Companies across America are building stronger workforces by investing in employee skillsbuilding and education. Cities need to play a stronger role in supporting their efforts.
After the May jobs report was released, the Internet and airwaves have been awash with pundits each painting their own picture of the state of the labor market. Yet no matter how the stats are spun or which outlet you read, hidden among the array of data points is an irrefutable, often overlooked fact: there is an ironclad link between the level of education and the level of unemployment.
The jobless rate for those with a bachelor’s degree or higher stands at 2.7 percent, less than half the 5.8 percent rate for individuals with only a high school diploma. In between, at 4.4 percent, are those with some college or an associate’s degree.
The premium that the marketplace ascribes to knowledge and skill levels is growing. The global economy is becoming a knowledge economy. By 2020, the amount of jobs requiring postsecondary credentials is expected to climb to 65 percent. But today, fewer than four in 10 possess a college degree. Approximately 3 million additional credentialed workers will be needed in the next four years to meet industry demands.
Closing this gap is what compelled our business-led public policy think tank, the Committee for Economic Development of The Conference Board (CED), to seek how companies are advancing their workers’ education and skills development, and the challenges that prevent them from doing so. In our report, we interviewed executives from a range of company sizes and industries in Detroit, Memphis and other metropolitan areas — focusing particularly on their workforce initiatives or educational partnerships.
Whether developed internally or in partnership with institutes of higher education and community-based organizations, we found that employers were creating new ways to train employees to both do their jobs and further their education for the benefit of the worker and company.
In Memphis, FedEx encourages postsecondary attainment by paying for tuition upfront for eligible employees and sometimes offering assistance immediately after workers begin employment. These are helpful incentives when you consider that nearly a third of former students surveyed by the Bill & Melinda Gates Foundation point to the cost of college as a major reason why they have yet to complete their degree.
But money isn’t the only factor that can discourage someone from pursuing a degree. E-learning allows FedEx employees who are not able to take the time to sit in a traditional classroom the ability to further their education at their convenience. The SkillSoft Corporation oversees the company’s extensive online education, offering courses that equip workers with the skillsets needed to rise within the ranks and simultaneously earn college credit.
In Detroit, DTE Energy is building a talent pipeline by collaborating with local educational institutions. Among their partnerships is one with Monroe County Community College, which has developed a company-tailored certification program in construction management and an associate’s degree program in nuclear engineering technology. Graduates of the program are then eligible to advance their education at Lawrence Technological University, a four-year institution with which the company has also partnered.
Another educational initiative in the Motor City comes from CVS Health. Their targeted hiring includes recruiting individuals, many of whom are on public assistance and out of work, for entry-level positions. They can eventually become certified as pharmacy technicians, and the company also supports continued education toward two- or four-year pharmacy programs.
While these are just a few of the innovative workforce development programs we profiled, they and the many other examples in our report can be looked to as potential models for adaptation. But mobilizing employers to support their employees’ educational attainment at any scale is made easier if done as part of a comprehensive strategy that engages the broader metropolitan area. Efforts in Memphis and Detroit illustrate how the education of citizens was at the heart of more expansive initiatives to enhance overall quality of life and economic success. A collaborative civic approach is critical to deliver on these regions’ economic potential.
The need for higher education attainment in the marketplace is becoming increasingly significant, especially compared to our counterparts in other OECD countries. That demand can only be met by all stakeholders — including businesses, educational institutions, community-based organizations and elected officials — together, putting a priority on increasing policies and practices that raise the educational level of workers in their communities.
Read CED’s full findings in The Role of Business in Promoting Educational Attainment: A National Imperative.
(Top image: Courtesy of Thinkstock)
Cindy Cisneros is Vice President of Education Programs at the Committee for Economic Development of The Conference Board. She previously served as Principal Research Analyst at American Institutes for Research (AIR).