02/17/2014 12:31 pm ET Updated Apr 18, 2014

Redefining Education to Close the Workforce Skills Gap

I've heard it time and again: frustrated college-educated millennials bemoaning their prospects in a backwards job market. "I'm applying for all of these jobs that require experience, but how can I get experience if I can't get a job!?" Every year, American graduates, after spending four years in college, discover that they still need to learn more skills, or worse yet, different skills to secure a well-paying position in the workforce.

Please mind the gap: Connecting education with job readiness

Gone are the days when one could graduate college, knowing that rewarding work was available in one's field of study, according to a recent study by Chegg. In fact, only 27% of college graduates are hired for a job related to their major. Higher college enrollment rates, combined with falling job creation rates, have created a daunting and competitive job market. Even triple-threat applicants with direct experience, applicable degrees, and network connections express difficulty with finding well-paying, rewarding jobs.

The effect is an increasing number of disillusioned grads taking jobs decidedly below their level of education. Tracey, a recent Virginia graduate, says "I went through four years of college to work at Wal-mart for minimum wage. By the time I pay my rent, I can barely afford my student loans." Unfortunately, this is the story of many young men and women who graduate college in hopes of securing a well-paid position in their field of training only to discover that their higher education return on investment was far lower than the guarantee they had been led to believe.

On the hiring side, employers are skeptical of recent graduates. Fewer than two in five recruiters who had interviewed fresh grads in the past two years found them prepared for a job in their area of study.

Meanwhile, vocational trades are experiencing what the Manufacturing Institute calls a "skills gap." In a survey of 1,123 manufacturing companies:
• 67% reported "a moderate to severe shortage of available, qualified workers,"
• 5% of current jobs are unfilled due to a lack of capable candidates.
600,000 well-paying jobs unfilled in the face of staggering unemployment rates? How can that be? It's called an unemployment paradox, and it's created by the surplus of labor jobs that require specifically trained skill sets.

Manufacturing isn't the only field facing a skilled labor shortage. With an entire generation of baby boomer engineers poised to make an exodus into retirement, the energy industry is facing a talent drain that educated, but untrained millennials are not yet able to replenish. Similarly, as 75% of the U.S. solar market is projected to attain grid-parity by 2015, the burgeoning solar energy industry has a widening skills gap as it requires more and more positions with particular training requirements that are seldom addressed in a typical liberal arts degree program.

Closing the gap

Failure to equip rising generations with the knowledge and skills required for available jobs could lead to further disintegration of our nation's economy as well as increased unemployment. However, one solution has been put forward: combine the hands-on approach of a vocational program with the convenience and cost-effectiveness of an online education to gear modern learning towards addressing the skills gap.

"School As A Service" (SaaS) conveniently packages and delivers this solution to community colleges and other post-secondary institutions. SaaS allows the partner school to offer skill-based training focused on a specific career path. While this sounds like an obvious answer, many institutions need help developing an easy-to-deploy infrastructure of marketing, enrollment, curriculum design, and training delivery. The SaaS approach is appealing because of its ease of implementation, but also because it bolsters learning centers' job placement rates, as well as diversifies their student body. In a press release, Rasmussen College reports that through a School as a Service program it saved $7.5m in annual revenue, saw 8% YoY increase in new student enrollment and an 8% decrease in marketing spend, and graduated 80% of its students into jobs related to their area of education.

One challenge is overturning the prevailing image of vocational programs as purely gritty and laborious. While it's true that "middle skills" programs may involve more hands-on skills training than abstract classroom study, vocational programs do involve significant creative problem-solving and are linked to feelings of tangible accomplishment and higher job fulfillment. Vocational training also provides certifications necessary for prominent positions like Project Managers or Internal Auditors, which pay well and benefit from heightened job security. A report from the U.S. Census Bureau linked alternative credentials with higher earning potential: "the median monthly earnings for someone with a professional certification or license only was $4,167, compared with $3,433 for someone with an educational certificate only; $3,920 for those with both types of credentials; and $3110 for people without any alternative credential."

Specialties such as solar energy installation, green building operations and advanced manufacturing allow workers to contribute to society, provide value to the workplace, and earn a rewarding professional trajectory. These middle skills jobs are slated to make up nearly half of all new job openings between 2010 and 2020, according to a 2012 HBR Article, which suggests that the onus of closing the skills gap is in the hands of the companies themselves. Companies must start communicating their job requirements to the schools training their future workers. Aided by state incumbent worker training (IWT) grants, companies have every incentive to help develop their employee workforce.

IWT programs do not stand alone. Similar workforce development programs exist for entry, or re-entry, into the job market. But, simply put, there should be more resources, more attention and more programs dedicated to solving this country's structural unemployment problem. According to a fact sheet by the National Skills Coalition, $37 billion of federal funds went toward preparing people for 55 million jobs that require a four-year degree, while only $3.4 billion of federal funds went toward preparing people for 62 million jobs that require middle-skills training.

By focusing on equipping students with the skills to perform today's jobs, School as a Service programs will have a nationwide impact, removing stereotypes about technical pre-professional education, and providing an alternative to four-year, debt-ridden degree programs.

Political, educational and corporate leaders must focus on the forces driving change, rather than stick to the inertia of the traditional educational approach. We must provide students with the resources that they need to accomplish their career goals, including:

• Career-based skill training
• Apprenticeships and Mentorships
• Financial support and low-cost programs
• Flexible time requirements
• Industry and nationally recognized certifications

Closing the skills gap is a matter of awareness and resources. School as a Service has suggested a novel and practical solution which can not only translate company needs to educational institutions, but also provide the resources and infrastructure to implement these programs nationally over the course of the next few years. The question is, can America learn to value middle-skill workers?