People, Data, Finance: 3 Pillars to Solve our Workforce Gaps

by Niki DaSilva, Director of Programs and Policy, U.S. Chamber of Commerce Foundation Center for Education and Workforce

Health care. Hospitality. Manufacturing. Constructions. Childcare and education.

Each of these industries—and others—face a single problem: talent. There are too many people without jobs (or who are not earning wages that keep up with rapidly rising inflation) and there are millions of jobs employers cannot fill.

Businesses and families both feel pain.

The workforce gap is one of our country’s top challenges. If we don’t address it, our ability to strengthen our supply chain, innovate, and overcome inflation will be severely hindered. In accepting the status quo, we will continue to see overcrowded classrooms, high prices for housing and used cars, and empty shelves where infant formula should be.

The U.S. Chamber of Commerce and U.S. Chamber of Commerce Foundation launched the America Works Initiative to help stakeholders understand the scope of—and the why behind— the country’s workforce challenges and are developing solutions for employers, policymakers, educators, and investors. We believe we can fill talent gaps by rethinking the way we do workforce development in this country, using data to better match people to jobs, and making public and private investments in the right programs.

How Big Is the United States’ Workforce Gap?

Globally, more than one-third of people lost employment or faced reduced hours because of COVID-19. Some of those workers are reluctant to reenter the labor market. Younger workers in particular want greater workplace flexibility. A lack of access to childcare is exacerbating the worker shortage, making it evident childcare is a workforce issue. Other workers simply want to move into industries off the pandemic’s frontlines.

The Great Resignation is real. The United States has seen a significantly higher quit rate over the last two years. Employers are spending time and money finding, recruiting, and training talent just for that talent to walk out the door. Ninety-four percent of state and local chambers of commerce tell us businesses in their area are finding it difficult or very difficult to find workers. Every state has felt the impact. In fact, there are approximately seven U.S. workers for every 10 available jobs. Put another way, if every unemployed person in the United States found a job this week, employers would still have about 5.6 million jobs to fill next Monday morning.

Certainly, we need more workers in this country, but we also need to do a better job of keeping Americans in the workforce. Unfortunately, too many employees feel left out. They have the skills, experience, and work ethic to fill talent gaps, but find their skills are overlooked by processes that rely on college degrees and other proxies that were not built to communicate, measure, or quantify the types of talents that are important in today’s economy.

We need to understand our (lack of) people problem in a different way.

A Way to Better Understand and Address Our People Needs

Employers of all sizes and industries are competing for talent and looking for creative partnerships to build workforce pipelines and talent pools. At the same time, our traditional modes for matching and predicting employer needs— advisory boards, labor market experts—are not working. Building a workforce that meets today’s needs means hearing directly from employers. Educators as well as public and private funders need business leaders to tell them what jobs are available and what training or education is required to fill them. Developing a common language and clear way to communicate between employers and their talent partners ensures that we are no longer focused on utilizing degrees as a proxy for the skills and competencies that employers are looking for and allows them to hire for potential.

More than 2,500 employers across the country are finding that alignment by making Talent Pipeline Management® (TPM) a priority. TPM is a demand-driven, employer-led approach to closing the skills gap. Utilizing supply chain management principles, this six-strategy framework helps employers play an expanded leadership role as “end-customers” of education and workforce partnerships. The strategies support employers in developing a more data- and performance-driven approach to improving education and workforce partnerships. TPM is different because it is built on industry best practices, focused on employer return on investment (ROI), and authentically employer led. It puts employers in the driver’s seat for data collection and decision-making and activates clearer communication, shared expertise, improved leverage for getting results, and added value for smaller employers by providing needed capacity.

Talent Pipeline Management also provides immense benefits for education and workforce partners. These providers get more actionable information on employer demand, including skill and credentialing requirements, and see improved job placement and employment outcomes for learners. Workforce partners gain access to more granular labor market information, and as a result, are able to improve access to work-based learning opportunities, information on employer ROI, and performance on federal and state program metrics.

In 2018, the Kentucky Chamber Workforce Center launched a statewide workforce effort using the TPM framework as its approach. In partnership with the Kentucky Cabinet for Education and Workforce Development, the goal was to create and support at least 20 employer collaboratives (partnerships organized by employers, for employers to address shared workforce needs with management support provided through a new or existing employer-led entity) across the state within two years that could build a talent pipeline for 60 critical job types in the health care, manufacturing, construction, logistics, and business services/information technology sectors.

Statewide implementation of TPM prioritized training nearly 40 carefully selected community leaders in the TPM framework to identify areas of greatest need and to convene industry leaders at the local and regional levels. The Kentucky Chamber Foundation Workforce Center also hired a team of project managers who managed and coordinated the dayto-day operations of TPM while aligning local efforts to the state vision. The result was a grassroots effort of communities convening industry collaboratives locally with guidance and support from state partners.

In 2020, the Kentucky Chamber escalated its goals with a sharp focus on developing solutions to ensure Kentuckians are trained, developed, and upskilled in the career pathways most needed to support the state economy. That year, it also launched a partnership with the Kentucky Community and Technical College System to educate an additional 40 Kentuckians, equipping more provider partners with the skills and knowledge on implementing talent supply chain solutions from their vantage point.

To date, Building Kentucky’s Talent Pipeline has formed 40 industry collaboratives comprising more than 300 industry leaders working together to build stronger talent pipelines. The results are impressive. A couple of examples of co-designed talent solutions include:

• Partnering with postsecondary health care leaders to modernize the clinical rotation model for a stronger pipeline of registered nurses

• Connecting students to entry-level health care jobs that provide professional experience and financial support to increase the students’ prospects of graduating as registered nurses

• Collaborating with a community college to create a deck hand training program that prepares job seekers for lucrative, high-demand careers in the maritime industry

• Working with community leaders to upskill licensed practical nurses into high demand, highskilled positions to improve retention and to fill a workforce need

The Kentucky program also created a new pipeline in the equine sector. Horses are a big deal in Kentucky, but the equine industry has suffered from major labor shortages that limit growth. To address this problem, the Kentucky Equine Education Project (KEEP) partnered with the Kentucky Chamber of Commerce Foundation Workforce Center and the state Department of Corrections to explore the Thoroughbred Retirement Foundation’s (TRF) Second Chances program at Blackburn Correctional Facility as a potential source of talent.

Qualified inmates now participate in an eightmonth program on TRF’s farm at the Blackburn facility, managing a herd of more than 50 retired racehorses. In addition to building life skills, participants learn to work with the horses oneon-one and take courses focusing on equine anatomy and physiology, basic nutrition, and first aid. As employers learned more about the training at Blackburn, they have recognized the value of creating a clear pathway to employment for participants in the prison’s program.

Texas is no stranger to TPM. Houston faces a dire skills gap challenge alongside a changing industry base, an increasingly diverse population, and a fundamental shift in the regional economy as it prepares for the energy transition. The Greater Houston Partnership’s UpSkill Houston along with Houston Back on Track initiatives have led to real-time solutions to meet the demands of employers and increasing their community’s overall competitiveness by upskilling and reskilling their current and future workforce. Spearheaded by Peter Beard the Partnership’s senior vice president for regional workforce development, Upskill Houston has engaged over 130 employers in four key sectors as well as over 65 education, community and workforce organizations committed to developing the pipeline in Houston.

The work of these employer collaborative members and their partners has not gone unrewarded. By using TPM they have experienced increased enrollment in programs linked to critical jobs identified by employers, particular in underrepresented populations, along with higher completion rates, in addition to creating and communicating career advancement opportunities for existing workers such as industrial construction craft professionals and others in Houston’s key industries.

Seeking to scale the success of the Houston region, the Greater Houston Partnership and Educate Texas brought the TPM Academy to Texas, virtually. Over 30 leaders from education, chambers of commerce and economic development organizations from across the state came together over six months to strengthen their collective efforts in fueling both their communities’ and the state’s economic growth.

Using Data to Communicate Skills and How Jobs Evolve

Utilizing TPM, employers and employer-facing organizations have a consistent method of bringing business, education, and workforce partners together to better understand a region or community’s people needs. The next thing stakeholders need is data.

Data is disrupting nearly every industry for the better—except education and workforce. People struggle on paper (and, if they’re lucky, in an interview) to communicate what they know and why it is relevant. And this imperfect communication is all employers have to rely on to determine the value of an individual’s skills and experience. The country’s talent marketplace also is fragmented, preventing an individual’s record of learning from being transferred as data. If any data is collected, it’s siloed.

As a result, we have a workforce system that is slow to react and not serving anyone well. To improve the quality, value, and usability of education and workforce data, solutions must be skills-based, interoperable, and structured and include data about learning, people, and jobs.

Our T3 Innovation Network/JEDx efforts address the data problem. JEDx is a public-private approach for organizing, collecting, and using standards-based data on jobs and employment to improve government reporting (e.g., unemployment insurance wage records), support workforce analytics, and make possible verifiable employment records for hiring and determining benefit eligibility. Through better, more structured, and linked data we can transform how employers signal what is inside of a job and when it changes, and the employment outcomes in the talent marketplace.

The T3 Network is an open network of hundreds of organizations and professionals committed to building the data infrastructure necessary to make all learning count by enabling skills to function like currency. The T3 Network:

• Defines what a competency-based lifelong learner record should be so that learning counts no matter where it takes place.

• Modernizes technology and advances data standards to achieve seamless sharing of data throughout a person’s education and career pathway.

• Empowers individuals with a validated record of their skills and competencies in a way that all employers can understand.

T3 includes a resource hub to support the development of learning and employment records (LERs), which are digital records that document learning whether it occurs in the workplace, during off-site training, or even in the military. Resources include documentation on data standards that support interoperability across stakeholder systems, technical protocols for linking data to individuals, and high-level field guides that provide instructions and best practices for implementing, coordinating, and evaluating LERs. The Hub is a free resource for all stakeholders. Essentially, it is a community for sharing best practices and an iterative resource that will improve and expand over time based on stakeholder use and feedback.

Through collective action, we can unlock the potential of technology and bring about a more equitable talent marketplace. Behind all this, however? Money.

That’s why two years ago, the U.S. Chamber of Commerce Foundation, the Federal Reserve Bank of Atlanta, the Greater Houston Partnership, and WorkingNation launched Talent Finance, an initiative that reimagines how we finance the development and upskilling of workers and encourages employers and other private sector funders to lead this revolution.

Revolutionizing the Way We Finance Talent

The federal government spends about $18 billion on workforce development-related programming, but this funding has steadily declined since 2000. The federal government also finances more than $100 billion in college loans annually. Americans hold more than $1.7 trillion in student debt yet, four in 10 college students never complete a degree (attrition rates are higher for low-income and minority students). More than half of college graduates are unemployed or working in jobs that do not require a college degree.

The traditional college approach has largely separated work and learning, substantially increasing the time it takes to transition students from education to employment and making it even more difficult to respond quickly to rapidly changing skill requirements.

Employers always have been major investors in talent development, but over the last few decades there has been a decline in training investments and a shift in talent development responsibility and risk to external education and training providers and government. This strategy created cost savings for companies, but came with difficult side effects, including asking

learners to assume greater risk in financing talent development.

Employers must take the reins again, and reform our talent finance system by:

• Developing employer benchmarks and trend data on talent finance. This data must include numbers on education, training and tuition assistance programs.

• Promoting innovations in employer financing, including creating tuition reimbursement programs to pay down student loan debt for workers that stay and Skills Savings Accounts that employees can use for more flexible, skills-based training and credentialing.

• Promoting employer collaboration through initiatives, like the Talent Pipeline Management program.

• Advancing private sector innovation in financial instruments for employers and employer collaboratives that are supported by advances in how risk is assessed and managed in the talent marketplace, taking into account the new employer role and ensuring consistency with the guiding principles of fairness and equity. Income Share Agreements are one such innovation that combines an investment in upside training and credentialing while helping manage downside risks associated with employment and earnings.

• Promoting service provider business model innovation with employers and public and private investors. For example, ASU and Starbucks launched a partnership to offer Starbucks employees the opportunity to pursue their first bachelor’s degree through ASU Online, with 100% tuition coverage. The program attracts new employees and has improved retention rates with existing employees participating in the program.

Governments also must continue to finance education, training, and credentialing programs. The public sector fills gaps, particularly for people with limited attachment to employers and the labor market as well as the hard to serve and harder to employ.

In addition, governments are a powerful catalyst in promoting employer leadership and private sector innovations in talent development that can be instrumental in strengthening economic competitiveness, advancing economic opportunity, and closing the equity and opportunity gap.

Policymakers have an opportunity to:

• Work with employers to explore ways to improve the public-private balance in government incentives for talent development in ways that expand choice for workers.

• Explore alternative approaches to quality assurance that can expand choice for employers and workers in choosing talent development service providers.

• Promote the disclosure of information that assists all stakeholders to make informed and optimal decisions in the financing options for education and skills to obtain a good job.

• Work with employers to explore how more

balanced and aligned public and private finance and investment strategies — backed by stronger quality assurance approaches — can be leveraged to promote diversity, equity, and inclusion throughout the talent pipeline.

Given the challenges and opportunities the new economy brings, we need a talent finance approach fit for our time, not one built for a different economy and era. What we need is nothing less than a paradigm shift.

The Time Is Now

Solving today’s greatest challenges, whether inflation, inequality, or supply chain friction, requires that we fill today’s jobs and be prepared to fill those of tomorrow. Imagine a future where employers authentically lead in the development of workforce systems and talent pathways. If we successfully address our people, data, and investment gaps, we can create a more competitive workforce and talent development system, and build stronger businesses, communities, and families.

With business and government working together to grow our workforce, we can once again build a vibrant, prosperous nation and lead the world for years to come.

The time is now for an American workforce built for the new economy.