Mark Grovic, the Co-Founder and General Partner of New Markets Venture Partners, also taught at the University of Maryland for 20 years
There is aclear opportunity to close the achievement and skills gapsbybetter aligning what is taught in the classroom with the skills employers need through competency-based education paired withskills based hiring and on the job training. Our nation’s continued focus on college as the preferred pathway to economic mobility in no longer serving students or employers, who are increasingly taking education and training matters into their own hands. Universities can either join forces with employers or be left behind.
The U.S. labor market continues to tighten while millions of Americans struggle to make ends meet. As of July 2021, the U.S. had a real unemployment rate of 9.2%, with52 million Americans making under $35,000 per year. At the same time, the U.S. labor market is now the most competitive talent market in recent history. Workers are increasingly seeking better employment opportunities,and employers of all sizes across most industries are struggling to hire qualified candidates.The Bureau of Labor Statistics reported 8.1 million open jobs in the U.S. at the end of March 2021, the highest amount since the bureau began tracking the data in December 2000. In its May 6, 2021 jobs report, the National Federation of Independent Business reportedthat a record 44% of small-business owners reported job openings they could not fill in April 2021, up from 24% in April 2020, and up from the average of 22% over the past 48 years.
As competition for workers increases, hiring mangers are adopting innovative ways tofind and keepthe qualified candidates that have the skills needed to succeed. Chad Moutray, NAM Chief Economist, said “Manufacturers consistently cite the inability to attract and retain talent as their top concern, and, they are taking strong proactive steps to overcome it.” The Institute’s survey estimates the manufacturing sector spent $26.2 billion on training programs, both for new and existing employees. 69.9% of firms reported they were either creating or expanding internal training programs, and 84.6% reported job-related technical training.
Employers are increasing their focus on assessing candidates competencies as a better way to equitably attract talent. As Cheryl Oldham, Senior Vice President of the U.S. Chamber of Commerce Foundation’s Center for Education and Workforce says: “We need to move toward a skills-based approach for educating and hiring where the skills taught in the classroom directly align to the skills required for a career.”
Competency based hiring is making degrees less relevant, as Google, Apple, IBM and many others have all dropped the degree requirement for quality professional level jobs. A recent survey from the U.S. Chamber Foundation confirmed that:
• There has been a lack of skilled talent among the available workforce in recent years. Nearly three-quarters (74%) of respondents agreed.
• Employers and hiring managers are preparing for a world where competencies – not degrees – are the most important factors when filling a job.
• Respondents (78%) acknowledged the need to overhaul their hiring practices to make this shift to focus on competencies.
• Employers are working with higher education to align what is taught in the classroom with the needs of the economy.
Unfortunately, US educational institutions have not kept up with their European peers in providing high quality, competency based alternative pathways to employment. US High schools still focus on their university placement as the best judge of a quality education and fail to provide quality options forstudents who are not a good fit for college.This is unfortunate for the 60% of students who leave the educational system by sophomore year of college and enter the workforce without the skills needed to achieve a good quality job. High tuition costs, long-term student loan debt, lack of an engaging and relevant curriculum, and difficulties finding a job in the field of their major are motivating students to look at higher ROI alternatives to college. It is time to reduce the stigma around technical training in the U.S. In most other countries around the globe, a skilled labor profession is not a second choice, but a conscious decision leading to a good job and a fulfilling life.
AsJP Morgan CEO Jamie Dimon astutely stated, "The new world of work is about skills, not necessarily degrees. Unfortunately, too many people are stuck in low-skill jobs that have no future and too many businesses cannot find the skilled workers they need. We must remove the stigma of a community college and career education, look for opportunities to upskill or reskill workers, and give those who have been left behind the chance to compete for well-paying careers today and tomorrow."
There are more and more examples of higher education institutions, especially community colleges, working together with employers to build the skills students and employees need to succeed. 64% of employers say their organization has collaborated with schools to make curriculum more responsive to workforce needs.This is the only way to help universities to remain relevant. As of today, 82% of corporate executives still believe that a college degree is important or essential, and 63% express confidence in college and universities, but only 45% of the American public does.
Collaboration between employers and schools around competency-based education and skills training represents the surest route to closing the education to employment gap.AtNew Markets Venture Partners, the oldest edtech and workforce venture capital firm in the U.S.,we recently made three investments that measurably bridge the education to employment gap, i.e Pathstream, CreatorUp, and App Academy.
Pathstream prepares students for high-demand non-coding digital skills careers. The Company’s programs are developed with leading technology partners and delivered via OPM (online program management) relationships with 12 leading university partners. Pathstream offers five certificate programs co-branded and developed with: Facebook, Tableau, Unity, Salesforce, and Asana.
CreatorUp is a digital creative platform and digital media training company that empowers learning organizations to order educational video creation and production through a highly streamlined platform. CreatorUp has as a unique differentiator their global network of talent, with more than 5,000 creative professionals worldwide registered with their talent-side platform, signing up for projects, and accessing training and upskilling.
App Academy is one of the most respected coding schools in the industry, offering online and in-person training programs with the option of no tuition cost until you are hired as a Software Engineer. The mission of App Academy is to lower barriers to education and provide students with the tools and skills that result in the successful placement of 93% of its students intoquality software development jobs.
Companies such as these that partner with higher education and corporate hiring partners to bridge the skills gapare beginning to address the failure of our current education system to provide the majority of students with the skills that employers are looking for.