Employers around the world bemoan the dreaded skills gap, lamenting that they can’t find workers with the appropriate training to fill sorely needed roles. Meanwhile, millions of would-be workers are unemployed or underemployed. So where is the disconnect? And more importantly, how can it be fixed?
Mourshed leads both McKinsey’s global Education Practice, which supports schools and vocational institutions to improve students’ skills, and the youth employment nonprofit Generation, founded by McKinsey, which places disconnected young adults in jobs through innovative training programs. She explains how Generation is working to create a replicable model to narrow the skills gap through focused training of young people – and how job seekers of any age can position themselves to fill the gap, too.
Explain the skills gap. Why is it such a difficult problem, and why does it exist?
You have to begin with the sheer magnitude of it. Worldwide 75 million young people are unemployed, and three times as many are underemployed. Juxtapose that to what employers say — 40% of them, across sectors, say they cannot find the skills they need even for entry-level work — and you see there’s a problem. How is it possible these two things coexist?
If you take that question as the frame of the challenge, on the side of learners only one in two globally would say their education or training will find them a job. That’s quite tragic. Further, only about 35-40% say they had the information they needed to make the right decisions about what to study and how to do it. This could be information about wages, options, programs, what’s the most effective process to getting trained correctly.
On the side of the employer, there are a number of factors. First, employers face information vacuums when it comes to mastery of skill. We often use degrees or certificates as a proxy for mastery, but a piece of paper doesn’t necessarily mean you have the mastery of a given skill. The second issue is a data gap in the return on investment. A study done two or three years ago found less than 20% of CEOs know the ROI for their corporate learning programs. That’s a deterrent; if they knew, they would invest more.
So on both sides we’re dealing with information gaps, data gaps, expectation gaps. Meanwhile, the pace of job creation is slower than the demand, and even when jobs are there we’re seeing high churn.
How did Generation come to be, and how is the initiative working to narrow the skills gap?
I did my Ph.D. in economic development, and I took that as an opportunity to return to the Middle East, where I’m from. There was a lot of interest in the region at the time, and I began working with McKinsey when they were opening an office there. I was interested in how school systems become high performing, and I founded the Education practice within McKinsey.
Generation has been live for two and a half years. It’s the world’s largest demand-driven youth employment program; we place people in jobs. We work across five countries – the U.S., Spain, Kenya, India, and Mexico – in 47 cities. It’s a skills-training focused on four sectors: healthcare, tech, retail, and skilled trades.
We realized that as children were progressing through primary and secondary school they were encountering increasing roadblocks to developing their careers. So we’re developing a view about solutions: how we can support young people to be employed.
We seek to deliver to them higher productivity and higher income, by focusing on effective training for jobs that are high churn or require scarce skills.
Our graduates, who are 18-29 on average, are making two to six times what they were making prior to Generation. They’re a fragile learner population — they tend to face challenges likes poverty or single parenthood – but one that is very motivated to improve their well-being.
So we offer social support services because often with this more disconnected youth population — getting jobs involves more than getting appropriate training. We find transportation and child care, which are often critical barriers. We drill into them: What is your plan A, plan B, plan C for how to get to work every day? It sounds simple, but without these critical barriers removed, they might not get to work and then even the best training won’t be of help.
We’re two and a half years into the Generation journey, and we have 13,000 graduates and an 82% job placement rate. We’re aiming to reach 1 million young people.
There are two main challenges in solving the issue. The first is replicability and scalability. Programs can help hundreds of young people annually, but the problem is in the hundreds of thousands. The second challenge is the data. There isn’t a lot of science to show employers the return on investment in programs to narrow the skills gap. We need to provide sufficient evidence.
So Generation is focused on making our progress replicable and the ROI demonstrable. We map out boot camps that are 4 to 12 weeks long. We get them placed in jobs. We track for the employers these new employees’ productivity, retention, and more to show the cost of the program is no more than two months of the salary. In fact, we’ll be 50% self-financing by the end of this year and 100% by 2019.
We’re seeking to embed this methodology in training providers because we believe this message and this work is powerful. What we are finding is that yes, it is possible.
How can job seekers position themselves to take advantage of the skills gap?
There are a number of things anyone can do, whether you’re 18 and deciding what you want to study or you’re further along in your career and you’ve just been displaced.
First, understand where the jobs are. Any number of information sources will describe the volume or job demand in different professions and their wages. Also, focus on places of study that actually yield graduates who get jobs. I would very much ask before any education or training program: What are the job placement and retention rates? That’s critical as you look at what is a productive course of study.
Second, the type of program you enter should be one in which you learn by doing. Obviously, there is a place for learning theory in every profession, but it needs to be complemented by practicum activity so you achieve true mastery. You can’t just dive into a program simply to say you did it.
Third, determine whether there is there is a credential that the industry values, like CompTIA or IT – or a state- or industry-level certification that employers want. You want to check all the boxes when they consider your application.
You’re working to solve macro-level, global issues. What’s your advice for someone who wants to tackle big problems for a living?
If you had asked me 15 years ago if I would be working in the employment and education space, the answer would not have been yes. It’s indisputable: There’s an element of serendipity, of “right place, right time” that brought me here.
Developing ecosystem thinking is the most important. But a big part of it is to simply start. Fundamentally, I think for millennials — who are, by all counts, quite mission-oriented — the world today has a lot of complex problems. For those who are inclined to say, “Yes, I want to take that on,” the first step is to tackle small complex problems that you find in your community, and move on from there. Just start with something that can help others and the world around you. That’s how it all begins.