Mind the gap: assessing
the skills and talent
separation in the
United States

The “skills gap,” when there are not enough skilled workers in the labor force to fill job openings, is becoming an increasing concern by employers and economists alike. There are multiple explanations for this disconnect, including 1) jobs are shifting to higher tech faster than the workforce is acquiring applicable skills and 2) the strong economy allows companies to be more stringent about their hiring practices. Though the causes are debatable, unfilled jobs and misaligned skill sets ultimately impact an organization’s productivity.

Analysis

To assess the skills gap, Figure 1 compares the unemployment rate and job postings by educational requirements over time. Generally, as unemployment drops, job postings rise. However, this graph highlights the widening disconnect between job postings that require a bachelor’s degree and postings that require a high school diploma. While jobs are increasing in both categories, the gap between attainment levels has tripled since 2016. In August 2016, there is a gap of 200,000+ postings jumping to 700,000+ by May of 2019. This indicates an increasing need for people with a bachelor’s degree.

The “skills gap,” when there are not enough skilled workers in the labor force to fill job openings, isbecominganincreasingconcernby employers and economists alike. There are multiple explanations for this disconnect, including 1) jobs are shifting to higher tech faster than the workforce is acquiring applicable skills and 2) the strong economy allows companies to be more stringent about their hiring practices. Though the causes are debatable, unfilled jobs and misaligned skill sets ultimately impact an organization’s productivity.

Analysis

To assess the skills gap, Figure 1 compares the unemployment rate and job postings by educational requirements over time. Generally, as unemployment drops, job postings rise. However, this graph highlights the widening disconnect between job postings that require a bachelor’s degree and postings that require a high school diploma. While jobs are increasing in both categories, the gap between attainment levels has tripled since 2016. In August 2016, there is a gap of 200,000+ postings jumping to 700,000+ by May of 2019. This indicates an increasing need for people with a bachelor’s degree.

A LinkedIn study found that the metro areas in Figure 2 have all been drastically impacted by a skills gap. The gray bars indicate the percentage of people over the age of 25 who have a bachelor’s degree and the red indicates the percentage of jobs requiring one. In every case, the percentage of job postings requiring a degree exceeds the share of people who possess one.

When choosing a new location, organizations should consider potential risks and mitigation strategies associated with the skills gap to ensure effective recruiting.

To understand more on this topic, contact Business Consulting. Our team is dedicated to ensuring clients achieve success in their location strategy and investment decisions.