Accelerated Trends Highlight Importance of Skills-Based Workforce Marketplace

By
- Posted
June 3, 2020

A recent Brookings article touched on trends that the COVID-19 pandemic will likely accelerate. Many of them were already familiar to communities and economic developers: automation, the housing crisis, the necessity of ubiquitous broadband, and the struggles of microbusinesses. And businesses are also keenly aware of shifts in the economy that were already in motion: (again) increasing automation, rise of remote work, difficulty in finding talent, and oftentimes retaining that talent.

The key for communities and businesses in traversing the labor market shifts was identifying in-demand skills, connecting individuals with those skills to jobs and, when necessary, connecting them to training for up- or re-skilling. This is still true, and now perhaps more urgent. Skills are what people have and employers need. And as the economy begins to re-open, there will be millions of people ready to put their skills to work. And as businesses begin either backfilling or making strategic investments in their workforce, finding the right talent with the right skills will be their biggest need.

The Reshuffle
While the economy will start up again, it’s difficult to predict exactly what that recovery will look like. There are too many unknowns, variables, and regional differences to predict with much certainty. But with such a major disruption, it’s inevitable that a reshuffle will take place. Things simply can’t go back to the way they were. Consider these possible scenarios and combinations of each:

  • Workers are able to return to their old job.
  • Either because their UI (unemployment insurance) payments exceed what they would make in their old job or available new one, workers don’t immediately return to the labor force.
  • Rather than return to their old job, workers enroll in school or invest in training.
  • Employers rehire laid off employees.
  • Employers, out of necessity or because of innovative solutions, conclude they can operate with a slimmer workforce and don’t rehire laid off employees.
  • Employers rehire laid off employees, but with changes in duties, hours, required skills, or a combination of all three.

These are a few of many scenarios, all of which will occur to varying degrees. But a thread through all of these scenarios, and the labor market trends which were already in motion, is the need to better connect job-seekers and employers. Skills have been emerging as that connection and the COVID-19 pandemic and economic fallout will accelerate the need for utilizing a skills-based approach both in job-seeking and in hiring. In the near-term, businesses, communities, and individuals will need to leverage skills in order to temper the economic fallout of COVID-19.

Businesses: Multiple Options to Help Workers

In an April analysis, McKinsey noted that “0ne of the lessons of the last downturn is that completely severing the relationship between employers and employees tends to lengthen unemployment. To the extent that companies can implement reduced hours, temporary furloughs, or creative job-sharing and redeployment programs instead of outright layoffs, the entire economy will be better positioned for a faster and stronger recovery.” Skills can be the Rosetta Stone for such redeployment programs and provide ways to limit outright layoffs.

As the economy begins to re-open, there will be millions of people ready to put their skills to work.By analyzing the skills of their existing employees, businesses needing to pivot can determine which employees can move into newly created or significantly altered roles. Such an analysis will also reveal what training, either internally or through a learning provider, could be delivered to upskill an employee into a role. Perhaps creating a new role that utilizes the skills of two employees, each on a part-time basis, is a solution to prevent outright layoffs.

In the event an employee can’t be retained, helping them understand their skills as they seek another opportunity can reduce the length of unemployment. Employers who work with their employees on finding a landing spot not only support a quicker economic recovery, but also maintain a positive relationship through a difficult time.

Communities: Skill Transferability Triage

Transferring of skills is an area where businesses and communities can and should work together closely. McKinsey went on to say, “When furloughs and layoffs are unavoidable, employers can take steps to help the newly unemployed land on their feet. Participating in digital platforms can help furloughed and laid-off workers connect with organizations that need temporary help to meet surging demand. Some companies that are downsizing are already forming direct partnerships with organizations that are hiring to help make these workforce transitions faster and more seamless. Furloughs can also provide a window, through online training, for employees to develop the skills that employers envision needing in the future.”

Economic and workforce development organizations can showcase these connections, particularly in the realm of skill transferability, thereby helping both businesses in need of talent and job-seekers in need of work. Take for example the immediate slowing and, in some cases, ceasing of construction activity. The near-term impact is substantial, but with a slow economic recovery, construction won’t just resume once social distancing measures are relaxed.

In the event an employee can’t be retained, helping them understand their skills as they seek another opportunity can reduce the length of unemployment.At the same time, with the increase in home delivery, there is a need for light-truck drivers. Emsi’s Skills Transferability report uses O*Net Occupations to find links between occupations. A Compatibility Index of 93 (out of 100) exists between construction laborers and light truck or delivery services drivers. The accompanying radar chart depicts those minimal skill gaps, meaning a quick transition can occur for these workers. Finding these sorts of skills connections are needed to support job-loss mitigation efforts.

Individuals: Making the Most of a Bad Situation

While not a desired or ideal situation, individuals furloughed, laid off, or waiting to return to work can make the most of a bad situation. Massive open online courses (MOOCs) afford these workers the opportunity to up- or re-skill. While the pandemic has forced a digital disruption of higher education that was needed, MOOCs are one of those trends that already existed but now will accelerate.

In addition to examining their resume based on skills, individuals can audit their existing skills to determine necessary training to make career advances. To help them make the right training decisions, businesses along with economic and workforce developers can provide industry and regional insights about the nuance of in-demand skills in their area.

The Bigger Picture of Skills
Economic and workforce developers have been keenly aware of the importance of skills in developing talent supply. The COVID-19 economic fallout is accelerating and shining a light on this already existing trend. While skills are valuable for immediate economic recovery efforts, they just as importantly provide the framework for data-driven workforce strategies in the mid- and long-term. This was true before COVID and is truer post-COVID. As regions and states develop re-employment strategies, skills provide the right data for policy and decision-making, alignment of learning providers and stakeholders, and connecting job-seekers with businesses in the skills-based marketplace.