Listen to These CEOs: Skills Trump Degrees

April 1, 2019

 

A simple internet search will reveal a plethora of articles, reports and studies on the future of work, suggesting that a full-scale revolution in our working lives is on the horizon.

 

The consensus is that disruptive changes brought on by rapid advances in digital technology are creating skill gaps in the workforce here in the United States and worldwide.

 

You may have read that the most in-demand occupations did not exist 10 years ago, which is probably true. Indeed, the World Economic Development Forum says that 65 percent of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.

 

Into the Lifeboat

 

Some shudder at the thought of having “missed the boat” in terms of keeping up with all this technological change. Nobody, but nobody, can fully keep up. If there is any solace here, it’s the fact that the boat is constantly being built around us. You climb into this lifeboat by learning new skills.

 

That is not to say that it is easy. This past weekend, I’ve been struggling to learn a new software that was introduced to me by a friend. I’m not sure if I should thank or condemn her at this point. If I become proficient with it (and the jury is still out on that), I will have upskilled myself, which a good thing. I may have to take an online class to get there.

 

What we know, what some employers are shouting from the rooftops, is that skills matter in this Fourth Industrial Revolution that we find ourselves in. I think we also sense that something is not right when there are 7.3 million unfilled jobs in the U.S, which exceed the number of people unemployed.

 

What Some CEOs are Saying

 

The experts attribute this skills gap in part to declining birthrates, an education system that hasn’t produced workers with some of the most sought-after skills and the quickening pace of digitization in the workplace. All of this is no doubt true.

 

Experts aside, I take stock into what some of our nation’s top CEOs are saying. In short, they believe the future of work will not be so much about college degrees but rather job skills. They also believe the corporate community must become more involved in fixing what is essentially a broken education system.

 

"We have a chance to employ so many more people - and not always with a college degree, a less than a four-year degree will get a very good paying job in the new economy," said IBM Chief Executive Ginni Rometty at the World Economic Forum in January.

 

“Our company was founded by a college dropout, so we’ve always had a view that it was skills that mattered. In fact, almost 50 perent of the people we hired last year in the United States do not have a four-year degree,” said Apple CEO Tim Cook during a recent meeting of the American Workforce Policy Advisory Board at the White House.

 

Improving Economic Mobility

 

JPMorgan Chase recently unveiled plans to commit $350 million to improve worker skills and develop new training programs. The The company’s New Skills at Work initiative is designed to prop up under-served communities and community colleges to improve economic mobility for those who may not have a four-year degree.

 

"The new world of work is about skills, not necessarily degrees. Unfortunately, too many people are stuck in low-skill jobs that have no future, and too many businesses cannot find the skilled workers they need. We must remove the stigma of a community college and career education, look for opportunities to upskill or reskill workers, and give those who have been left behind the chance to compete for well-paying careers today and tomorrow," said JP Morgan Chase CEO Jamie Dimon.

 

 “We stopped giving money to colleges a long time ago. Harvard, Princeton [are] not philanthropy.”

 

These CEOs, far from being socialists but captains of capitalism, also openly worry that this new digital/artificial intelligence age that we are entering is fast creating a bifurcated society, in which entire groups of people are being left behind.

 

Said IBM CEO Rometty: “I think we’re at deep risk of having a very divisive ‘have and have not’ era out here that’s not inclusive and if we’re going to make this era of both economic growth and technology prosperity inclusive -- we have to do something so that the many, not the few get to participate in this world.”

 

"Forty percent of American people make less than $15 per hour; 40 percent of Americans can't afford a $400 bill whether medical or fixing their car, or something like that; 15 percent of Americans make minimum wages; 70,000 die from opioids; and, inner-city schools ... that's where 50 percent aren't graduating,” said Dimon.

 

A Company Builds Its Workforce

 

When Siemens decided to open a gas turbine plant in Charlotte, N.C., back in 2011, it soon discovered that it wasn’t finding enough people with the right skills to fill 1,500 new jobs, despite the fact that there were more than 10,000 applicants. The company decided to build the workforce that it wanted by paying people to learn new skills at Central Piedmont Community College.

 

“What we really need for today’s manufacturing environment is what we’re calling middle skills, a combination of those hands-on traditional trades along with some higher-level school learning,”  said Barbara Humpton, CEO of Siemens USA.

 

“And so what we did in Charlotte was team up with the community college and they created a course called “Mechatronics,” and it gave people who were accepted into this apprenticeship program the opportunity to—unbelievably—be paid while they’re going to school, be paid while they’re working and then ultimately graduate from an apprenticeship program with full-time jobs that pay well — and no debt.”

 

The Mismatch

 

If you parse through the words of these CEOs, it is clear that they are saying that skills trump degrees. Are their views representative of most CEOs? I do not know, but they are saying points to an underlying problem -- that four-year traditional colleges impart directly employable skills to only a small portion of their students (such as engineering and accounting majors), leaving employers in a bit of a lurch.

 

This “mismatch,” as the Apple CEO Cook calls it, is one reason why I believe you will see more and more CEOs becoming advocates for community colleges and trade schools as an alternative to traditional four-year colleges. Cook takes it one step further by suggesting that every kid in the U.S. should have some level of coding education before they graduate high school.

 

Apple launched its Everyone Can Code program in 2016, a curriculum designed to help students from Kindergarten to college learn coding. There are 4,000 schools and 80 community colleges now using Apple's curriculum.

 

Dimon talks about the stigma of community colleges, trade schools, and vocational training, and he is exactly right. The truth is that many jobs now require specialized training in technology that Bachelor’s programs simply fail to address.

 

“Skills, not college pedigree, will be what matters for the future workforce – so while we should make sure college is affordable, we should also make sure higher education is still worth the cost, or revisit it entirely and leverage more progressive approaches to skills training,” wrote Stephane Kasriel, the founder and CEO of Upwork.

 

Rapid technological change, combined with rising education costs, is making our traditional four-year college system an increasingly anachronistic and risky path. More and more young people are instead opting in favor of trade schools and community colleges. That will be the subject of my next blog, so stay tuned.

 

I’ll see you down the road.

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