The Great Skills Mismatch

Despite persistently high unemployment numbers, companies are struggling to find engineers and skilled laborers. What’s behind this gap—and what can today’s CEOs do to find the talent they need?

February 26 2013 by William J. Holstein


American CEOs have been complaining for at least a decade that they cannot find workers with the right skills, so it is surprising in many ways that relatively obscure community colleges are emerging as part of the solution. “I call it the silent crisis,” says Cheryl L. Hyman, chancellor of the City Colleges of Chicago, which is working with CEO Pelke. “Typically over the past decade, in discussions about the role of education in economic recovery, there has been a big focus on kindergarten-through-12th grade and the role that four-year colleges play. But there was little, if any, conversation about this very valuable asset in the middle known as community colleges.”

Kay Manufacturing’s Pelke is working with Daley College, one of seven community colleges that are part of the 120,000-student City Colleges of Chicago system. It launched a College to Careers program about a year ago to address all three pieces of the skills mismatch. The program is targeting six industrial sectors that need workers—health care, manufacturing, hospitality, distribution and logistics, business services and information technology. Two Kay employees are currently enrolled in the manufacturing program at Daley College, focusing on computer numerically controlled machining. Pelke is paying their tuition, and he also sits on an advisory council to improve the college’s curricula. He’s even sending his maintenance people to Daley for training because the college has a building dedicated to showing them how to service systems that the company uses. “It’s a two-way partnership,” he explains. “I can take their graduates and I can send my people for training.” He says he prefers hiring people out of Daley College—as opposed to four-year engineering graduates—because “their students are out there getting dirty making parts and that’s what we need.”

It may seem unlikely that SME CEOs are taking the time to get involved in education, but it seems essential that they become the architects of relationships with community colleges because only they can articulate their range of needs and move their full organizations to embrace the community college relationship. “The higher the level of the collaboration, the better the outcome,” says Eileen Cardile, CEO of Underwood Memorial Hospital, which has an extensive training and retraining relationship with Gloucester County College in Sewell, New Jersey.

Undeniably, there can be some red tape in working with a community college, but the payoff can be great in terms of getting state funding to defray the cost of training and retraining, says Susan Muha, executive vice president of Cuyahoga Community College (Tri-C) in Cleveland, Ohio, which has won national recognition for its training and retraining efforts. “Large companies, like a Ford, have more resources and more clout to be able to get money from the state to be able to put their agenda together for training,” she said. Ford expects to win $1 million in state grants to train 750 people over three years. “Medium and smaller size companies don’t have a specialist to keep up with where the training dollars are and how to access those dollars,” Muha says. “That’s more of a challenge for them.” Smaller companies also are more focused on the here-and-now as opposed to giants that can develop three-year plans.

Some community colleges will work with an SME CEO to tap into state or local workforce development grants, which spares the company from having to do that work. In other cases, companies proceed without any state funding, still finding it cheaper than on-the-job training done in house.

In general, there is broad experimentation taking place across the country between smaller companies and community colleges. In some cases, as with Gloucester County College and its new program for the petrochemical industry, multiple employers that are not directly competitive with each other can work with a single community college to create a stream of graduates that the companies then compete to hire. In other cases, a community college partners with other educational local institutions and chambers of commerce to service the needs of a specific company or industry.

Will these efforts prove to be enough to eliminate the great American skills mismatch? Not yet. Community colleges are constrained because they are attempting to address multiple challenges of their own—teaching students who want to go to four-year institutions and providing instruction to large numbers of immigrants trying to learn English and other remedial subjects. State and federal funding is flowing to community colleges but at nowhere near the level that would be necessary for a quick fix. Clearly, it will take years for small and medium sized companies’ CEOs to address their looming skills mismatch, assuming good will and cooperation from all involved. However, they seem to be headed in the right direction. The bottom line? It makes sense to strike up training and retraining partnerships with community colleges.