Sad state of our educational and HR systems:

The super-dysfunctional state of education and HR in America.

I recently read a great article in FT about the sad state of our educational system in America and may I add the asinine state of hiring (the infamous HR departments still using decades old inapt and impotent tools…) in American businesses.

Our national hiring practices seem to be biased towards school pedigree rather than useful skill sets. Highly qualified labor and soft skill sets are being locked out of the job market for lack of a degree, even if one is not required. The large majority of hiring staff look at a pedigree rather than finding the best match skilled talent.

Many companies complain of not being able to find the skills they need either at the top or the bottom of the socio-economic ladder. Ivy League colleges are great for those who can afford them but most education has become “completely disconnected” from and NOT in tune with the needs of both students and the labor markets.

There are plenty of MBAs who can read a balance sheet and a financial statement but have neither operational, organizational, innovative nor soft skills. Four-year business administration graduates are settling for low wage gigs, while $20-an-hour manufacturing jobs go unfilled because employers can’t find anyone with vocational training and the proper skill sets.

The stakes in this game are very high, and with technology continuing to outpace the education system, there is no room for mediocrity. We aren’t training people to be entry level. We are training them to be rock stars and expect to make a load of money. With the demand for a skilled workforce continuing to increase, we have reached a point in which industry (particularly tech) must move off the sidelines and take an ownership role in educating our citizens. Without participation from industry, the education system cannot meet the constantly changing requirements for a skilled workforce. This is a difficult but necessary step for our society to remain self sufficient and sustainable.

Employers are increasingly worried about finding and holding on to quality, skilled workers and economists warn of a widening skills gap. What are businesses to do? Apprenticeship—that age-old true-and-tried worker-training model that pairs on-the-job training with classroom instruction—is  the solution to creating skilled workers.

According to the Georgetown University Center on Education and the Workforce, by 2020, the United States is expected to face a shortage of 5 million workers who are equipped with technical certificates and credentials. At the same time, about half of U.S. executives at large companies say they are likely to have fewer skilled workers than they need in the short term of the next one to two years. Not surprisingly, employee retention is also a top concern for businesses that compete in the tightening market for skilled workers.

Apprenticeship is a time-tested approach to training and developing skilled labor. In the United States, a formal system of registered apprenticeship is administered by the U.S. Department of Labor. Companies register their program with the department’s Office of Apprenticeship, and, in return, the government issues a nationally recognized certificate to workers at the company who complete an apprenticeship.

But the U.S. apprenticeship system is small compared to those of other advanced economies such as England, Germany and France. Consider that England started 510,000 new apprentices in 2012 while the United States started 147,000, despite the U.S. population being roughly six times that of England. Meanwhile, in Switzerland, 7o percent of young people enter the workforce through an apprenticeship program. Part of the reason for the disparity is that American companies are not familiar with apprenticeship or its benefits, as mentioned in a recent Center for American Progress report, “Training for Success: A Policy to Expand Apprenticeships in the United States.”

Research has shown that apprenticeship offers a myriad of benefits to employers. By investing in talent development through apprenticeship, employers gain a pipeline of loyal skilled workers, increase productivity, reduced churn and improve the bottom line.

Expanding the U.S. apprenticeship system would help strengthen our economy, as research shows that the United States is not producing enough skilled workers to meet our future economic needs. By 2020, America is projected to experience a shortage of 3 million workers with associate’s degrees or higher and 5 million workers with technical certificates and credentials. Compounding our inadequate and dysfunctional workforce development system, research shows that employers are now spending less on training than they have in the past. At the same time, industry surveys show that a lack of qualified workers is a top concern for many employers.

Apprenticeships can help meet the demand from businesses, while offering workers higher wages and better employment outcomes. Evidence on the effectiveness and return on investment for apprenticeships is strong—they are overwhelmingly recommended by employers and lead to significant increases in lifetime earnings and benefits of up to $300,000 for workers.

But expanding apprenticeships will require overcoming a number of hurdles that have thus far prevented their broader adoption in the United States. Businesses must take on significant costs to hire apprentices and are frequently unaware of the benefits they will gain in return. Similarly, workers are unfamiliar with the range of occupations, educational requirements, and salaries associated with apprenticeships. Despite efforts to diversify, apprenticeships remain largely the domain of men in traditional trades such as construction. Our disjointed national system of administering apprenticeships makes it difficult to collect data that would better inform their use and hinders the development of a uniform credentialing system that would provide the most benefit to workers and employers. Finally, unions have invested significant resources into developing high-quality apprenticeship programs through joint apprenticeship committees; a broad expansion of apprenticeships into new sectors and non-unionized workplaces would face the challenge of moving forward without that significant expertise and support.