Booming job market masks looming skills deficit

a business woman climbing stairs but the next step is missing

FROM THE DEAN’S DESK

By most measures it is a great time to be in the job market. On the service side, just about every restaurant and retailer has a help wanted sign in the window. Some companies are even offering bonuses just to show up for a job interview.  

By the end of April, however, we’d reached a new job vacancy record—9.3 million—according to a June report from the Bureau of Labor Statistics. For employers eager to reopen after the pandemic, there have been huge challenges.

Not only are there 8 million fewer people in the workforce compared to pre-pandemic times, nearly 4 million people quit their jobs in April. It was another record, reported The New York Times.

Help Wanted: One Custodial Worker

The perceived and real reasons for the labor shortage are complex and varied. Economists cite shortages in transportation and daycare, early retirements, COVID-19 fears, excessive unemployment benefits, and even increased personal savings as impediments to getting people back to work. 

While the knowledge sector is struggling to fill jobs the worker shortage situation is particularly dire in services and trade industries. It’s hit us at home at our Silicon Valley campus where we’ve been trying to hire custodial and maintenance staff for months. The search continues.

Meanwhile, Yesterday’s Future is Now.

After more than a year of wrenching job losses, this job market boom may seem like a welcome gift of the improving economy. But, it’s hard to see where it’s going. Each underlying cause has a different conclusion.

Although it is capturing our attention today, we can’t afford to be complacent about all the job opportunities. Prior to the pandemic closures we were grappling with the looming impact of new technologies on the job market. That challenge is not only still significant, it’s growing, in part due to the huge labor shortage. 

The pandemic distracted us, but the “tempo of technology-driven change is accelerating,” according to an April 2021 report by the World Economic Forum.  

Good News. Bad News.

As we are struggling to fill jobs, we are moving fast toward a transformed workforce. Machines and automation are expected to fully or partially displace as many as 85 million jobs by 2025, according to an October 2020 report by the World Economic Forum. It’s a monumental challenge.

History, however, teaches us that disruptive technologies end up creating more jobs than they destroy. Even more jobs—97 million—are expected to be created.

Herein lies the challenge for governments, academia and the industry: the jobs being created need a different skill set than the ones being destroyed.

While the overall rate of job creation may surpass the rate of job destruction, it is not an automatic zero sum situation. The skill requirements and timing matter a lot…That will require a significant level of ‘reskilling’ and ‘upskilling’ from employers to ensure staff are sufficiently equipped for the future of work.

World Economic Forum

A Short Window of Time to Act

For a lot of people, companies and organizations, the pandemic delayed critical skills planning. To meet the extremely short runway for preparation, everyone will need to move fast. Half of all employees will need some level of retraining in the next five years.

The window of opportunity to ensure workers have the right skills has gotten a whole lot shorter, said Saadia Zahidi, managing director of the World Economic Forum. 

It’s a tough mandate to meet on a huge global scale. But, this is the kind of call to action UCSC Silicon Valley is ready for. It’s why we’ve expanded our offerings in AI, machine learning, robotics, data analysis, the latest computer languages, and biopharma.

We all have a role to play in supporting a healthy economy and ensuring individuals have the skills they need to thrive in these new high tech jobs. We can’t wait to help you get there.

— P.K. Agarwal
Dean, UCSC Silicon Valley Professional Education

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