Page 56 - Bloomberg Businessweek-October 29, 2018

◼ ECONOMICS Bloomberg Businessweek October 29, 2018

positions as of August, employers can’t find the nations, U.S. millennials scored lower than their
people they need in the ranks of the jobless, and peers in 15 of 22 countries in literacy and were
luring them away from other employers has got- tied for last in numeracy and “problem solving in
ten prohibitively expensive in some cases. “Your a technology-rich environment,” according to an
choice is always make or buy. ‘Buy’ is steal some- analysis of the results by the Educational Testing
body else’s worker, which requires higher wages,” Service. Employers often have to provide reme-
says Anthony Carnevale, founder and director of dial training for entry-level workers in areas such
Georgetown University’s Center on Education and as basic math.
the Workforce. Because worker training benefits the society as
Fifty-five percent of U.S. employers surveyed by a whole, not just the individual employer, there’s
ManpowerGroup this year said they were provid- an economic case that government should pro-
ing additional training to cope with talent short- vide it directly or at least subsidize it. Yet in the
ages, followed by 40 percent who said they were U.S., public spending on labor markets (which
recruiting outside their traditional talent pool. Only includes unemployment benefits) has fallen from
26 percent said they were offering higher salaries. 0.8 percent of gross domestic product in 1985 to
Rapidly changing job requirements also 0.3 percent in 2016, according to OECD data. In
demand more training. Just a few years ago experts July, President Trump signed an executive order ● Share of workers
were predicting that computers and robots would creating a Council of the American Worker and who recently received
employer-provided
soon make flesh-and-blood workers obsolete. directing funds to apprenticeships and retraining training*
Someday, perhaps, but for now the main effect of for older workers without college degrees. On the
automation has been to force humans to develop other hand, the current administration sought—but Finland
new skills to work with intelligent machines, rather failed to secure—a 40 percent cut in funding for the 71%
than for them. “All of a sudden you look up and Workforce Innovation and Opportunity Act, the Sweden
you say, ‘Oh, we still do need workers,’ ” says Jacob biggest federal worker retraining program. 69
Duritsky, vice president for strategy and research Achieving the right balance between public and U.S.
at Team NEO, an economic development organi- private is tricky. Thijs van Rens, an economist at 66 37
zation for north eastern Ohio. Britain’s University of Warwick, says his research U.K.
Employers are discovering that becoming a with colleague Roland Rathelot and others finds 62
learning organization is a good way to fend off that public funding for training is largely a give- Canada
headhunters. Especially now, with change hap- away to employers. 62
pening so quickly, workers will stick with a com- Singapore offers a model of how to combine the Germany
pany that helps them continuously upgrade their two. It subsidizes qualifying companies that pro- 57
skills, says Bill Priemer, CEO of Hyland Software vide training through its new SkillsFuture initiative, South Korea
Inc. in Westlake, Ohio. In a survey this year by but the grants don’t cover the full cost. That dis- 56
LinkedIn Inc., 94 percent of employees said they courages companies from offering sham training Israel
would stay at a company longer if it invested in just to get money from the government. 53
their career development. Anna Lim, the founder and majority owner of Chile
That’s not to say all training is good. A lot of Soup Spoon Pte, which owns 30 restaurants in 51
employers teach “tightly specified, highly stan- Singapore, says she had to have her instructors Japan
dardized tasks” that will soon be taken over by certified and her training results regularly audited 48
computers, says John Hagel, co-chairman of the to get SkillsFuture to pick up part of the tab. Does France
Center for the Edge, a unit of Deloitte LLP that she worry that other companies that don’t train 42
researches business and technology. Hagel says will free-ride on her investment? Not much. “In Turkey
companies should instead be drawing out employ- Singapore right now we have stopped thinking like 31
ees’ “curiosity, imagination, creativity, emotional that,” she says. “At the end of the day it’s about Italy
intelligence, social intelligence,” which are harder uplifting the skill set of the whole industry. We have 30
for machines to replicate. to be broad-minded.” Russia
There’s also a tussle over who should do the To upgrade the world’s workforce for the skills 24
training: employers or schools. Community of the future, the ideal environment is what econo-
colleges are often willing to tailor curricula to mists call a high-trust equilibrium: Each employer
employers’ needs, but even they balk at teach- invests in training because it’s confident others will
ing specific tasks that will be useful to just one or do likewise. We’re not quite there yet. �Peter Coy
two businesses. Executives, meanwhile, complain
that the U.S. educational system is pumping out THE BOTTOM LINE American companies are starting to invest
more in worker training amid a tight job market. Countries such as
unqualified graduates. In a recent survey of OECD Singapore offer a model of how to share the cost burden.