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🔒 Editorial: Retraining will become one of our biggest challenges

Jacob Owens April 21, 2021

These days it seems we’re talking about the future a lot – a carbon-neutral, equitable-opportunity, worker-empowered 21st century economy where the world, its people, and the companies they work for are happy. Considering the enormous ...

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Jacob Owens
Delaware Business Times Editor[/caption] These days it seems we’re talking about the future a lot – a carbon-neutral, equitable-opportunity, worker-empowered 21st century economy where the world, its people, and the companies they work for are happy. Considering the enormous economic, technological, political, and social challenges needed to overcome to realize such a vision, it’s easy to see why many see it as little more than a pie-in-the-sky dream for the idealistic. I share those hopes and dreams of a cleaner, safer and more socially just future, although with a greater skepticism that we’ll reach the mountaintop by a deadline like 2030 or 2050. That cynicism comes after years of seeing self-interest scuttle the best intentions in a democratic system. Even if we can get Washington or Wall Street to all move in the same direction, there lies a far greater challenge ahead: how to deal with the massive changes coming for our workforce. Even aside from wholesale changes like a carbon-neutral economy, which would bring huge workforce impacts, the United States is looking at dramatic challenges in its workforce purely due to rapidly advancing automation, machine learning and more that will cut down on the number of human beings needed to operate our plants and complete our daily tasks. That challenge has likely only deepened due to the COVID-19 pandemic. In 2020, leading global consulting firm McKinsey & Co. estimated that 7.9% of the American workforce was at threat of losing their job in the changing economy by 2030. In 2021, that percentage rose to 10.1% or about 17 million workers. Nearly nine in 10 executives and managers say their organizations either face skill gaps already or expect gaps to develop within the next five years, according to McKinsey’s survey of 1,216 employers last year. A fifth of those respondents said that up to half of their workforces could be impacted. In Europe and the United States, workers with less than a college degree, members of ethnic minority groups, and women are more likely to need to change occupations after COVID-19 than before, the McKinsey researchers found. In the U.S., people without a college degree are 1.3 times more likely to need to make transitions compared to those with a college degree, and Black and Hispanic workers are 1.1 times more likely to have to transition between occupations than white workers. Even assuming that Delaware sees a smaller percentage of that need, say 8% of employment change, we would be looking at more than 35,000 workers in the First State needing to learn new skills or find new employment. Amid the pandemic, stimulus funds have funded the retraining of more than 1,200 residents over the past year, showing the immensity of the task before us. Studies have shown us that white-collar employees tend to weather such economic headwinds better than blue-collar workers, as new technical skills are often offered through employer training as companies seek to prevent workforce turnover. Blue-collar changes tend to be more-often paired with the impacts of globalization, where skills combined with workforce costs and automation often lead to job losses. The good news is that there are things employers and the government can do to prepare for this predicted tide. Government-funded job retraining programs, especially for those in affected blue-collar industries, can be lifesavers. Forward Delaware, set up by the Carney administration and the Delaware Workforce Development Board in the midst of the pandemic, was effective in moving unemployed workers quickly into growth industries. However, future participants of such programs likely won’t be able to draw upon increased federal support from unemployment programs while receiving training like they did amid the pandemic. Economic support for those needing to support families while transitioning careers will likely become a greater piece of America’s social welfare net. The recently announced bipartisan expansion of the state’s SEED scholarship program is also a good support that will last long after the pandemic subsides. Since 2005, the SEED program has covered tuition for nearly 13,000 local high school graduates who attend Delaware Technical Community College. The proposed expansion, called SEED+, is designed to attract larger employers to the state and assist the 56% of Delawareans aged 25 to 64 who lack a post-secondary degree and are considering a career change. Employers can also help in the transition by focusing more on required skills and tasks to be completed rather than job titles or academic degrees. Remote work could also be an opportunity to support minority communities that may be disproportionately impacted by the changing economy but unable to move to a company’s office location. The importance of preparing for this challenge cannot be overstated, because the ability to address it doesn’t happen overnight. Programs to train workers with skills for a new career path can take many months and workers need to know where they can go to obtain necessary resources. As we work to close out this current crisis, we should begin to focus on the next.

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