Human capital focuses on the education, skill levels, and problem-solving abilities that make workers an asset to companies. As America continues to move into technical and service sectors, the question becomes: Does America have enough human capital to handle the jobs of the future?
In a word. No.
The Current Workforce Lacks Proper Skills
In order for our workers to compete at skilled levels, they need to be flexible, adaptable, quick learners, and problem solvers. Today, many workers lack even these basic skills.
A literacy study tested how well people could function in society, reach goals, and achieve personal knowledge with written information. They asked participants to explain what a newspaper article meant, to read a simple survey with percentages of yeses and no’s, and to figure out how much it would cost to carpet a room given dimensions and cost per yard.
Testers placed scores on a scale of 1-5. They expected most high school graduates could score in the top 2 levels. But 50% of American workers scored in the bottom two levels! 15% tested at level 4, and only 3-4% earned the top level.
American schools are training workers who are woefully unprepared for the jobs of America’s future.
Not every worker needs to be a college graduate. Indeed, perhaps 30-40% of new jobs will require college degrees. However at least 89 percent will need some post-high school vocational training. Currently the US has far fewer students than other countries invested in these vocational tracks.
How Can Businesses Manage the Human Capital Crisis?
- Work more efficiently. As companies move forward, many are using fewer workers to do more work. Technology has replaces some workers and made the current employees more effective.
As organizations streamline their processes and outsource jobs, they have less of a need for scarce human resources.
- Train their Employees. Companies expect to train employees in their specific methods. They spend $30 billion on training. However most of those funds were spent by just .5% of US companies. And only 1/3 of the fund were spent training non-degreed workers who make up 2/3 of the work force.
To stay competitive, nearly every business will need to create a plan for taking “substandard” employees and training them in the skills needed for success.
- Hiring Foreign Workers. Statistics show students from China, Japan, and other nations are better educated and trained than American students. Many companies are looking overseas to solve the qualified worker shortage of the future.
- Partner with Schools. An increasing number of businesses are encouraging public and private schools to raise the bar. They may offer incentive programs or apprenticeship programs. FIRST partners high school students with engineers to create and compete robots. Hospitals partner with colleges to train nurses and other medical staff. This gives them the opportunity to hire the cream of the crop.
Theodore Hershberg, professor at the University of Pennsylvania, said, “The human capital development challenge is not one among many rather, it is the greatest challenge facing America.”
The human capital crises will have a serious impact on America’s future. It threatens to reduce productivity and increase the gap between rich and poor. Businesses that solve the problem proactively will have an edge on success.
Copyright ©2005-2017 Joel Garfinkle, All Rights Reserved.
Joel Garfinkle is recognized as one of the top 50 coaches in the U.S., and the author of 7 books, including Getting Ahead: Three Steps to Take Your Career to the Next Level. He has worked with many of the world's leading companies, including Google, Deloitte, Amazon, Ritz-Carlton, Gap, Cisco, Oracle, and many more. Visit Joel online at Garfinkle Executive Coaching. Subscribe to his Fulfillment@Work Newsletter and receive the FREE e-book, 40 Proven Strategies to Get Promoted Now!
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