The Society of Human Resources, 2016 Human Capital Challenges reports that the Loss of Middle-Skill Jobs is the second trend that we need to be aware of this year. The effects of this include: lack of engagement and productivity, decrease in retention, an increase in the gap between wealthy and poor, as well as social disruption and societal upheaval.
What is a Middle-Skill job?
Middle-Skill jobs make up the largest part of America’s workforce. They generally require an education beyond high school, but not a 4-year degree. These jobs include clerical staff, computer support specialists, health care workers, sales people, construction workers, installation, maintenance and repair employees, heavy truck drivers, chefs and the list goes on. There are over 90 million American workers that fill these jobs and the FLSA changes directly impacts this sector.
Where did they go?
In May, 2014, Anton Cheremukhin wrote an Economic Letter titled Middle-Skill Jobs Lost in U.S. Labor Market Polarization. In his article he attributes the decline of these jobs due to an increase in automation of tasks, scarcity of workers with appropriate skills and relocation of jobs to foreign countries. The Department of Labor reports that middle-skill jobs lost during every recession since 1970 were not recovered, which many refer to as “jobless recoveries”.
When I started my HR career, I was inundated with statistics about the worker shortage that would ascend on us in 2010 and beyond. In 2000, we heard predictions that 18 million new jobs would be created before 2010 and through attrition, 24 million workers would need to be replaced. The estimates indicated that we would be 5 million workers short and 3.5 million jobs would require college-level skills or degrees (source). The labor shortage was imminent and we were encouraged to develop creative recruiting strategies and ways to educate and train our employees for the skills they would need to succeed.
Well, 2016 is here and there were 5.3 million job openings in May and approximately 1.8 million graduates received their Bachelor Degree (source). A national survey conducted by CareerBuilder, indicates that two-thirds of employers plan to hire from this year’s graduates, while 24 percent of the respondents did not feel that students were adequately prepared for the roles needed in their organizations. So, with a job market that has been polarized into high- and low-skilled jobs, what came first, the loss of middle-skill jobs or the loss of the middle-skill worker?
There are so many theories as to where the middle-skill jobs have gone. Are they really gone, or have the skills required to do these jobs changed? Before the recession, employers were having difficulty finding people that were qualified for the middle-skill jobs and expectations were lowered because they needed workers. Not a great way to fill a job, but there were not many choices as we were all told the labor shortage was looming, be creative. Then the recession hit and the barely qualified middle- and low-skill workers were the first to lose their jobs.
When jobs started coming back, we heard there were not enough jobs, others indicated they were not the right kinds of jobs, and then there are those that think we are still not fully recovered. Economist and the Federal Government have told us that the we are recovered, however, there are still people having difficulties finding jobs.
Have Middle-Skill Jobs changed?
Regardless of what you believe the state of our current economy is, in the beginning of the rebuilding employers had a sea full of fish to choose from and it seemed almost every job posting required at least a 4-year degree and 2 or more years of experience. This certainly helped weed out the minnows from the sharks; however, today unemployment rates are down substantially and the requirements have not changed. Did we shift our pre-recession expectations so drastically that we unintentionally created high-skill jobs out of the middle-skill ones by requiring a college education?
The National Skills Coalition reported that the demand for middle-skill jobs was strong in 2012, where 54% of all jobs fell in this category. It also indicated that demand would remain strong through 2022 with 49% of job openings being middle-skill.
Perhaps we are experiencing a shift in what a middle-skill job looks like. The non-routine tasks of today are different than that of our grandparents. Organizations are rebuilding and changing the way things are done based on their needs and resources. In 2014, a USA Today article indicated that by 2017 there would be an estimated 2.5 million new, middle-skill jobs added to the workforce (source). We still need healthcare workers, chefs, maintenance staff, truck drivers and construction workers. The skills that these workers must have in the new-age of technology has changed, but the foundation of the services they provide remain the same.
We know that there are job seekers pursuing open positions, while at the same time employers are having difficulty filling the positions that require specialized training or experience. So, what are some of the things a small business owner can do to help their organizations avoid becoming polarized with high– and -low skill jobs?
What can you do?
Evaluate your jobs to determine the knowledge, skills and abilities needed to be effective. Do your current employees all have 4-year college degrees? Is it a requirement or is it something you would like for them to have? If you haven’t already, develop Job Descriptions for every position in your organization. They are essential to effective recruitment, selection, conducting performance evaluations and outlining the expectations of what is needed to effectively do the job.
Review your on-boarding and retention strategy. You spent a lot of time and probably money finding that perfect candidate, make sure they are not disenchanted the day they walk on the job. Successful retention programs begin on the first day and effective programs can help you retain your top performers, reduce your turnover and motivate your employees.
Educate your employees about where the organization and your industry is heading and what skills they will need to strengthen and/or acquire. It’s easier to retain an employee than replace them, offering your employees training and giving them the guidance and support they need to grow, will also help your organization grow. This doesn’t always have to mean that you are sending them to expensive seminars or paying for a college degree. Last month we looked at Demographic Shifts in the Workforce. Use your aging workforce to train your new workforce and vice-versa.
What about the workers that can’t find jobs? Have we lost the middle-skill worker? We will explore what that looks like in our next article.
Human Resources Plus offers guidance and tools to help your business develop programs that will effectively make your organization successful in building a diverse workforce. Check out our website at www.hrplusinc.com for more details.