Unfortunately this link between education and jobs seems to be breaking down.
McKinsey just published a groundbreaking study of the impact of education on employment ("Education to Employment"), and it demonstrates the challenging mismatch between our educational system and the job skills employers need.
It demonstrates the tremendous need for skills in the workforce, and points out many gaps in the educational system's ability to drive these skills.
(Makes me wonder if we need to rethink the purpose of education in general, frankly.)
Let me highlight a few of the key findings.
1. The paradox of high unemployment and a war for talent continues.
We don't have a jobs crisis in the world, we have a skills crisis. Some clear evidence from this report.
- 45% of US employers say lack of skills is the "main reason" for entry-level vacancies
- Only 42% of worldwide employers believe new graduates are adequately prepared for work.
This data echoes the data we hear regularly from clients. Companies need to invest heavily in internal development programs to stay competitive. Our research shows that the training industry grew by 12% this year, the highest level in 9 years.
This research also shows that employers would be willing to pay new workers 22% higher salaries if they did have the skills they need. Employers want "ready made" employees.
2. Worldwide educational institutions are out of sync with employer needs.
While 42% of employers believe newly educated workers are ready for work, 72% of educational institutions do. This is an enormous mis-match. Primary and secondary educational institutions are not keeping in touch with corporate recruiters and the needs of business.
Again our research validates this completely. Most of our clients are investing heavily in new corporate universities, onboarding programs, and what we call "continuous learning" programs. In fact the L&D industry is in the middle of a renaissance, as companies try to reinvent all types of training around new internet technologies.
3. Students don't perceive that traditional education methods drive job skills.
The #1 cited way (60%) students believe they learn skills is through "on the job training." (Our reserach shows that 72% of business managers say the same thing.) 58% cite that "hands-on learning" is best.
Lectures are the lowest rated learning method (30%) tied with "traditional online learning" (30%).
Unfortunately most colleges still rely heavily on lectures and the "for-profit" distance learning institutions rely heavily on "traditional online learning." (Only 24% of academic program graduates say that they use hands-on learning in their program.)
Again our research validates this completely. Corporate L&D managers blend lectures with a wide variety of informal learning techniques, and today corporations spend less than 60% of all their training budgets on instructor led training.
4. While vocational education appears to be a good solution, it has low or lesser perceived value among students.
This was a fascinating finding, which I think gets to the ultimate point. The research compared student "perceptions of value" between traditional education and vocational education and apprentice programs. In the research every country values traditional education over vocational education except for Germany, where 49% of respondents say academic education is more valuable.
Germany, of course, is a country filled with apprentice-based programs and has among the lowest unemployment rate in Europe.
Unfortunately, vocational programs are not always the answer either. 23% of students who attended vocational programs felt they attended the wrong institution and 42% are unsure they took the right program.
5. Students have a weak understanding of the skills and degrees which will best help them find a job.
The study also points out that most students are not sure "what educational program" will help them find a good job. In fact the study finds a whole segment of students who have "given up" on their ability to leverage education to find a job.
In my own case, my children had very little coaching from their colleges about possible career opportunities and how to assess their aptitude for different potential careers. To me this is a systemic problem with the educational system - students need information and tools to help them see the pathway from education to employment.
Bottom Line: Skills Matter, and it's Hard to Get Them
This study which points out many important issues we talk with employers about every day.
1. Investments in training pay off big-time. Both for you as an individual and for you as an organization. So when you take a job, look for a place you can learn something. Early in your career the learning is worth far more than the salary.
2. Young workers should seek out employers and managers who believe in training people. Most of us enter the workforce with lots of book knowledge but very few working skills. Join a company that will invest in you - some will and some won't.
3. Educational institutions around the world are not keeping up with teaching styles and general skill needs of the 21st century workforce. This is a very complex problem to fix, but at least the issues are on the table. Education providers and leaders have to visit corporate recruiters and learn about the needs of business.
4. Corporate L&D and HR managers must heed this message. If you don't take the time, spend the money, or learn how to build world-class development programs, you will not be able to compete. There is no real "war for talent," there is a "war for skills" - and what better way to win the war than to build your arsenal internally.
5. The education industry itself must rethink its model. The coming technical disruptors (EdX, Udacity, and other online education providers) are experimenting with new business models. There are many reasons to get a good education, but ultimately it must provide a pathway to a promising and successful career.
More on this topic to come.
You can follow Josh Bersin to stay up to date on trends, research, and news in all areas of HR, leadership, and talent management on twitter at @josh_bersin.
