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The Skills Currency and Higher Education’s Call to Action

The EvoLLLution | The Skills Currency and Higher Education’s Call to Action
Skills are the new currency of the labor market, and higher education needs to get better at explaining to employers and students how academic programs help fill the skills gap.

Bob Dylan said it best: “The times, they are a-changin’.”

The days where a college degree was the pinnacle of education are over, as are the days where a career was commonly spent in the same field or organization from “hire to retire.” Today, education and career pathways are seldom linear. Instead, workers must transform themselves as lifelong learners who upskill and reskill to stay ahead of the curve. This agility is not only necessary for individual workers, but for the employers that hire them as well. In this changing landscape, skills have become the new currency of the workforce, and in order to serve students well, higher education needs to reinvent and refocus around this currency.[1]

The College Degree and Growing Skepticism

As the labor market shifts, employers are increasingly realizing that they are unable to hire skilled workers. More than a third of business leaders do not believe that higher education institutions in the United States are graduating students with the skills and competencies they need, according to a 2014 Gallup poll, conducted on behalf of the Lumina Foundation.[2] Four years later, findings in the ManPower Group’s 2018 Talent Shortage Survey indicated that 45 percent of employers globally said they can’t find candidates with the skills they need, which is the highest reported percentage in over a decade.[3]

As this trend continues, employers are becoming increasingly skeptical of the value of college degrees and credentials. This skepticism is further exacerbated by the fact that employers and students alike have little transparency into the skills and knowledge that a student has actually demonstrated in order to earn the degree.

Our education system is not keeping up with the needs businesses have, and what is important today should be proof of skills and the ability to deliver results,” Zoe Harte, senior vice president and head of HR and talent innovation at Upwork, told the Society for Human Resource Management in 2018.[4]

Because of this lack of skill-to-credential translation and transparency, a growing number of companies—including Google, Apple and IBM—are putting less emphasis on a degree and more priority on industry-related experience to inform their hiring decisions.[5] For employers, an individual’s demonstrable skills are becoming more valuable than the credentials they hold.

The New Currency of the Labor Market

In a recent white paper published by the World Economic Forum, skills are identified as the “new currency of the labor market.”[6]

To meet the needs of students and employers, now and in the future, skills must also become the new currency of higher education. As technology advances, the use of artificial intelligence is making it easier to identify the skills that employers are asking for. Labor market analytics produced by organizations like Emsi and Burning Glass provide insightful data on skill demand and trends. These data can serve as powerful signals to higher education, reflecting the high-demand skills employers care about.

However, context is everything. Without clarity on what these skills look like in practice across industries and job roles, the transparency and congruence problem that exists between skills and higher education credentials will persist. Labor market analytics alone are not enough to help bridge the gap.

A Shared Skills Language

In order for higher education and employers to help one another more effectively, a shared language and clarity around skills is necessary. This need is articulated well in the 2018 Strada Institute for the Future of Work and Emsi report, Robot-Ready: Human+ Skills for the Future of Work, which says, “[T]he time has come for a modern-day Rosetta Stone to translate and decode the intersection between postsecondary education and the workforce.”[7]

Labor market analytics can provide signals and a useful starting place for employers and higher education to calibrate around a shared skills language, but added clarity is needed to articulate how skills are applied by different industries and in different job roles. For example, labor market research may indicate that “communication” is a high-demand skill for both nurses and software engineers. Based on this information, one may reasonably conclude that employers are looking for nurses and software engineers who can communicate effectively with others, both verbally and in writing. However, for each of these job roles, effective communication skills are much more nuanced. Communication for a nurse may include providing accurate and clear patient transition information to the new nurse upon a shift change, while communication for a software engineer may include effectively communicating system changes to stakeholders during a code review. A generalized, broad interpretation of what “communication” is or means is not enough. In order to be of maximum value, skills must be articulated through an operational lens, rather than decontextualized key words.  How would the student perform the skill in a particular industry? How would an employer expect a student to perform the skill in a particular job role?

It is the added context of the applied skill in different industries and job roles that maximizes the value of labor market insights.

A shared skills language is crucial to higher education’s ability reinvent and refocus around the new currency of the labor market. This shared skills language must be achieved through a collaborative, labor market data-driven approach between higher education and employers. A shared skills language is necessary to the demystification of the skills gap, and higher education’s ability to provide the relevant, skills-based education that learners need and employers want.

A Call to Action

Higher education has a clear call to action to better meet the needs of employers and learners. America’s colleges and universities must reinvent themselves to become as skill-focused and nimble as the worker of the future must become. This reinvention is not only critical to higher education’s ability to improve its service to learners, but to maintain its relevance and, frankly, its survival. As Joseph E. Aoun notes in Robot Proof: Higher Education in the Age of Artificial Intelligence, “It no longer is sufficient for universities to focus solely on isolated years of study for undergraduate and graduate students. Higher education must broaden its view of whom to serve and when. It must serve everyone, no matter their stage in life.”[8]

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[8] Aoun, J. E. (2018). Robot-proof: Higher education in the age of artificial intelligence. Cambridge, MA: The MIT Press. (2017)