The modern economy is in a continuous state of evolution as demographic shifts, changing economic conditions and technological innovations carve out new jobs while making others obsolete. To be competitive in the labor market today, workers must be able to demonstrate that they possess the fundamental academic skills, technical competencies and soft skills employers value. However, many economists are concerned that these fundamental changes in the economy create a widening mismatch between the skills workers possess and those employers demand.
Over the next decade, the U.S. economy will experience a significant increase in high-skill jobs, while many low-skilled positions will cease to exist. The U.S. Bureau of Labor Statistics projects that the sectors that will experience the largest employment growth are health care and social assistance, professional and business services, educational services and leisure and hospitality. In contrast, manufacturing, office and administrative support and sales are expected to lose the most jobs. Similarly, the Center on Education and the Workforce at Georgetown University estimates that more than 70% of new job openings today require postsecondary education or vocational training beyond high school. They argue that the fastest-growing occupations over the medium term will be in areas that require a high level of postsecondary education and training.
However, the U.S. higher education system is faced with many issues that may hinder the production of skills that will be needed. This includes declining enrollment in high-priority ar- eas such as science, technology, engineering and mathematics (STEM), a sizable achievement gap across race, rising tuition, low persistence and an inadequate graduation rate at this level. For instance, the National Center for Education Statistics notes that only 62% of the students who are enrolled in a four-year bachelor’s degree program typically complete it within six years. Similarly, in recent years, almost 50% of the students who enter a STEM bachelor’s degree program either change their major or exit college without a degree within six years. Policymakers must immediately confront these issues and create multiple pathways for students to acquire the skills they will need in the future.
In addition to the usual education and technical skills requirements, it is now typical for employers to advertise that potential applicants must also possess several soft skills in order to be selected for a position. These include communication and people skills, various character or personality traits and a certain degree of social and emotional intelligence. For example, at the time of writing this article, a quick search of Indeed.com showed that in the Fort Myers area, a significant share of recent job postings explicitly stated that their ideal applicant must demonstrate good communication skills (48%) and interpersonal skills (10%), and be self-motivated (16%), a team player (11%) and goal-oriented (7%). A recent study by Hart Research Associates suggests that employers believe soft skills are important and weigh these skills heavily in their hiring decisions. However, while new college graduates tend to believe they have mastered these skills, the study revealed that employers generally disagree with this assessment.
This is an important issue for all stakeholders in our economy because the warning signs are flashing red. Research from ManpowerGroup shows that many U.S. employers are struggling to fill key positions, and more than half of all companies globally are facing difficulties attracting and retaining skilled workers. For the U.S. to maintain its place in the world, swift actions must be taken to address the deficiencies in our higher education system and better facilitate soft skills development.
Nicholas Wright, Ph.D., is an assistant professor in the Department of Economics and Finance in the Lutgert College of Business at Florida Gulf Coast University.