July | August 2017





Workforce Needs are Changing Quickly, and so Must Higher Education

By Jennifer Ginn, CSG Associate Editor
Does America have a skills gap problem, where students don’t have the particular skills employers need to fill the jobs they have? Your answer to that could depend on whether you are talking to an economist or somebody in higher education.
Either way, they both agree there is work to be done to get students prepared for the modern workplace.
Kevin Hollenbeck, vice president and senior economist at the Upjohn Institute for Employment Research, doesn’t believe a skills gap exists. He was one of the featured speakers at a workforce development session at the Midwestern Legislative Conference’s recent annual meeting in St. Paul, Minn.
“The law of economics has not been repealed,” he said. “If there were excess demand in employment, we would be seeing wages go up. There’s almost no evidence of wages going up anywhere. … There’s undoubtedly a skills gap in certain sectors like health care. … (But) studies suggest if the skills gap was totally done away with and we could match every vacancy (with a worker), the drop in the unemployment rate would be about one point.”
Mary Rothchild, director of strategic partnerships and workforce development for the Minnesota State Colleges and Universities System, disagrees.
In 2012, Chancellor Steven Rosenstone began a workforce alignment initiative to make sure higher education in Minnesota was producing the types of employees companies in the state needed. Rothchild said college faculty had 55 meetings in 2012; those meetings included 1,400 participants from nine industry sectors across the state.
Rothchild said employers told the college system many jobs were available for qualified candidates. The employers even helped the university system identify which professions are high growth and high demand areas.
“In these cluster areas,” she said, “we’re starting to focus our educational programming. Since we’ve done this study, … we’re starting new programs in manufacturing, health care and new technical fields. That’s been a very tangible result we’ve undertaken in connection to this research.”
Hollenbeck said although certain skills may be in demand, employers are mostly having trouble filling those positions because they are unwilling to train new employees or pay the type of salary these highly skilled workers can demand.
“I think more training and some kind of wage increase will solve the skills gap,” he said.
Toby Madden, regional economist for the Federal Reserve Bank of Minneapolis, said the problem is that the workplace and what it requires is changing rapidly, while it takes time for people to develop new skills.
“Where are the demands happening and let’s try to supply those and get those skills readily available so the marketplace can absorb them,” Madden said. “I would argue that the success of the United States economy is that we do adapt to those changes in the marketplace. We are highly productive and we reap those benefits through a higher standard of living.”
Rothchild agreed that higher education must keep changing to meet the rapid changes in the workforce.
“The challenge in higher education has been to adapt our curriculum and our course design to meet the upcoming challenges of the next generation of learners,” she said. “While it may not be a skills gap in the labor market per se, I do think it’s incumbent on higher education to be adept and adroit in understanding the future of the labor market.”

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