Shoring Up Your Workforce Today to Secure Your Firm’s Future
There's been a considerable amount of media coverage of the "skills gap" – the gap between the skills employers need to fulfill their existing vacant positions and the workers who possess those skills. As per U.S. Bureau of Labor Statistics data from April 2019, there were 7.4 million job openings, yet only 5.9 million hires – a gap that began in 2015 and has shown no signs of closing. Changing demographics, declining labor force participation rates, rising tuition costs, and significant incarceration rates, among other factors, have depressed college completion rates, making it more difficult for employers to find the right candidates for their firms. These trends are also currently on display in most states where employers have been working for several years with state and local governments and higher education institutions to grow the pool of qualified local talent.
Why the Skills Gap is Concerning
If national trends continue, the shortage will grow worse. A recent study by the American Action Forum (AAF) projected the gap between vacant jobs requiring bachelor's degrees and the pool of four-year degree holders will grow sharply over the next decade. AAF predicts this gap will be as high as 8.62 million workers, as well as a similar, though less substantial gap (765,000), between the number of vacancies in positions requiring an associate degree and the pool of associate degree holders.
With such significant shortages, businesses may be unable to meet production goals, reduce hiring, and eliminate jobs, while workers may spend less or have less to spend. The "lost" economic activity from this shortage is projected to cost the U.S. $1.2 trillion in 2029 – a substantial figure that could slow national economic growth, or exacerbate the effects or duration of a recession.
The Effect on the Midwest
This shortage could be particularly acute in Illinois, where AAF projects a deficit of 522,000 workers with bachelor's degrees and 136,000 workers with associate degrees relative to the number of vacancies requiring them. In Wisconsin, the deficit is projected at 192,000 workers with bachelor’s degrees and 55,000 with associate degrees. This would translate into $17 billion and $65.2 billion in Illinois lost economic activity, and $19.4 billion and $5.5 billion in Wisconsin, respectively. Such shortages would harm Illinois’ and Wisconsin’s business sectors, especially industries like healthcare and information technology, where the majority of positions require some level of college education.
Manufacturing positions increasingly involve some level of computer skills and knowledge and may be hit hard as well. Without a consistent pipeline of local workers, businesses may not only fail to meet existing goals, but may miss out on the kinds of insights from talented workers that help them innovate – improving manufacturing production and distribution operations, developing new products, or marketing and selling more effectively.
Getting Ahead of the Shortage
While AAF's projection is years away, the skills gap is already, unfortunately, alive and well in the Midwest. Don't wait to fulfill existing vacancies, even if you're currently meeting productivity quotas. Hire qualified individuals seeking careers – who will stick with your firm for the long haul. Building a robust workforce of dedicated, qualified employees will help you thrive during good and bad times.
AllStaff's suite of services can help you identify and recruit talented employees in the Milwaukee and Chicago areas for long-term positions. Check out our services today and build a deep bench of talent that will secure your firm's future.