Closing the Skills Gap With a Talent Supply Chain

September 30, 2014

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Few readers will be surprised to learn that a skills gap is affecting the U.S. economy. U.S. employers are not able to find employees with the skills needed for open positions, and most unemployed job seekers agree they need additional education and training to get the jobs they seek. While this gap isn’t new, it is growing and will affect standards of living if we don’t start addressing it now.

At Accenture, we tackle difficult business challenges by establishing collaborative partnerships with government agencies, clients, nonprofits, alliance partners, and strategic third-party service providers. We have seen time and again that when you build partnerships and apply different perspectives and experiences to solving problems, you achieve a greater outcome than any single participant could have achieved on their own. We believe this approach is needed to meet the challenges faced by the 21st century workforce, and that by bringing together all the entities affected by the skills gap, we can make a real difference for our workforce and in our nation’s prosperity.

But this problem is complex—impacting millions of people—and growing. According to Georgetown University’s Center on Education and the Workforce, 5 million U.S. jobs will be unfilled in 2020 due to the skills gap. Recent research brings to life the magnitude and impact of this gap:

• The Accenture 2013 Skills and Employment Trends Survey: Perspectives on Training, which captured input from 400 executives at large U.S. companies, found that almost half of respondents are currently facing or anticipating a skills shortage and almost 30% anticipate a loss of business to competitors due to this shortage. Another 30% believe they face a loss of revenue because of it.

• In partnership with The Manufacturing Institute, Accenture studied the effects of the skills gap on U.S. manufacturers. Our Out of Inventory: Skills Shortage Threatens Growth for U.S. Manufacturing study found that 75% of manufacturers report a moderate-to-severe shortage of skilled resources. These shortages are directly impacting manufacturers’ bottom lines: the median survey respondent is projected to lose 11% of annual earnings (EBITDA) or $4.6M for a company with $500 million in annual revenue.

• As reported in Great Expectations: Insights from the Accenture 2014 College Graduate Employment Survey, 13% of graduates in the 2012/2013 classes have been unemployed since graduation. Only 46% of graduates from those years have full-time jobs, while 46% report their jobs do make use of their college degrees.

In our recent report, U.S. States: For Richer, For Poorer? Winning the battle for talent and securing our standard of Living, we determined that if America does not “respond with urgency and decisiveness to address the fundamental challenges in [our] labor markets, [we] will see declines in productivity growth and a shrinking workforce,” and ultimately, a 9% decline in the standard of living by 2030.

The Right Skills at the Right Time

Working with other organizations, Accenture has been taking steps to help close the skills gap. In 2010, we launched our Skills to Succeed initiative, which aims to advance employment and entrepreneurship for people around the world. The initiative was born out of a desire to give back to the communities where we work and live by combining our training knowledge and experience with our ability to assemble partnerships to solve problems.

To date, with the help of our partners, we have equipped more than 500,000 people globally with the skills to get a job or build a business, and we plan to increase that number to 700,000 by 2015.

In the United States, our company teams with a number of nonprofit partners on our Skills to Succeed efforts. For example, we work with Upwardly Global, an organization that helps work-authorized, skilled immigrants transition their careers to the United States by providing professional job search training and access to employers. We’ve also partnered with the United Service Organizations (USO) and the Institute for Veterans and Military Families (IVMF) at Syracuse University to help support our military and their families as they transition into civilian life.

In fiscal year 2013, Accenture and the Accenture Foundations awarded the Knowledge is Power Program (KIPP) Schools a grant to support the expansion of the Future Focus program. KIPP is a national network of open-enrollment, college-preparatory public charter schools that prepares students in underserved communities for success in college and in life. The Future Focus program is a college and career-readiness program created

by Accenture and KIPP. The grant will enable KIPP to deliver skills training, mentoring and internships to nearly 7,000 students. The program has been rolled out in nine cities across the United States, with others to follow soon.

In the next three years, our company will help the Harold P. Freeman Patient Navigation Institute (PNI) train 7,500 new patient navigators in 35 locations across the United States. Patient navigation supports individuals through every step of their healthcare journey and has been proven to contribute to improved patient outcomes. PNI has already trained thousands of patient navigators in person and online, playing a major role in preparing people for a meaningful job and putting them back to work while improving access to healthcare for all individuals, especially those from disadvantaged communities.

These are examples of the impact several organizations are having by partnering together. But imagine the greater impact if more businesses, more nonprofits, more educational institutions, and more government entities were working together to close the skills gap. In addition to teaming to build the right skills at the right time, imagine if we were able to get the right talent to the right employer.

The Talent Supply Chain

Through partnering on skill-building initiatives such as these, as well as by providing business operations services to our clients, we have witnessed the effectiveness of the supply chain approach to managing talent—getting the right skills to the right places at the right times. This concept is central to Accenture’s business and how we serve our clients, and it’s a critical concept for the business community to consider as we work together to solve the skills gap.

A key element of the “talent supply chain” concept is that it is driven by demand. Any effort to close the skills gap must be grounded in an understanding of the skills and competencies demanded by employers. For the supply chain to work for both employers and job seekers, it must be anchored in what the labor market is asking for and must help workers obtain the skills they need to pursue in-demand jobs and careers.

One talent supply pipeline program we work with is Skills for Chicagoland’s Future (SCF), a public- private partnership uniting Chicago and Cook County government, businesses, job seekers, workforce development partners, and educational institutions. The partnership represents a coordinated effort to reduce the skills gap in the Chicago area by helping employers find unemployed job seekers for available positions. Rather than training people in a skill and hoping they find a job, SCF focuses on working directly with businesses to identify the skills they require to meet current and projected staffing needs. SCF then retrains people specifically for available jobs that are in demand, providing a viable career pathway for the unemployed in Chicago to move directly into work.

Another example of the talent supply chain work that is taking shape is a research partnership between Accenture, Harvard Business School, and labor market analyst Burning Glass Technologies to address America’s “middle skills” gap. Middle skills jobs are traditionally defined

as roles that require more education or training than a high school diploma but less than a four-year college degree. Our research will go beyond this definition and explore the subset of middle skills jobs that drive U.S. competitiveness and enable career growth for the average American worker. The research approaches the middle

skills supply-and-demand gap through the lens of the private sector to determine what businesses can do (in conjunction with other key stakeholders) to improve their talent supply chains.

Closing the Gap: U.S. Chamber Talent Pipeline Management Project

I’m proud of the impact Accenture, with the help of our partners, is making toward closing the skills gap, and I am pleased that we are playing a role in the launch of the U.S. Chamber of Commerce Foundation’s Talent Pipeline Management Project. The goal of the project is to develop a talent supply chain approach that can be scaled nationally to help businesses, educational institutions, government entities, and nonprofit/community organizations work together to develop practical solutions.

In the first phase of the project, Accenture will create a portfolio of case studies that reinforce talent pipeline management concepts that can be leveraged for national solutions. We also will support the Chamber Foundation by developing the business case for pursuing the supply chain model and convene organizations to help us plot the course forward.

This is an exciting opportunity to conduct important research, test ideas, and begin to build out talent supply chain solutions. We invite other organizations to share their thoughts and continue working to address a challenge that affects not only our respective businesses but the future of our country. The investments we make today in closing the skills gap will serve as the foundation for tomorrow’s economic growth.

Jorge L. Benitez retired in 2014 as Accenture’s chief executive of the United States and senior managing director of North America. He had primary responsibility for Accenture’s business and operations in North America, including developing and executing the company’s business strategy, delivering client service and driving its growth in the region.

 

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