Employers investing in higher education play integral role in closing skills gap
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In the State of the Union on Feb. 7, President Biden stated that the country is moving into the next phase of the pandemic as the national and public health emergencies expire on May 11. We are emerging on the other side of COVID-19’s initial grip and the aftermath of trends like the Great Resignation, when 50 million workers quit their jobs in 2022 in search for a career change (i.e., remote work), more employer support in skill advancement, and fair (or higher) compensation. This era of massive transformation poses the question: What is the state of the workforce – and workplace – now, and where is it headed?
A snapshot of Indiana’s workforce and skills gap
When looking at Indiana, advanced manufacturing remains the number one industry in the state, and Indianapolis anchors one of the largest life sciences clusters in the U.S., from pharmaceuticals to agriculture. The Circle City is also host to a vibrant tech community and often the center of an impressive roster of sporting events, supporting hotel and hospitality growth.
To best support a growing and evolving economy, we must understand how to bridge the skills gap that can often hold the workforce stagnant. Unemployment rates in Indiana are historically low, and companies are finding it difficult to attract and retain workers that meet specific skill requirements. One primary reason for this is the steady decline of Hoosiers pursuing education after high school. In fact, college-goers in Indiana decreased from 59% in 2019 to 53% in 2020 and around two million Indiana residents who are of working-age do not have post-secondary degrees.
While the reasons for this decline are complex, one explanation is cost. According to EducationData.org, the average cost of college for students nationwide is over $35,000 per year — and this has more than doubled in the 21st century. Depending on where one falls in their life – a recent high school graduate or an adult learner with years in the workforce already – the barrier to entry for a quality post-secondary degree is concerning.
In short, our nation is in dire need of skilled workers, but the cost and access to higher education has to be addressed as a solution to workforce demands.
One solution: collaboration and partnerships between colleges and employers
Companies are grappling with the urgent challenge to future-proof their organizations, and retaining and upskilling talent is part of that effort. Employers will ultimately suffer if their employees don’t have the skill sets to do their job effectively, so it’s important that leadership prioritizes educational pathways for all staff. For example, employers can play a key role in offering opportunities to skill up, and help the company thrive, by partnering with higher education institutions. These partnerships allow for collaboration and minimize (or in some cases, eliminate) barriers for entry.
Partnerships between employers and universities are a part of learning and development, commonly referred to as L&D, and is offered in some form in about 70% of US companies. L&D combats burnout caused by underutilization or lack of a clear pathway to growth, by investing in and increasing growth opportunities. By offering an education benefit, companies attract new employees, enjoy a more highly trained workforce, and, according to a 2 year Lumina Foundations study, one education reimbursement program had a 129% return on investment. Tuition support is one type of L&D offering. Millennials have long rated development opportunities as important to them in a job, and LinkedIn found that 76% of Gen Z believe learning is key to their success. What’s more, LinkedIn found that 43% of Gen Z wants fully self-directed and more independent learning, which provides learners the ability to learn anytime and at their own pace. As millennials and Gen Z become the majority in the workforce, companies must invest in their development or risk losing them.
The KFC Foundation recently announced a new partnership with WGU. Through this partnership, the foundation pays full tuition for any employee who completes their degree at WGU and up to $20,000 in tuition benefit to employees who pursue their degree at another institution. This partnership attracts and retains talent to work in KFC restaurants, will create an engaged workforce, and removes barriers for their employees who have educational and career aspirations but may not have the resources to pursue those aspirations.
While most companies cannot offer education benefits at the level of the KFC Foundation partnership with WGU, companies get a tax break for offering about $5,000 in education benefits. Given the return on that investment, companies large and small should consider such a partnership with higher education institutions. Collaboration with higher ed institutions can also shed light on the skill sets needed for hard to fill positions and can result in development of curriculum to support specific workforce needs. While our economy will undoubtedly continue to fluctuate, affordable and accessible education opportunities can boost Indiana’s workforce by upskilling and retaining workers, filling in-demand roles, and encouraging prospective students to pursue higher education, no matter where they are in life.
In my more than 20 years in the field, it has become evident that no matter the job one currently has, or hopes to have in the future, accessible pathways to upward mobility are a vital part of a thriving workforce.