August 2014

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40 | www.cedmag.com | Construction Equipment Distribution | August 2014 Solving the Skilled Workforce Crisis Recently I was an invited panelist at a White House policy forum – The Future of Workforce Development. The Third Way, a Washington think tank, hosted this event at which Vice President Joe Biden delivered a speech on the skills needed for American workforce competitiveness. Secre- tary of Labor Thomas E. Perez then led a discussion session on developing innovative approaches to preparing workers for high-quality jobs. The Third Way will release a white paper on the panel deliberations that will include my remarks. This briefing's message was that the U.S. and world economies are suffering from a major skills-job disconnect. This growing workforce crisis requires new, broad systemic solutions developed at local levels that are adaptable to different regions across America. What has caught Washington's attention is that the declining unemployment rate has not resulted in bringing a surge of workers back into the workforce. Instead, the labor participation rate in May 2014 was 62.8 percent, a 35-year low. This is the same rate as in 1978. Evidence is mounting that technology linked to globaliza- tion and a worldwide demographic shift is leaving many workers unfit for 21st-century higher-skilled jobs. Today's seven-plus million U.S. vacant jobs bolster the contention that we are suffering from a chronic skills mismatch. The Federal Reserve's continuing focus on raising or lowering interest rates will not fix this jobless problem. Technology has systemically outpaced society's ability to keep up. Over the past 20 years, the U.S. jobs pipeline has atrophied. The rate of technical innovation has outstripped the ossified American education-to-employment system. It is now evident that many more companies across all business sectors will increasingly need to recruit workers who have higher skill levels. Such jobs require specialized skills and often extensive experience. This is the labor situation at Synchronoss Technologies, a software developer. "We could get 50 resumes for a position and two to four of those people will be brought in for interviews," said Stephen Waldis, founder and chief executive. "If we're lucky, that might yield one hire." Canada, as well, faces a nationwide shortage of candidates to fill skilled jobs, indicates Rick Van Exan, vice president of marketing at Toromont Industries and an AED officer for the Eastern Canada Region. As a Cat dealer covering Ontario and parts of Atlantic Canada, Van Exan states that a major concern of his firm is maintaining a supply of licensed mechanics. "We're getting by for the time being, but difficul- ties in getting qualified people are going to increase as major projects come on line," he says. In the Federal Reserve's "Beige Book" economic survey of May 2014, many of its regional districts reported that businesses were experiencing difficulties in filling skilled jobs, including skilled trade, manufacturing, IT, distribution, warehousing, construction, engineering, and professional services positions. Both the Federal Reserve report and a May USA Today Survey of 40 economists warned that salaries may rise across more business sectors due to increasing skilled worker shortages. Manufacturers on both sides of the Atlantic are speaking out about the consequences of skilled worker shortages. "The Accenture 2014 Manufacturing Skills and Training Study," done in collaboration with the Manufacturing Institute, reported on a survey of 300 U.S. manufacturing executives. They indicated that nearly 80 percent of their No More Old School The future of 21st century, high-skills workforce development lies in fresh thinking and collaboration between all the stakeholders of the community. Hear the author elaborate on solving the jobs disconnect at Executive Forum Sept. 18-19. BY ED GORDON (continued on page 42)

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