There are many obvious points of labor market data that are important to learning executives. But it’s the less obvious data that have significant implications for corporate learning if we connect the dots.
Here are a few data points. As of June 2017, the U.S. Department of Labor reported 4.3 percent unemployment, a low figure that shows the country approaching full employment.
There were 6 million unfilled jobs, a record high reflecting a fundamental skills mismatch. Over 95 percent of the new jobs created since the 2008 financial crisis were filled by candidates with some level of post-secondary education.
The average lifetime return on a $30,000 investment for an individual with some college credit to complete that degree is 2,300 percent. You read that right: The return is over 2,000 percent. This should answer the question of whether a college degree is worth it.
These are all important facts about the present. But if you want your head to really spin, take a glimpse at what is coming in the world of robots and artificial intelligence. Read “The Second Machine Age” by MIT professors Erik Brynjolfsson and Andrew McAfee. But I digress. We are more than amply challenged by the data of the here and now.
In a recent column, I argued learning is no longer merely a cost center but rather a strategic asset. That same perspective is borne out in this data. So what does that data say? The facts scream one core message: scarcity. There is a shortage in the supply of key talent.
Many companies have built their hiring process on a just-in-time supply chain model. While that approach is tempting, it is in fact dangerous. A just-in-time strategy requires a predictable supply chain and an ample supply quantity to be able to respond to peak demands as they occur. Neither of these conditions exists in U.S. labor markets today.
So what does this have to do with corporate learning? Nothing is more critical to the mission of the organization than the role of learning. The learning function develops the expertise and capabilities of the organization’s talent pool. Learning creates supply.
So let’s connect the dots in the economic data. Take the first dot: the 4.3 percent unemployment rate. What is the likelihood that any significant number of those 90 million people not in the labor force have the experience and the skills required to fill critical positions in your organization? If they were qualified there would not be 6 million unfilled positions left vacant for want of qualified candidates.
So, if there’s not enough supply in the talent supply chain, what can we do about it? Here’s a radical idea. Increase learning and development opportunities to make sure the supply in the supply chain has the skills and experience needed by the enterprise today and tomorrow. The corporate learning function builds the inventory in the talent supply chain.
The second dot involves the number of new positions created since the financial crisis of 2008. According to that data, 95 percent of those jobs require a post-secondary education, considerably greater than the previous forecast of 65 percent. What are the implications for learning and development? Grow your own talent.
Finally, let’s go to the third dot: the potential return on investment that goes to individuals who invest in college degrees. The critical piece for companies is what it implies about adding value. The market is determining that the value created by going from partial college credit to a full degree represents a 2,300 percent lifetime return on a $30,000 investment.
The way to think about it from the firm’s perspective is to view a $30,000 investment in an employee’s college degree, perhaps in the form of tuition reimbursement, as a company down payment on the value the market tells us is created from this incremental development. Besides, what better way for learning and development to be a proactive contributor to the expansion of the human capital of the firm’s talent supply chain?
Now that the dots are connected, the picture is clear. To me, it looks like a unique opportunity for the learning function to make a big contribution to the value of the enterprise.
Michael E. Echols is principal and founder of Human Capital LLC and author of “Your Future is Calling.” Comment below or email editor@CLOmedia.com.