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Employers have reported difficulty in finding workers to fill approximately 6 million job openings. How can this be when the Bureau of Labor Statistics reports 7.5 million people are unemployed and millions more are underemployed?

Should the private sector have a bigger role to play in solving this problem? Surprisingly, the private sector already spends over $164 billion each year to educate and train employees!

With those numbers, it seems like we should have a 0% unemployment rate.  So, what’s causing these employment challenges to remain a consistent issue? Most signs point towards a skills gap, which can be defined as the difference between the skills that employers want (as shown by their job advertisements), and the skills employment-seekers have.

However, it is not so much a skills gap, as it is a skill and interest mismatch.

According to Matt Ferguson, CEO of CareerBuilder, “The gap between the number of jobs posted each month and the number of people hired is growing larger as employers struggle to find candidates to fill positions at all levels within their organizations.” Ferguson labels this inability to find qualified workers as on average a “nearly million dollar problem for companies.”

To understand the impact of the problem, CareerBuilder surveyed representative samples of employers and employees across all private sector industries. Respondents point to a series of negative effects including productivity loss, higher employee turnover, lower morale, lower quality work, inability to grow the business, and revenue loss.

Additionally, the Department of Labor reports the labor force participation rate is declining, and is significantly lower for segments of the population with a high school diploma.

The Manufacturing Institute points to three types of skill gaps in today’s workforce:

  • Lack of individuals with essential employability skills; including basic math, communication, reading and reading comprehension, collaboration, and problem-solving
  • Lack of workers with specialized skills needed to fill trade positions
  • Lack of applicants with necessary STEM

Solving the Skills Gap

It makes sense that to address the problem, someone needs to focus on boosting interest as well as providing proper education and training. Will that someone be the government through improved public education and workforce development programs? Or could it be private industry, which so desperately needs the skilled workforce?

For starters, in spite of states spending over $630 billion per year for public elementary and secondary schools in the United States, it’s obvious that the current public education system is failing to fill the gap.

Worker combined with military man

Unfortunately, if we look to the federal government to solve this problem, it is unlikely we will receive much help. Annually, the federal government provides funds to states for workforce development programs covered under The Workforce Innovation and Opportunity Act (WIOA). For the program year 2016, $10.5 billion was given to the states to pay for these programs.

Writing for The Hill, Opinion Contributor David Muhlhausen notes that on November 8, 2016, when most people were focused on the presidential election, the U.S. Labor Department quietly released an embarrassing report. The report concluded that all of the federal government’s primary job-training programs are relatively ineffective. This results in a large deficiency between the training people receive and the training required to land high-demand jobs.

Should the private sector have a bigger role to play in solving this problem? Surprisingly, the private sector already spends over $164 billion each year to educate and train employees!

In spite of spending a combined $800 billion a year while working independently, the private sector, educational institutions, the government, and training providers are still missing the mark. Perhaps it’s not so much the amount of money being spent but how that money is being spent.

To enact successful change there needs to be a bold collaboration among stakeholders—a consolidated, focused effort buying into one shared vision. It is critical to put the proper systems in place, in order to provide a well-educated and trained workforce who will meet societal and industry needs, both today and tomorrow.  Furthermore, the educational system needs to be re-engineered to produce the student outcomes that address these needs. This improved education includes greater STEM emphasis and the addition of ‘soft skills’.

Additionally, private industry can partner with local schools to promote manufacturing and STEM expertise (in interesting ways). They can begin by providing classroom resources—like lesson plans, videos, and field trip opportunities.

Ultimately, the government and private sector need to join forces and declare trench warfare, to effectively fight the growing skills gap.