Industry Market Trends

On-the-Job Learning and Correcting the Skills Mismatch

Jan 28, 2013

On-the-job training and development or a return to the classroom can enhance the skills and knowledge to excel at a job. The results have value for not only the employee's career advancement, but also the employer's ability to bridge the skills gap.

Many companies have sizable skills gaps in their workforces, and many others expect such gaps in the near future. Aware of such a challenge, business leaders realize they cannot hire their way out of the problem. Instead, they must develop their existing talent.

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Technical and educational requirements are rising across job categories and industries nationwide, and training and development programs have a currently underutilized role to play in correcting the job skills mismatch, according to recent survey findings from the Society for Human Resource Management (SHRM) and Achieve, an independent, nonprofit education reform organization.

The findings, based on survey responses from nearly 4,700 human resources professionals across nine industries, concluded that the industries most likely to report higher education requirements today compared to 10 years ago include health (54 percent), manufacturing (52 percent), state/local government (48 percent) and the federal government (46 percent). Looking ahead three to five years, the industries forecasting that most of their jobs will require higher education levels include manufacturing (59 percent), health (56 percent), high-tech (51 percent), state/local government (51 percent) and professional services (49 percent).

Compared with a decade ago, there are currently more jobs with specific technical requirements (according to 51 percent of respondents), and more STEM-related jobs (26 percent indicated). Forty-six percent said there is a higher education level required for most jobs. Looking three to five years ahead again, 60 percent of SHRM/Achieve survey respondents expect even more jobs with specific technical requirements, while 31 percent indicated more STEM-related jobs. Forty-nine percent said that simply a higher education level will be required for most jobs.

Many industries are projecting that future jobs will require more STEM skills, education and credentials at all levels, with some variations based on the industry and current levels of education required. That is, there is a growing need for workers who, while not holding a degree in a STEM field, have some formal STEM training.

"These 'STEM­-capable' workers should be able to use knowledge and skills from STEM fields but work in areas that are traditionally considered non­-STEM fields," the authors of a report by the President's Council of Advisors on Science and Technology (PCAST) a year ago wrote. "The ranks of the STEM­-capable workforce are expanding as this skill set comes to represent an increasingly valued commodity in many fields.

"For example," the PCAST report continues, "physicians, nurses and other health workers and advanced manufacturing professionals generally are not categorized as 'STEM professionals,' yet many of these jobs draw heavily on STEM knowledge and skills, and represent some of the most rapidly growing or wealth producing sectors of the U.S. economy."

Many employers are realizing that skills such as critical thinking not only allow an individual to digest, analyze and communicate information, but are needed across a broad range of disciplines. As demand for core STEM competencies - knowledge, skills and abilities commonly associated with STEM workers - grows, so too does the need for more training and development.

According to a American Society for Training & Development (ASTD) survey, the top reason for today's skills gap is that the skills of the workforce don't match the organization's strategy, goals, markets or business models. This was followed closely by "a lack of bench strength" in the organization's leadership ranks. Survey respondents also cited less investment in training, or a lack of support for employee learning and development, among the leading reasons for the skills gap.

"Having a highly knowledgeable and skilled workforce is critical for organizations in all industries to grow and be competitive," Jennifer Homer, vice president of communications and career development at ASTD, told IMT Career Journal.

Human capital rises over time with training and the experience of being able to identify problematic situations and troubleshoot problems. When implemented well, training and development programs provide dual benefits: employees feel the organization cares about their career development and are empowered to advance in their careers, while the organization gains a richer, better-prepared workforce and is therefore in a better position to tackle or ward off a skills gap.

For these reasons, on-the-job learning is becoming increasingly important, in terms of the immediate and long-term impact on both professional development and business performance.

Currently, 87 percent of organizations offer their employees some form of professional development opportunity designed to help them advance in their careers, according to SHRM's 2012 Employee Benefits report. Based on responses from 550 HR professionals, SHRM found that 83 percent of organizations offer off-site professional development opportunities and 65 percent provided on-site opportunities. Overall, 9 percent offer college selection/referrals, providing employees with education information and helping link them to colleges, and 74 percent pay for certification or recertification fees.

Talent management firm Bersin & Associates estimates that U.S. corporate training groups spent $67 billion in 2011, demonstrating a commitment to employee development as a means of closing skills gaps.

In the SHRM/Achieve survey findings, more than half (57 percent) said their organizations had training budgets in 2011. While state/local governments (72 percent), the federal government (70 percent) and the finance industry (59 percent) were most likely to have training budgets, the industries least likely to have training budgets were those traditionally employing a high volume of STEM-educated professionals: construction, mining, oil and gas (49 percent) and manufacturing (also 49 percent).

In terms of additional training needed for employees to advance, organizations cited job-specific training as the key factor for advancing from low-skilled labor (56 percent), skilled labor (61 percent) and administrative (69 percent) positions. Other professional development was the most essential training at salaried individual contributor/professional (76 percent), management (81 percent) and executive (63 percent) levels.

Meanwhile, 38 percent of organizations offer cross-training programs to develop skills not directly related to employees' current jobs, according to SHRM's benefits report. In addition to furthering employees' skill sets, this type of training can increase communication, understanding and cooperation between different departments, ultimately improving company cohesiveness.

Clearly, many organizations are realizing the workforce benefits of investing in education, training and career development. In turn, such initiatives have a positive influence on employee satisfaction, performance and retention, while arming workers with the skills and knowledge to advance in their careers.

However, while these programs can be an invaluable tool in aligning employees' expectations with those of their employers when it comes to the knowledge, skills and abilities required, the evidence suggests that employer-based training alone isn't enough.

"There are a number of facets to 'upskilling' the workforce. Employer-provided training is one aspect of addressing skills shortages," Homer of ASTD told IMT Career Journal. "Collaboration in the entire workforce development pipeline - from early education to post-secondary education, business and public-private partnerships - is critical to addressing skill deficiencies and filling job openings."

ASTD has identified four key stakeholders essential to enhancing the skills pipeline: 1) government, via policy decisions, agencies and flexible mandates; 2) private-sector businesses and industry associations; 3) educational and training institutions, including K-12 schools and two- and four-year colleges; and 4) nonprofit intermediaries.

Engagement by all four is necessary to address the disconnect between government, education and the needs of business, according to ASTD.