Our government wants businesses to stop outsourcing. It creates incentives to encourage the hiring of American workers. It implements policies to keep jobs and factories here in the U.S.
And while these measures are all well-meaning, none of them ultimately tackle what is the greatest threat to our nation’s long-term economic prosperity—the technical skills gap in our workforce. Couple that with restrictions on immigration, and particularly H1-Bs, and we’re on the brink of a talent vacuum here in the U.S.
As someone who works with businesses from around the country, from industries as diverse as manufacturing to architecture and construction, I can tell you that the number one thing that keeps CEOs up at night is the issue of talent. Simply put, there are not enough technically skilled workers out there to meet the demands of these companies. Ultimately, that is what drives factories and jobs overseas – we don’t have the skills to fill all of the needs here at home— the growing STEM skills gap is causing the outsourcing of high-paying technical jobs.
Advancing Technologies, Shifting Labor Needs
As technology advances and becomes an integral part of our factories and workspaces, a strong background in STEM will be non-negotiable for workers seeking to improve their career prospects. From traditional tech-heavy fields such as IT and software development to industries moving more toward automated processes such as manufacturing, transportation and financial services, it is near impossible to find an industry that won’t require additional technical labor. While automation will obviously make certain jobs obsolete, the need to implement and maintain automated systems will create a host of new high-paying opportunities—that is, if the next generation of workers has the skills to fill these vacancies.
Unfortunately, the statistics show that the U.S. is woefully unprepared for this shift—and its impact is being felt across the board. According to data released last year by Ranstad North America, as of 2016, the U.S. had roughly 3 million more STEM jobs than it had workers to fill these vacancies. When you factor in that more than two-thirds of tech jobs are now already outside the tech sector, these are statistics that should make economists and elected officials rejoice because of the explosion of high-paying jobs, but shutter because we simply don’t have the talented people to fill those jobs.
The Need for Education Reform
Even if our country were to vastly increase the number of skilled immigrants allowed into the country, the long-term problems can only be solved one way: our labor woes will remain unless we finally address the elephant in the room—STEM education—or rather, our struggles in this area. This is a problem both for students in our inadequate education system, as well as workers who may want or need to develop technical skills later in life to advance their careers.
According to the Pew Research Center, in 2015 the U.S. placed 38th in math and 24th in science out of 71 other participating nations in the PISA, the largest cross-national test to measure reading ability as well as math and science literacy. Among the 35 members of the Organization for Economic Cooperation and Development, which sponsors the PISA initiative, the U.S. ranked 30th in math and 19th in science.
In other words, in order for the U.S. to fill all of these jobs and compete on an international level, and sustain the kind of economy that will continue to provide economic opportunity for all Americans and maintain the quality of life we have enjoyed for generations, business leaders and elected officials must put a higher priority on STEM.
Over the past few years, I have had numerous conversations with industry alliance heads, executives and current and former elected officials on how to tackle this issue. Those conversations have yielded a number of commonsense policy solutions that I believe, if implemented, could help our country in both the short and long-term:
1. Promoting public and private sector partnerships.
It is my sincere belief that a strong partnership between the public and private sectors is an absolute necessity. After all, who has more knowledge of the skills needed for tomorrow’s jobs than the employers? As such, it makes absolute sense for private companies to take a more active role in STEM education in our public schools and universities and in retraining workers for tomorrow’s jobs. Working with schools and other facilities to help ensure that training is provided in areas where it can be best applied would be a great model to establish. I believe this partnership between the University of Maryland in Baltimore County and Northrop Grumman, for example, serves as an excellent model of what can be accomplished.
2. Educating students on alternatives to four-year degrees and on the diversity of STEM careers.
As an English major, I don’t mean to insult the value of a four-year liberal arts degree, but we need to ensure that students are aware of their options. For instance, there are many professions in the manufacturing sector (CNC programmers, CAD/CAM jobs, manufacturing design engineers, etc.) that can offer a good salary—and they don’t require the time and expense (and debt) of a four-year institution. This training and these skills can be acquired in far less time, and for a fraction of the cost of an undergraduate education, and can be applied immediately. Depending on what is important to a student, a four-year degree is not always the best option—and our schools and guidance counselors should recognize that.
In the same vein, two recruiting challenges I have often heard from executives are that students have either never heard of the technical opportunities within their industry (think system integrators) or that there is a negative stigma surrounding their sector (a common complaint among manufacturers). Just as we should educate students about the alternatives that exist outside a four-year degree, we must do a better job of explaining all the career opportunities that are out there in technical fields and fighting the stigma that a lack of a four-year degree can carry.
3. Promoting STEM education at an earlier age.
If we want to get students interested in STEM, we need to start at an earlier age. According to this report from Business Roundtable, 80 percent of U.S. high school students are either uninterested or non-proficient in STEM subjects—numbers that obviously need to change to expand the nation’s pipeline of talent. Lighting an interest in STEM BEFORE high school is a goal that we should aspire to.
At my firm, we have run numerous corporate philanthropy initiatives through our non-profit charity, the Blue Heart Fund, to get students interested in STEM as early as possible. For example, we have taken local elementary schools to the Houston Museum of Natural Science to spark an interest in STEM. In order to maintain an interest in STEM, we recently handed out five $10,000 scholarships to Texas High School students pursuing a career in STEM, and will be giving out 20 additional scholarships to the children of our CPA and industry partners seeking a career in STEM fields.
While there is no magic bullet to solve the skills gap, these three reforms could go a long way in improving STEM education and in providing the skills needed to prosper in our emerging tech-based economy.
About the Author
Dhaval Jadav is Chief Executive Officer of alliantgroup, America’s leading provider of credits and incentives to businesses of every size. Dhaval co-founded alliantgroup in 2002; since its inception, his passion to help and serve U.S. businesses (and their CPA firms) has resulted in alliantgroup assisting thousands of businesses claim powerful cash-generating credits and incentives.