The McKinsey Global Institute (MGI), a business and economics research association, recently published a study on job creation that outlines what can be expected in terms of employment in the coming decade, as well as what both the public and private sectors can do to spur job creation. Some of their findings are truly staggering:
- The United States has seen a decline of 7 million jobs since 2007
- The projected length of a “jobless recovery” is 60 months
- 1 in 10 Americans move annually, compared with 1 in 5 in 1985
- 20 percent of America’s adult male population is not working
- There will be an estimated shortage of 1.5 million college graduate in the workforce in 2020
- 40 percent of companies planning to hire have had openings for 6 months
- The rate of new business creation has dropped by 23 percent since 2007
- 21 million new jobs are needed by 2020 to return the United States to full employment
MGI reports that low job growth could result in as few as 9.3 million new jobs by 2020. However, with the right business strategies and government support, it is possible to create 22.5 million jobs by the 2020 benchmark, returning unemployment to 5 percent.
The six sectors with the greatest potential for job growth are health care, business services, leisure and hospitality, construction, manufacturing and retail. Despite even the most optimistic projections of job growth in these fields, it’s important to acknowledge the shortage of Americans trained to work as nutritionists, welders and nurse’s aides, and the predicted shortfall of computer specialists and engineers.
In explaining the statistics, MGI notes that:
“[t]here is no national system for conveying the needs of employers for applicants with specific credentials… to employment services or directly to young workers entering the labor market from community colleges and technical schools,” and that most jobs lack “nationally recognized training or skill standards.”
Additionally, today’s workers are often unable to work full time, as many need to care for young children, older children who need financial support, and aging parents. The aging population, along with increased home ownership and dual-career families, also means that many individuals are unable or unwilling to move for a new job.
But there is a solution.
Discussing this study at The Atlantic’s New Work Era Summit on July 19, Byron Auguste, Director, Social Sector Office at McKinsey & Co. said,
“I’m actually pretty optimistic about our ability to create these jobs.”
MGI cites three promising trends infiltrating the workforce: disaggregation, virtualization and flexible supply. Disaggregation, the breaking down of a complex job into simple tasks, combined with advances in communication technology and a recent tendency for employers to favor hiring workers on a part-time or short-term basis, can result in a greater hiring capacity and a more resilient workforce.
MGI suggests that business leaders increase their involvement in influencing policies that link education with employment needs. Some of our corporate partners, such as KPMG, Verizon and Bison Gear and Engineering Corp, have already taken initiative by engaging in Learn and Earn partnerships with postsecondary education institutions to develop curricula that directly relate to the specific skills their fields of work require.
In short, the study suggests there are three major strategies businesses can utilize to combat the challenges posed by the low supply of highly-trained workers, and the changing demographics of the workforce:
- Increase the number of remote jobs to accommodate workers who are aging, homeowners, or who come from dual-career families and are therefore less likely to move for a job
- Increase the number of temporary and part time jobs to accommodate workers with growing familial responsibilities
- Provide specialized training to both new and incumbent workers to ensure that today’s demand for highly skilled workers can be met.
Corporate Voices’ partner companies are already leading the way in implementing some of the strategies outlined by MGI. Through progressive workplace flexibility programs and practices, our partner companies recognize the positive business impacts of flexibility, and how it can modernize workplaces to help working families balance the dual demands of work and life. Through Corporate Voices’ national workplace flexibility campaign, best-practice companies have committed their support for flexibility as a smart business practice, and are encouraging their peers to expand flexibility within the business community.
Through innovative Learn and Earn programs, our corporate partners are creating meaningful partnerships with higher education institutions to provide educational and work-life supports so people can complete their postsecondary education. This is especially important at a time when a majority of the jobs of the future will require at least some postsecondary education. Gaining credentials with labor market value will not only make workers more competitive in the labor market, it will give them meaningful career opportunities and a path toward upward social mobility.
The results that these initiatives have generated provide hope for even the most optimistic employment scenario between now and 2020.
Hannah Furgang is an intern with Corporate Voices for Working Families