Are You Ready for the Talent Crunch?
How workforce development programs turn talent puddles into talent pools.
Companies anticipating a staffing shortage should band together to educate potential employees, says one workforce expert. | Reuters/Andrew Burton
Hiring isn’t easy. Employers might get hundreds — sometimes thousands — of resumes for a single open position and still, somehow, hire the wrong person. Companies working in emerging fields like artificial intelligence or robotics have far more job openings than talented people to fill them. There’s been a shortage of software engineers and health care workers for more than a decade.
As America’s aging population of Baby Boomers exits the workforce and is replaced by automation software, the country will likely see a shift toward more health care and social assistance-related jobs over the next eight years, the Bureau of Labor Statistics says. Of the 15 fastest-growing jobs in America, eight require an associate’s degree or less, and most are in a health care-related field.
Companies that take the long view prepare for their future hiring needs by investing in workforce development programs, which help develop a pipeline of talent that the company can tap into.
5 Tips for Creating a Workforce Development Program
Companies build workforce development programs when they want to hire employees with diverse backgrounds or employees in fields where the demand for workers far outstrips the supply of talent. Here are five tips for developing and running a workforce development program:
Identify the Need
Talk to stakeholders inside your company about future hiring needs and where they’re having the hardest time finding an adequate number of candidates. Many large companies run workforce development programs designed specifically to attract female candidates, people of color, and candidates with nontraditional backgrounds. Specific industries, like healthcare, create workforce development programs to respond to an ongoing talent crunch. Once you’ve identified the need, assign measurable goals to the program to gauge its effectiveness over time.
Partner with Others
Two corporate rivals might create competing workforce development programs designed around similar hiring goals. That can result in two half-baked programs that return suboptimal candidates. Think about partnering with competitors, community groups, and schools to build a more robust program together. The resulting candidates will likely get more out of the program and be better prepared for the job.
Help Shape the Curriculum
Schools may not necessarily know what your industry’s needs are. Work with schools to develop teaching materials that will result in high-quality candidates. Some companies lend their employees to a workforce development program to serve as instructors.
Identify Talent Early in the Process
If there’s a training component to your workforce development program, try to identify promising candidates early in the process and talk to them about their individual career goals. Doing so may help you jump to the front of the line when it’s time to recruit from the talent pool.
Compete at the End
Companies that choose to partner with competitors to build a workforce development program compete for talent at the end of the process. It’s easier to cooperate at the top of the talent development funnel and later compete at the bottom, rather than building the entire funnel on your own. Cooperation results in better candidates.
Van Ton-Quinlivan built workforce development programs as an executive at Pacific Gas & Electric, and today helps companies design their own programs as the Vice Chancellor for Workforce and Economic Development for California’s community college system.
A 1995 Stanford MBA graduate, Ton-Quinlivan recently sat down with Insights to share her thoughts on why workforce development programs work, their biggest challenges, and what the future will likely hold for hiring in the post-automation world.
What is workforce development, and what does a functioning workforce development program look like in action?
The key to a workforce development program is that a company is able to find the right people with the right skills at the right time. With people, it’s a combination of quality, capabilities, and diversity. The greatest struggle is that without some proactive work to develop that workforce pipeline, it’s a bit of guesswork whether you’re going to get the right people with the right skills at the right time.
Employers are increasingly finding themselves in the “post and pray” mode, rather than having confidence that there’s a sufficient pool of quality, diverse candidates that they can recruit from. That’s why, in the last few years, employers have become much more proactive in thinking through how they really restructure the supply chain that brings them talent.
We’ve seen a number of occasions where the talent supply and talent demand were completely off. We saw it with engineers in Silicon Valley; then we saw it with nursing, where we were importing nurses from other countries because we had such a shortfall. We’ll continue to have these big moments of crisis if we aren’t more proactive about building these talent pools.
Is there a workforce development program that you think works particularly well?
Can I talk about my own model? [Laughs]
I was part of the PG&E PowerPathway model, which was recognized nationally for its industry best practices. Not only did it single-handedly change out the diversity composition of the frontline workforce for PG&E, it also put talent to its best use.
For example, we were able to bring in recently [returning] veterans. By doing a workforce development program, we got them ready to more effectively compete for jobs at PG&E. Instead of earning $30,000 or $40,000 per year, they began in careers that started at $60,000 to $80,000 and had the potential to break $200,000 within their career.
For some, it may have been a long time since they had taken a timed test, or they had to freshen up their math skills or spatial reasoning. Or there was a gap in a certain subset of knowledge they needed to fill in. That’s where community colleges kicked in and were able to design custom training to close that gap in knowledge or skills.
Part of setting up the workforce development pipeline is that you have to challenge existing practices. There was not a shortage of candidates at PG&E, but they tended to be friends of friends, or family members of existing employees, which challenges our [desire for a] diverse pool of candidates.
What we needed to do was look at where the pool was coming from and create a wave of nontraditional and diverse communities. We did a much more comprehensive job by working with partners in the community to do the outreach, awareness, and screening. Then it was the role of the education institutions to close the gap in terms of skills training.
So there’s a screening component, a training component, and, as employers, our role was to articulate what we wanted in terms of knowledge, skills, and abilities. We all did what we did best.
What do you wish employers would do more of in this area?
The generation that’s exiting the workforce is the most educated generation in American history. After them, it’s a much lower rate of education, and our K-12 population is shrinking. With the graying and exiting of the Baby Boomers and the shrinking of K-12, what we’re going to find is that talent becomes a basis of competition [between companies].
Treat your talent development as part of your supply chain strategy. Education institutions are part of that supply chain. They’re not good mind readers, especially given how fast the rate of business is changing. Keeping up with the speed of business is going to take much more communication between employers and education institutions, to help education keep pace with business better.
What’s the greatest misconception today about hiring and workforce development?
There’s a lot of need for jobs that require a bachelor’s degree or more, but there’s an equally large need, especially in California, for middle-skilled jobs, which require more than a high school diploma, but less than a baccalaureate degree.
These are your emergency medical technicians, first responders, people who check you into the hospital and take your stats, handle your records and the machinery and equipment within the hospital. Employers have neglected to put a lot of public attention [on these types of job opportunities], so they’re not being produced with the level of precision and quantity that’s needed.
Automation and artificial intelligence are both widely expected to eliminate millions of jobs within the next decade. Manufacturing plants are increasingly being automated, self-driving cars and trucks threaten to reduce the number of professional drivers, and artificial intelligence and natural language software could replace some service jobs, like call center workers. How are workforce development programs planning for the post-automated workforce?
That was the big difference between the most recent recession and the one prior to it. According to Anthony Carnevale, the foremost economist on the workforce, what normally happens in a recession is when you reduce the number of people in the workforce, your productivity levels go down. And when you rehire, your productivity goes up. That’s the usual equation.
In the most recent recession, productivity became decoupled from the number of workers, so while the number of workers went down, because of technology, productivity stayed the same or actually went up.
As the job market rebounds, the jobs are different now, because they have huge technology elements to them or are being reshaped by technology. Take truck drivers. On the horizon, UPS is developing fleets of self-driving trucks, and they’re coming a lot faster than we think. Or consider waitresses. You see this in airports now — instead of having waiters and waitresses inside restaurants, you now have maybe one or two people behind the counter and the rest of us are placing orders on iPads.
The big challenge we have as a country is that we haven’t built out the social infrastructure, where there’s a constant sequence of skilling, reskilling, and upskilling. The challenge for us is figuring out how to set up the systems so that the on-ramp and off-ramp to training, employment, and reskilling is more fluid, rather than just early [in high school and college] and once in a lifetime.
It’s evolving, because the shelf life of skills is now shorter. It’s going to be a challenge for all of us.
When you graduated from Stanford Graduate School of Business, did you think you’d eventually be working in education policy?
I’ve always had a love of education. Back when I was at Stanford, I did a dual degree — Master of Education Policy — along with the MBA. I went to the private sector and worked in high tech and telecom and found myself, in my downtime, reading a lot of articles about education policy rather than technology magazines.
One day it occurred to me that this is really my avocation, and I started to think about how to begin combining my avocation and my vocation together. It was a bit of a journey to figure that out. I started with some volunteering, some pro bono work, serving on boards, really serving where I could have the greatest impact.
Over 10 years ago, I realized community colleges are the places where the [diverse] workforce could come from.
For readers who might be running or starting their own workforce development program, what would your advice be?
There’s a bit of art in timing these programs. It’s an issue of what I would call the hose versus the hydrant. Jobs tend to drip out one or two at a time, but workforce programming is measured in cohorts. You need at least 15, 20, or 25 positions in order for it to be worth the effort, based on the economics.
In order to make the investment of time, you have to listen to where the workforce pain is, where it’s so painful to hire that your [recruiters are] giving up.
At PG&E, we created a program to generate more energy-efficiency engineering applicants. Our company couldn’t find them — it was just too much work for one company to do alone, so we partnered with other companies.
This is an important point: With the talent supply chain, employers compete with one another for talent. We can compete for talent at the end of the process, but if we don’t come together to help develop a talent pool, we’re going to get a talent puddle.
This program required employers coming together and bringing our collective resources, because the content was so state-of-the-art at the time that each of these companies needed to bring guest lecturers in order to fill up the class.
At the end of the day, we were all so relieved that now there was actually a pool of people to recruit from. It was way too much work for any one company. Developing a workforce pipeline is not necessarily an individual sport; it really is a team sport.
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