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America has a skill problem. It’s not the result of inadequate educational systems letting down younger workers or a lack of aptitude among older workers, as some claim. The problem is the widespread failure of American companies to share responsibility for skill development. Many employers are simply unwilling — or unable — to invest sufficient resources, time, and energy into work-based learning and the creation of skill-rewarding career pathways that extend economic opportunity to workers on the lowest rungs of the labor market ladder.
This national skills crisis becomes clearest whenever unemployment rates are low. As late as February 2020, most industries in the U.S. showed persistent signs of skills shortages. In manufacturing, for instance, there were 522,000 unfilled job openings in late 2019.1 There were similar long-standing job vacancies in many other critical industries, including financial and business services, health care, and telecommunications, with executives noting increased skills gaps in data analytics, information technology, and web design, among other areas.2
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The skills shortage was less obvious during the COVID-19 pandemic, as companies shed millions of jobs, but it persists despite that temporary softening of the labor market. And as hiring picks up along with the economy, employers may increasingly develop workforce strategies that are based not only on skills requirements but on increased commitments to boosting diversity and inclusion.
A better and more enduring skills strategy must begin with the recognition that our national skills crisis rests on a deeply rooted but flawed assumption: namely, that skills are individually held. This view overlooks the collective and context-specific nature of skills — that is, the ways in which they are shared, reinforced, and reproduced through group interactions at work. It also creates a false justification for the bias and hoarding that often accompany employers’ approaches to talent management. That results in more educated workers benefiting from corporate investments in retention, leaving those workers with less formal education underserved and undervalued — a phenomenon that labor scholars call the “great training paradox.” Moreover, it leads to the mistaken categorization of entry-level workers as “unskilled.” This positions them as irrelevant and easy to replace, ignoring the fact that this segment of the workforce — so often women and people of color —not only executes strategy but also has the grounded insights needed to improve organizational processes and practices.
The core assumption that skill is individually held results in supply-side approaches that place the primary burden for skill development on educational institutions and on students within them. These approaches have not and cannot, in isolation, do the trick. Skill shortages are a problem of employment, not education.
Since 2008, I have been studying a group of institutions that are helping U.S. employers reinterpret counterproductive assumptions around skills and prioritize their commitment to its continued development. These workforce intermediaries are diverse in their origins and affiliations: Some are an outgrowth of community-based nonprofit organizations, others are extensions of well-established labor unions, and still others are branches of state-funded workforce and community college systems. Joining their ranks are a growing number of business support programs, including membership-based industry associations and industrial extension programs. As skill needs across industries continue to expand and shift, particularly in response to new challenges and opportunities, leaders of companies of all sizes should consider how they can partner with these entities and benefit from their skill-enhancing strategies.
How Workforce Intermediaries Help Develop Skilled Workforces
Workforce intermediaries have a long and successful track record supporting small and medium-sized companies in a variety of industries, helping them overcome organizational barriers and other resource constraints that impede the hiring and training of front-line workers.3 Increasingly, they are helping enterprises of all sizes create internal career ladders and work-based learning systems, often in service of diversity and inclusion goals. And some are even assisting in skill development across business ecosystems and supplier networks.
Industrial cities such as Milwaukee, Cleveland, Chicago, and Pittsburgh are home to some of the oldest workforce intermediaries in the U.S. Chicago has an especially high concentration of intermediaries that have long-established relationships with companies of all sizes and across different industries. Jane Addams Resource Corp., Instituto del Progreso Latino, Opportunity Advancement Innovation, and Skills for Chicagoland’s Future are all focused on connecting Black and Latinx people to manufacturing jobs.
Chicago is also home to the Manufacturing Renaissance, which has seeded innovative workforce initiatives over several decades, including youth-oriented programs that enable urban-based manufacturers to develop next-generation talent. Its Manufacturing Connect program, for example, created a school-to-work pipeline by establishing a set of manufacturing and applied engineering electives and related work-based learning opportunities for high school students. Manufacturing Connect does more than simply prepare students for jobs, however; it also prepares companies for their new employees by encouraging them to offer internships, helping to revamp hiring and training practices, and coaching front-line supervisors.
These manufacturing-focused intermediaries have been joined by intermediaries in other sectors, such as health care, education, and clean transportation, in cities like Boston, Philadelphia, and Los Angeles. And some intermediaries have broadened their industry reach over the years, staying in step with employment growth by serving companies in multiple sectors. For example, San Antonio’s Project Quest provides training and career pathway support to numerous regional health care and IT employers, as well as to manufacturers and those in the building trades. Quest not only connects job applicants with high-quality, sector-recognized training; it also works with employers to unpack and restructure jobs to attract and better support the development of a more diverse local workforce.4
While large companies have no shortage of options when it comes to employee recruitment and retention, workforce intermediaries offer the added benefit of being, by definition, dual customer. They serve employer needs and seek to enhance employment prospects for low-income individuals, particularly underserved communities of color. That aspect of their mission can help companies meet their diversity and inclusion commitments with respect to hiring, wage setting, and career advancement.
The experiences of biomanufacturing companies in North Carolina show how intermediaries can help extend and diversify companies’ talent development efforts. Biogen, Merck, and Pfizer, among others, recruit large numbers of new employees through basic and technical skill development programs offered by North Carolina’s community colleges. These regularly updated programs have not replaced in-house training systems. Instead, they augment the companies’ worker training by developing a base of job candidates with a consistent foundation of knowledge upon which those businesses can build.
This effort was institutionalized in the 1990s, when biomanufacturers throughout North Carolina struggled with especially high rates of worker turnover — a challenge so severe that it threatened to stall the industry’s growth and drove employers to poach one another’s workers. “We didn’t want to be just trading people,” one biomanufacturing plant manager told me. “We wanted to grow the workforce in the area.”
Community colleges came to the rescue, developing an enduring solution in partnership with experts from another state-funded sector institution, the North Carolina Biotechnology Center. They created BioWork, a one-semester biomanufacturing certificate program for interested students, returning veterans, youth of color, and workers displaced from legacy manufacturing industries then in decline, including textiles, tobacco, and furniture. This certificate enabled colleges to provide the biomanufacturing industry with a steady stream of applicants. But they asked for something in return: that meeting biomanufacturers’ desire for work-ready skills and credentials would result in favorable hiring outcomes for unemployed and underemployed workers in the state. In response, the biomanufacturers agreed to soften their educational requirements, expanding the pool of eligible job candidates well beyond those with a college degree.
Hiring is not the only point at which intermediaries intervene to help companies and communities. An increasing number of intermediaries also help businesses identify and resolve deeper structural problems that undermine diversity initiatives and jeopardize business relevance and performance. In Chicago, a notable case in support of racial diversity involves insurance giant Aon and its ongoing partnership with intermediary One Million Degrees. Forged in 2017 when Aon launched a new apprenticeship program to recruit students of color from local community colleges, One Million Degrees provides the apprentices with weekly coaching and case management support. It also embeds staff members from the organization within Aon, using that vantage point to inform new and improved mentoring and management techniques that nurture the creative skills and imaginations of younger, more diverse workers.
Another, less recognized way in which workforce intermediaries support industry performance is by coordinating skill development standards and practices across business and supplier networks. This is a newer, at times aspirational, strategy, but it’s one that is likely to rise in demand as companies take steps to reduce their dependence on global supply chains in response to the disruptions experienced during the COVID-19 pandemic. While the workforce constraints of smaller second- and third-tier suppliers have not been a major factor in standard approaches to supply chain management, the challenges smaller suppliers face in training their workers drag down the overall chain — delaying deliveries, reducing product quality, and undermining creativity and innovation. As sector-based organizations, workforce intermediaries have deep knowledge of industry challenges, including emergent threats. They are well positioned to leverage their big-picture perspective to develop and test shared, multi-company workforce solutions, suggesting an opportunity to do so more explicitly in support of domestic supply chain capacity.
The Wisconsin Regional Training Partnership (WRTP), a Milwaukee-based intermediation pioneer, shows how this can be done. WRTP is a labor union-affiliated organization that has developed customized training services for hundreds of local manufacturing businesses. In 2013, it launched a Registered Apprenticeship initiative for industrial manufacturing technicians to extend work-based learning opportunities to women and workers of color. The program has been replicated in at least four other states, with enrollment surpassing 1,000 apprentices.5 WRTP pulled together a group of large manufacturers, including Harley-Davidson, as well as their local suppliers, to ensure that the program could support companies across an entire supply chain. Twenty-two percent of program participants are women, and 20% are workers of color — a notable improvement to Wisconsin’s overall industrial apprenticeships, which, like in other states, skew heavily male (94%) and white (95%).6
Intermediaries like WRTP have the capacity to help large companies pinpoint workforce pressures within their supplier networks — including pressures they might inadvertently create by demanding that suppliers lower prices or accelerate production.7 This is important because smaller suppliers buried deep within production and industry hierarchies are very sensitive to the risk that workforce development commitments could disrupt the flow of business. By drawing this tension into the light, intermediaries can ensure that all companies along the chain can invest more fully in their workforces. Large companies can play a reinforcing role by connecting their suppliers to workforce intermediaries and framing skill development as a shared commitment to boosting regional economic opportunities and industry success.
What to Expect When Partnering With Workforce Intermediaries
Companies, workers, and their communities all benefit when skills are recognized as a dynamic and shared resource and are collectively developed and enhanced through ongoing, active employer support and investment. As company leaders consider how to engage with intermediaries, they should focus on the following ways in which they can gain value from these relationships.
1. Rethinking whom to hire. Workforce intermediaries help companies change how they make hiring decisions, coaxing them to cast a wider net when recruiting new employees. This means rethinking the elemental question of who is considered to be skilled and shifting away from entrenched hiring decisions that exclude less formally educated workers.
As intermediaries engage employers around hiring, they often advise companies to relax stringent hiring requirements. They suggest looking past formal degrees and other academic credentials and well beyond the standard résumé by identifying a broader range of qualities and experiences that are more indicative that an applicant is likely to stay longer at the company. For instance, City Colleges of Chicago, a network of pioneering community colleges is encouraging companies to be more flexible when hiring for positions in information technology, including desktop support and software development. They advise companies not to wait to hire new employees until graduation but instead to recruit them as early as freshman year by offering earn-while-you-learn opportunities that augment classroom learning, jump-start careers, and build a bond with new talent.
Intermediaries also help companies adopt more encompassing approaches to recruiting prospective applicants. They do this by gathering information about job functions and skills that are actually required to carry out those tasks, such as by tapping current employees who have direct experience with established production practices and organizational routines. By treating first-line supervisors and experienced workers as domain experts, intermediaries help companies capture technical insights across a variety of tasks and occupational specializations.
Intermediaries use this information to develop more comprehensive skill profiles. Their goal is not to create rigid hiring requirements that every applicant must meet, nor is it to help the company better advertise a job opening by including a more thorough description of the required work. Instead, their objective is to make room for different combinations or bundles of skills and establish more realistic expectations by creating an à la carte skills menu that includes a set of minimum criteria, a set of preferred criteria that would guarantee consideration, and a set of ideal criteria that would guarantee a hire.
With such a comprehensive list of hiring criteria, it becomes highly unlikely that any one candidate will fully fill the bill; accommodations must be made. Emphasizing this reality, one intermediary leader told me, “I do see lightbulbs turn on, and I do see eyebrows being raised. … Employers say, ‘Hmm, OK; that opens up some degree of freedom for hiring processes.’” It may seem counterintuitive, but more detailed skill profiles don’t undermine inclusion; they facilitate it through stronger advocacy in support of job seekers who have some combination, though not all, of the preferred qualifications.
This initial work around hiring alerts employers that they will need to prepare for skill gaps and work to close them both in new hires and in existing employees as the needs of the company change over time.
2. Identifying internal obstacles to skill development. Once intermediaries help employers with their immediate hiring needs, they turn to the harder task of identifying organizational routines and practices that create barriers to skill building and the support and retention of employees. Sometimes these barriers arise because training is underfunded or time isn’t set aside for employee development. Sometimes they manifest in managers who don’t understand — or don’t accept — their roles in workforce development.
Here, too, ongoing conversations with a wide range of incumbent front-line workers prove critical. They provide intermediaries with insight into worker dissatisfaction or deep-rooted tensions, often down to a specific department or supervisor, that leaders often don’t see. They locate the actual source of friction and more accurately convey details about it to the company’s leaders when explaining why this dynamic is problematic and needs to be addressed.
This is a form of consulting that straddles business management and workforce development, during which intermediaries look for obstacles within a company that can undermine worker retention. Describing this process to me, one intermediary mentioned he might say to a company’s leaders, “I know that you want [to hire] 20 people right now, but before we do that for you, you really have to look at your third shift because there’s high turnover there.” And to make the implications palpable, he might add, “I don’t want to get you 20 good people and they all quit.”
Company leaders can avoid the high cost of employee turnover by asking intermediaries to evaluate workplace culture and by being open to that assessment and critique. With that help, leaders can better anticipate conflicts that can undermine a successful initial work experience. They can also tap the larger business community that intermediaries foster to gain additional insight from other company leaders on what to look out for and what to avoid. One employer, reflecting on that learning, stressed that “the bottom line is that we [the company] need to be prepared just as much as [new hires] when they come in to work.”
3. Revamping workforce routines and practices to emphasize ongoing development. Flagging problematic workplace dynamics is easier than solving them — a task that usually requires time, dedication, and resources on the part of employers. The workforce intermediaries I’ve studied are committed to working with leaders over the long term to develop and adapt effective solutions that ensure that the employment opportunities they create are long lasting and beneficial for all involved.
Intermediaries will often push companies to commit greater resources and time to work-based learning and on-the-job skill development. If a supervisor or manager is initially identified as the primary source of workplace conflict, the focus of training might start there.
Leadership training around communication is a common area of focus. This need was emphasized by an intermediary who told me the story of a manufacturing plant manager who instituted a literacy training program after receiving a handwritten note from a group of welders saying they couldn’t read. Belatedly, he discovered the welders meant that they could not read the specifications on production orders because the company had switched to a new style of pen with ink that smeared by the third shift.
However, intermediaries are most committed to focusing resources and attention on entry-level and front-line workers and helping to establish and extend the supports needed to advance these workers to higher occupational rungs and income brackets. Intermediaries will help companies develop onboarding protocols to support new-employee training, as well as skill-building and career-enhancing opportunities that benefit incumbent workers.
In some cases, intermediaries resurrect training or mentoring systems that have gone dormant as the existing workforce has aged or mastered requisite skill sets. In other cases, this is achieved by shoring up and extending the reach of existing training systems or building entirely new training solutions from the ground up. For example, the Manufacturing Connect program helped one company design a new training system for all entry-level employees. The company also created an official buddy system in which new employees were paired with one or two veteran workers to learn to navigate in the work environment.
To gain the most benefit from engaging with intermediaries, leaders must confront deeply held assumptions and myths about skill development. This means thinking differently about individual workers and their untapped potential, as well as reinterpreting skill needs more generally in relation to other demands on the company. A common assumption that stops many employers from investing in skill development is a nagging concern that incumbent worker training will come at the expense of production needs. Intermediaries factor this and other concerns into recommended actions: One intermediary, for example, helped a manufacturing client replicate part of the company’s production system in an offline training space. This enabled entry-level workers to gain hands-on experience at the job site while reducing the risk that training demands would conflict with product quality standards. It also allowed the company to rotate experienced workers into the training process without undermining production goals.
A New Skills Mindset
To resolve the persistent skills gap in the U.S., company leaders need to reframe long-standing perceptions around skills. They need to stop treating skills acquisition as a precursor to acquiring a job and start seeing it as an integral yet ever-changing component of work. They need to stop thinking of skills as consumable commodities and start thinking of them as shared sources of value for companies and workers. They need to stop fearing the inherent ambiguity around what a skill is, who owns it, and how it is developed, and start embracing it to drive upskilling solutions that improve business results and workers’ lives.
Workforce intermediaries offer a broad array of support services to leaders for both reframing their skill mindsets and producing mutual gains for companies and workers through enhanced business performance and greater worker mobility. These institutions can not only help companies shore up present-day skill shortages but also — and perhaps most important — help them create the foundation for cultivating the skills they will need to prosper tomorrow.
1. K. Rogers, “Manufacturing Is Facing a Growing Skills Gap That Is Leaving Hundreds of Thousands of Positions Open,” CNBC, Oct. 4, 2019, www.cnbc.com.
2. S. Agrawal, A. De Smet, P. Poplawski, et al., “Beyond Hiring: How Companies Are Reskilling to Address Talent Gaps,” McKinsey & Co., Feb. 12, 2020, www.mckinsey.com.
3. R. Jain, N. Lowe, G. Schrock, et al., “Genesis at Work: Evaluating the Effects of Manufacturing Extension on Business Success and Job Quality,” Aspen Institute, Dec. 18, 2019, www.aspeninstitute.org.
4. I. Rademacher, M. Conway, and M. Bear, “Project Quest: A Case Study of a Sectoral Employment Development Approach,” Aspen Institute, Aug. 1, 2001, www.aspeninstitute.org; and N. Schwartz, “Job Training Can Change Lives. See How San Antonio Does It,” The New York Times, Aug. 19, 2019, www.nytimes.com.
5. A Registered Apprentice program meets the requirements of the U.S. Department of Labor; see www.apprenticeship.gov.
6. “Apprenticeship Resources and Data,” Wisconsin Department of Workforce Development, accessed Jan. 27, 2021, https://dwd.wisconsin.gov.
7. A. Forbes, “A Measure of Interdependence: Skill in the Supply Chain,” Economic Development Quarterly 32, no. 4 (November 2018): 326-340.