By Anthony Bieda, Founding Partner at Transformation Collaborative

Three of the most confounding – and dangerous – contemporary issues undermining the nation’s economy are accelerated inflation, a widening gap in the available supply of qualified employees for open jobs, and flat or diminished participation in post-secondary education, including traditional degree-oriented college programs. The persistence of inflation suppresses consumer demand and indirectly stifles capital investment in necessary buildings, equipment and technology. Diminished access to qualified employees constrains the productivity of wealth-generating enterprises, forcing them to forego sales and revenue that could otherwise support an expanded employee base and broader supplier network, including small business vendors.

Finally, weak demand for traditional forms of post-secondary education characterizes an emerging post-pandemic generation that in other eras would be just entering the most productive (and challenging) periods of their lives. Remaining on the sidelines deprives the economy of more than their labor; it also curtails access to that population’s creativity, energy and capacity for innovation.

Combining the three economic maladies of higher costs, lower productivity and off-line human capital represents a perfect storm, but also reflects a nexus of opportunity. Consumers, business owners, suppliers and those who develop human capital – as well as public policy makers and their advisers – now have the pretense if not mandate to collaborate across sectors and coordinate deliberate initiatives to mitigate these issues.

For those in the business of developing human capital, the luxury of steadfastly offering only traditional degree-granting programs becomes more expensive with each new cohort start. Attracting enrollment for an endeavor with a dubious price/value proposition has never been more difficult; the wiser among us assume the task will be harder before it is easier, if ever.

Assuming a willingness for post-secondary education (PSE) leaders to reach out to employers, the business community, consumers and policy makers in pursuit of lower inflation and better workforce participation, what would an institution of post-secondary learning have to offer? Among many considerations, the PSE school might offer a deeper understanding of the population in question, its quirks, preferences, aspirations and anxieties.

Taking a longer view than just the pandemic biennial, P. Winfree & R. Greszler (WSJ, 6.21.2022) reviewed and analyzed data that shows “…the share of adults working or looking for work has been generally falling for the past 20 years.” While the retirement surge of the baby boomer generation explains some of the “not working” phenomenon, the authors emphasize that young men between the ages of 25 and 54 are less likely to work today than in previous generations. So, attributing that trend to two years of Covid misses the big picture.

One salient impact of the pandemic on workforce participation, however, was that while between 2010 and 2020, “younger people were becoming more likely to participate in the labor market” but in 2022, that trend reversed course. The authors elaborate: “While total employment is down 0.28% since the start of the pandemic, employment among 20- to 24-year-olds is down 3.7%.”

More importantly for PSE, the authors found that enrollment fell by 5% for the same segment of the population during the pandemic. That indicator has implications beyond admissions targets and enrollment campaigns; it merits discussion and mitigation across the business community, the policy community and the human development ecosystem.

In addition, PSE schools should become more conversant about the nexus of issues and relevant objective measures that must be accessed, monitored and applied in real time. Beyond trends in PSE admissions, the morphing nature of the workforce merits strong scrutiny.

Where did employment grow the most during the pandemic? According to Winfree & Greszler, it grew the most for parents with young children. Many of those most invested in acquiring better job skills and greater access to economic opportunity are interested in economic sectors with high growth, not necessarily those most desired by previous generations or sub-populations. A question comes to mind: are employers and those who prepare individuals for employment dialed in to these preferences? If so, is that sub-market sufficiently large to sustain or grow a nimble PSE enterprise?

Winfree & Greszler offer appropriate respect to major employers who have taken matters into their own hands to remedy the persistent lack of eligible and qualified workers. They cite the leadership and growing participation by private employers in developing the next generations of associates and employees. Those with private in-house training programs and apprenticeships include Mazda Toyota Mfg. and Bank of America. Going a step further, Google, Amazon, and IBM offer in-house certificate programs to new employees looking to qualify for careers and economic opportunity.

Expanding industry certification programs and employer-sponsored apprenticeships to address gaps in the workforce, the authors cite some astounding insights derived from Department of Labor data:

·         The number of occupations commonly filled through employer-sponsored apprenticeship programs could nearly triple (to 74 from 27)

·         The number of job openings filled through apprenticeships could expand eightfold (to 3.2 million)

·         Occupations most likely to benefit from apprenticeship expansion would offer 20% higher wages

Not more than two years before the pandemic, the U.S. Department of Labor was encouraged to launch Industry-Recognized Apprenticeship Programs, aka IRAP, which created a new pathway for more flexible, industry-driven alternatives:

“This quickly led to more than 130 new apprenticeship programs predominantly in high-demand fields with worker shortages, but IRAP has been canceled,” note the authors. (https://www.apprenticeship.gov/employers/industry-recognized-apprenticeship-program)

Dialogue with public policy makers, therefore, must include the willingness of PSE leaders to transform their institutions into seamless support systems for employer-driven apprenticeships. PSE voices must become more articulate about the life-long learning ethic of practical, skills-based education and training. After apprentices become new employees, many new employees become supervisors and managers; then the demand for more degree-focused programs is captured by those institutions with existing relationships, employer-based as well as employee-based.

The future of apprenticeships in the U.S. is worthy of sustained attention and discourse among the PSE sectors. As organizations such as the Urban Institute develop occupational frameworks and related technical instruction outlines for new occupations, colleges interested in participating would do well to develop curricula whose scope, sequence and content align with new, related technical instruction outlines that will be published in a few years. (https://www.urban.org/policy-centers/center-labor-human-services-and-population)

The nexus of inflation, skills-gap persistence and weak PSE enrollment demand provides an important opportunity for career education entrepreneurs with dynamic, nimble and customer-centric enterprises to participate in the recovery of economic vitality. As the shakeout of the higher education sector continues, there is a critical role for PSE institutions to play. But only if there is broad transformation, leading to a sophisticated, sustained collaboration with employers, prospective employees and prospective students.

Contact Wallace K. Pond or Anthony S. Bieda at the Transformation Collaborative to take the first steps towards a contemporary, relevant transformation.