The future U.S. workforce is here.  The alarm bells are ringing: our future workers are woefully ill-prepared for the demands of today’s (and tomorrow’s) workplace.  That is the ominous message from the recently released landmark survey of over 430 employers sponsored by The Conference Board, Corporate Voices for Working Families, the Partnership for 21st Century Skills, and the Society for Human Resource Management.

We used to live in a world where value came from things that were mined.  In the old economy, the U.S. manufactured things.  We used to measure success by the standard: whoever produces the most “toys” wins.  We used to measure hard work with calluses.

Today we live in the lite economy. We measure outcomes with brain power.  Economic value comes from our mind.  That puts the U.S. is in a race for IQ points. The countries that accumulate the most IQ points will win.

In the race for IQ points, the kinds of jobs we create are different.  Since 1990, the number of these jobs have been reduced by innovation, technology and outsourcing.

Timber – -32%

Farm workers – – 20%

Sewing – – 50%

TypeSetters – – 62%

During the same time, the demand for these careers has increased by the following percentages:

Electrical Engineers – -+28%

Medical Sciences – -+33%

Architects – + 44%

Legal Assistants – + 66%

Financial Services – + 78%

What skills are necessary for success in the workplace of the 21st century? Young people need a range of skills, both basic academic skills as well as the ability to apply these skills and knowledge in the workplace. The recently released survey titled “Are They Really Ready to Work?” indicates that far too many young people are inadequately prepared to be successful in the workplace. It’s extremely perilous at the high school level, where well over one-half of new entrants are deficiently prepared in the most important skills:

Oral and Written Communications

Professionalism/Work Ethic

Critical Thinking/Problem Solving.

College graduates fared a bit better, with lower levels of deficiency on the most important skills, but too few excelled. Only about one-quarter of four-year college graduates are perceived to be excellent in many of the most important skills, and more than one-quarter of four-year college graduates are perceived to be deficiently prepared in Written Communications.

How can the United States continue to compete in a global economy if the entering workforce is made up of high school graduates who lack the skills they need, and of college graduates who are mostly “adequate” rather than “excellent”?

The survey differentiated between applied skills, those skills that enable new entrants to use the basic knowledge they have acquired in school to perform in the workplace, and basic knowledge, such as reading comprehension, written communication, and mathematics.   For the most part, basic skills satisfy the requirements identified by the No Child Left Behind Act of 2001.  Applied skills raise the stakes to include cognitive, social and behavioral skills.

Employers expect young people to arrive in the workplace with a set of basic and  applied skills.  Based on what employers said, applied skills on all educational levels trumped basic knowledge and skills.   In other words, while the “three Rs” are still fundamental to any new workforce entrant’s ability to do the job, employers emphasize that applied skills like Teamwork/Collaboration and Critical Thinking are “very important” to success at work.

It is crystal clear from the survey’s Workforce Readiness Report Card that reality is not matching expectations. Over forty percent of high school graduates failed the grade and less than half barely received a passing grade.  The report card for new entrants with a high school diploma does not have a single item in the Excellence List. All 10 skills that a majority of employer respondents rate as “very important” to workforce success are on the Deficiency List.

For two-year college-educated entrants, only one “very important” applied skill—Information Technology Application—appears on the Excellence List while eight skills appear on the Deficiency List.

As a result, employers are growing increasingly frustrated over the lack of skills they see in new workforce entrants. And that’s just today: the skills employers view as “very important” now will be changing within the next five years.

Knowledge of Foreign Languages will “increase in importance,” more than any other basic skill, according to over 60 percent (63.3 percent) of the employer respondents.

Creativity/Innovation is projected to “increase in importance” for future workforce entrants, according to more than 70 percent (73.6 percent) of employer respondents. Currently, however, more than half of employer respondents (54.2 percent) report new workforce entrants with a high school diploma to be “deficient” in this skill set, and relatively few consider two-year and four-year college-educated entrants to be “excellent” (4.1 percent and 21.5 percent).

Global competitiveness is getting fiercer as the costs of transportation and electronic communication continue to fall. The link between having the highest quality workforce and staying competitive in the new global arena is undeniable.  The challenge to find qualified workers is only increasing.  To the survivors will go the spoils.

Sidebar #1

What are employers doing to screen or test candidates?

Most seem to be hiring these workers anyway. When asked if recent high school or college applicants are tested or screened, 44.8 percent of employer respondents say they test or otherwise screen recent high school and college graduate applicants to determine proficiency in some specific basic knowledge/skills (i.e., Math, Reading, Writing, Spoken English, or Other).  But what happens if the testing reveals deficiencies?  Over thirty-nine percent report they do not hire the applicant, while 58.1 percent report they “sometimes” hire the applicant, and 2.7 percent say they hire the applicant.

Sidebar #2

Applied skills dominate rankings of knowledge and skills expected to increase significantly in importance over next five years.

1 Critical Thinking/Problem Solving . . .

2 Information Technology Application

3 Teamwork/Collaboration

4 Creativity/Innovation

5 Diversity

6 Leadership

Previously published in Business2Business, November 2006