Economic news has been good for a while and, by all accounts, the recovery of our economy from the Great Recession continues, albeit slowly.
With recovery comes growth and with growth comes a need for the workers to support it. That’s our current problem. With Ohio recently reporting a 4.4 percent unemployment rate, the gap in skilled workers is even more evident.
The CEO of a large employer in Northeast Ohio recently noted that even though the company gets more than 15,000 applications from job seekers each year, he still has 3,000 openings. How can that be with hundreds of thousands of Ohioans looking for work?
A problem of definition?
Could it be just in the way we are defining what we need? If a simple change in the way you look at what’s required for a job could increase the individuals eligible for your open jobs from 1 to 33 percent, would it interest you?
That’s what two pilot projects in Summit and Cuyahoga counties are examining now. Work is focusing on “skills-based hiring.” Research and experience in New Mexico by a group called Innovate+Educate has helped redefine how employers specify what they need. Researchers found that by breaking jobs down into the hard skills required and testing for those skills, they could increase the potential fit between an employer’s actual needs and an individual’s skills. The results have been exceptional.
The problem is that employers are looking for educational degrees instead of seeking candidates that can demonstrate required skills. Yet, years of education has been shown to be an insignificant predictor of future job performance and five times less predictive than ability testing.
But where skills don’t exist at the right level, they may be quickly attained. The work in this area by ACT (yes, the test people), has found that more than 16,000 jobs can be defined in terms of from three to six skills: applied math, reading, information, observation, listening and writing. These skills can be trained. Experience in California with this approach shows that with about 200 hours of applied training, skill levels can be increased from entry level job requirements to white collar job requirements.
The challenge: Think differently
The challenge for employers is to begin to think differently about how we define job requirements. Job profiling by employers and skill testing for job candidates are the building blocks of this work. A shift to skills-based hiring is showing immediate results for employers with from 25 to 75 percent reductions in turnover, 40 to 70 percent reductions in time-to-hire, 70 percent reductions in cost to hire and 50 percent reductions in time to train.
This compelling work is worth looking at for your company. You can find more about the research and early results at www.innovate-educate.org or you can contact me.
Yes, workers have to do their part to “skill up.” And, as employers we need to better define our specific needs to do our part to close “The Gap.”
Steve Millard is president and executive director of the Council of Smaller Enterprises. For the last 15 years, he has guided COSE’s work to support the success of small business owners and act as a nonpartisan advocate and resource for their needs on the state and national levels. Visit www.cose.org.
