W.E. Upjohn Institute 1

Human Capital and Productivity: Toward Quality Job Creation

Randall EbertsW.E. Upjohn Institute for

Employment Research, USA

International Economic Forum of the Americas Conference of Montréal

11 June 2014

W.E. Upjohn Institute 2

National Talent Shortage in US?

200620072008200920102011201220130

10

20

30

40

50

60

0

2

4

6

8

10

12%

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Une

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ate

Economists debate whether there is a skills mismatch or talent shortage in U.S. , as employers complain they have difficulty hiring qualified workers.

Other factors may be in play. For instance, the 2012 Manpower Report stated: “The pay issue is most pronounced in U.S. where over half of employers indicate that inadequate compensation makes it difficult to land candidates. This suggests employers may need to consider paying more to attract the talent they need.”

Source: Manpower Talent Shortage Survey, 2013

Unemployment rate

W.E. Upjohn Institute 3

National talent shortage in Canada?

2006 2007 2008 2009 2010 2011 2012 20130

10

20

30

40

50

60

70

0

1

2

3

4

5

6

7

8

9

% re

porti

ng d

ifficu

lty re

crui

ting

Une

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ate

Source: Manpower Talent Shortage Survey, 2013

Unemployment rate

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Canada and US employers report difficulty filling similar jobs: Top ten list

Canada1. Skilled trades workers2. Engineers3. Management/Execs4. Sales representatives5. Technicians6. Drivers7. Accounting and finance8. IT staff9. Teachers10. Laborers

US1. Skilled trades workers2. Sales Reps3. Drivers4. IT staff5. Accounting and finance6. Engineers7. Technicians8. Management/Execs9. Mechanics10. Teachers

Source: 2013 Talent Shortage Survey Research Results, Manpower

W.E. Upjohn Institute 5

Education Gap: Disconnect between Educators and Businesses

• Differences in perception of job readiness– 49% of employers believe new graduates are adequately

prepared for entry-level jobs– 89% of educators think they are prepared

• Lack of communication– One-third of employers say they never connect with

educators– More than a third of educators report they are unable to

estimate the job-placement rates of their graduates– Fewer than half of youth said they understood the job

prospects of the discipline they studied in schoolMcKinsey Center for Government: “Education to Employment, Designing a System that Works, ” 2012.

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Larger the skills gap, the lower the job creation

Consequences of Education Gap

Each dot is a US metro area; data provided by Rothwell, 2012

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Larger the education gap, the higher the unemployment rate

Consequences of Education Shortage

Each dot is a US metro area; data provided by Rothwell, 2012

W.E. Upjohn Institute 8

U.S. Workforce Development System:Bringing Together Employers and Training Providers

• Workforce Investment Boards– Catalysts for local collaboration between educators and

businesses – Businesses work with training providers to develop training

curriculum – Eligible Training Provider List

• Regional Partnerships– WIRED– Michigan Regional Skill Alliance

• Industrial sector consortia• Community Colleges