."

Axenson said competitive compensation is important but that paying people more is only part of the puzzle. "I think workers care tremendously about learning and development opportunities, and creative career paths matter just as much," she said.

Build Your Own Workforce

"Change happens so quickly now that organizations consistently have to reinvent themselves … That means employees have to reinvent, too, by upgrading their skills and learning new ones," said Rob Lauber, senior vice president and chief learning officer at McDonald's. "Rapid change causes those new skills to become obsolete quickly, so upskilling and reskilling will continue to be critical strategies, for learning and development and for business survival."

Hershey identifies high-potential talent in digital technology, manufacturing and leadership early on and places those individuals in accelerated development to not only jump-start its employees' careers but also build its own capabilities.

"Internal development is the most effective way to ensure success," Walling said. "We use data to determine what capabilities and skills we are going to need to develop three to five years out. Then we look at how to fill that pipeline. Do we have to buy those skill sets, or can we develop them?"

However, some employers are reluctant to pull workers away. "You're talking about taking employees you already have—they're already doing their job, even if it may not be around in two years or five years—and training them for jobs in the future," said Maria Ho, associate director of research for the Association for Talent Development in Alexandria, Va. "So many companies are so focused on immediate needs that they lose focus on the future."

Ho said the companies that have been most successful with skilling programs have tied them to internal mobility. "They've created career pathways, which lends more structure to a company's skilling efforts. These programs have clear learning goals and progressive training, which lends clarity, motivation and a sense of reward."

Atrium Health, a nonprofit health care network based in Charlotte, N.C., uses a rotation program to help employees develop new skills, said Rebecca Schmale, vice president of learning and organizational development. Selected individuals can do a one-month rotation at a smaller, high-performing hospital. "Participants work alongside the leadership team in that facility to observe and learn what they do differently from other locations. The rotation program gives them a full immersion into a different culture that achieves consistent success in the core areas of our business."

Ho explained that rotation programs are often associated with better success, but very few companies use them because employees fear that time away from their job is damaging to their career, and managers aren't eager to give up their workers for a protracted period.

"While participants are doing the rotation, we 'backfill' their positions with high-potential employees to provide them with a development and skill-building experience at the same time," Schmale said. "Knowing their responsibilities are covered frees those in the rotation to focus completely on learning while they're away. For the organization, it satisfies concerns about how that work will be done while also helping us prepare potential future leaders."

Internal certification programs, partnering with third-party training providers and offering financial assistance to employees for professional development have also been successful, Ho said. For example:

  • The National Retail Federation Foundation and large retailers such as Macy's and Walmart created a training and credentialing program that helps people acquire skills needed for a range of retail jobs, including customer care, sales and merchandising, and workplace safety.
  • Amazon's Career Choice tuition assistance program helps fulfillment center employees pursue certificates and degrees in high-demand fields. The company went further and constructed dedicated classrooms at its large fulfillment centers to make learning more accessible to participants who may attend class before or after their work shifts, or on days off.

Find Partners

Go straight to the source and get involved in designing curriculum that fits talent needs.

"The rate of change in technology developments far exceeds the capability of [college] faculty to update curriculum," Smith said. "Schools just can't keep up. But some higher-ed institutions are dealing with that by finding ways to create partnerships with local employers to help develop curriculum in exchange for a ready and qualified talent pipeline."

Hershey invests in colleges and universities to develop relationships with students and faculty to help identify top talent, teach classes, offer seminars and internships. "When it's time to graduate, we have offers in hand. It's an easy way to curate a deep bench of prospective talent and helps us address the skills gap," Walling said.

Partnering with higher-education institutions is important, but pre-K through grade 12 can't be overlooked, Taylor said. "We should not assume that every kid's goal is to finish high school and go to college. That's been part of the problem."

Alternative education models have emerged to meet employers' growing demand, including sector-based technology "boot camps" offering training in coding, design and other digital skills applicable in fields as diverse as health care and marketing. TechHire for example, is a national network of communities, educators and employers that provides tech training to people who don't have college degrees.

The Other 'Ships

Unlike internships, apprenticeships are often overlooked as a way to recruit top talent, said Steve Coman, human capital management leader at advisory firm Grant Thornton. "There is a need to demystify and destigmatize the whole concept of apprenticeships," he said. "In the U.S., there's this mentality that you must enter a college-type environment if you want to be successful and have an upward career track."

Offering apprenticeships is the perfect way to help close the skills gap because employers can customize on-the-job training and instruction to the position, said Pamela Howze, a program director at the Washington, D.C.-based National Fund for Workforce Solutions, which helps create and support apprenticeships and other work-based learning programs across the country.

In Greensboro, N.C., employers and education providers have created a manufacturing partnership to develop a pipeline of skilled employees for the region's advanced manufacturing industry, Howze said. The National Fund site in Cincinnati is working with the University of Cincinnati to provide pre-apprenticeship training in health care to ensure that individuals are prepared to succeed in an on-the-job learning environment.

Hershey's industrial manufacturing technician apprenticeship is an 18-month program that includes on-the-job training and more than 200 hours of instruction. Upon completion, apprentices become journeymen, a nationally recognized credential certifying their expertise in the job.