Strategies to address falling wages and skills gaps
Friday, March 03, 2017
The McKinsey Global Institute recently reported that incomes were flat or fell for two-thirds of households in 25 advanced economies between 2005 and 2014 — an explosive increase from less than 2 percent in the previous decade. While it is widely assumed that the next generation in these countries will have as good or better quality of life as the last, the disturbing trend of falling or flat income threatens that expectation.
This complex trend impacts individuals and their families, and lower economic growth means less money will be available to buy goods and services. This trend also presents challenges for those who are responsible for improving organizational and individual performance.
McKinsey points to several systemic factors that are driving the trend:
- The rise of technology replacing jobs. Jobs — even "knowledge worker" jobs — are increasingly being automated. These changes increase productivity, but employers, in general, are not increasing wages of workers from these savings or investing in training or "retooling" their employees for changes in work.
- Jobs moving out of the country through trade or off-shoring, such as the long-time trend for call centers. If employers turn to foreign sources for workers with skills they need, as opposed to forming the partnerships needed to prepare local workers for their jobs, it contributes to the overall problem of local worker shortages in some skill areas.
- More than 200 million people no longer living in their home countries. While not as big a factor as technology and trade, this source of workers tends to drive wages down.
- Skills gaps in talent pools for high-demand jobs.
Combine these factors with others — such as people living longer with not enough retirement resource and the cost of healthcare — and the issue becomes a truly "ill-structured problem," a challenge with many causes and many potential solutions. This is where the role of the human performance improvement practitioner can be valuable.
An example is a group of school systems, employers, community organizations and post-secondary institutions coming together in the state of Georgia to commit to working together on this ill-structured problem. As a community of practice, they are using the McKinsey research, along with other international, national and state studies to frame the issue and work together to address these issues for their communities.
The groups will engage the larger local community to define a "well-rounded education," as will be required by the Every Student Succeeds Act (ESSA). Once defined, they will work together to determine how to deliver on this aspiration so that every student is ready for learning, career and life — and that the workforce meets employers' needs.
In each working group a certified performance technologist and a certified school improvement specialist facilitate the collaborative learning and working.
Global issues may not typically bubble up in school systems as contributing to local challenges. The work of the community of practice ensures that the lens of human performance improvement is used to analyze needs and performance factors through the lens of the marketplace, workplace, work and the workers both by school systems and their stakeholders.
As a result, the responsibility for students' readiness for careers and life moves out of the box from a school-owned responsibility — typically called "school improvement" — to a broadly-owned, collaborative, performance improvement responsibility.
The principles and practices of human performance improvement provide structure to the working groups so they are well-grounded, planned, evaluated and provide the needed results for all partners. School improvement facilitation standards are applied to ensure that the collaborative work is effectively guided and implemented with fidelity so results are sustained over time.
At a time when the quality of life of many nations and communities is appearing to be trending down, human performance improvement practitioners have the opportunity, and perhaps the obligation, to use their skills to help their organizations to engage in addressing ill-structured problems for the common good.
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