Why the Shortage of College-Educated Workers Could Hurt Small Businesses
A new report points out the drop in workers with postsecondary credentials linked to in-demand skills.
A new report from Georgetown University’s Center on Education and the Workforce forecasts a big drop in college-educated entrants to the workforce in less than a decade. In the current weak jobs market, characterized by stagnant growth expectations, booming AI tech displacing entry-level positions, and rising long-term unemployment, it’s reasonable to imagine a labor pool of talented, qualified, and educated people looking for work. But the new study says the U.S. will actually be short of over five million college-educated workers by 2032, just seven years away. What’s going on here, and what impact will it have on your business?
The report calls out a growing skills shortage “in critical occupations due to an unmet need for workers with the postsecondary credentials associated with in-demand skills.” Essentially there’s a widening gap between what skills employers need, and the skills that new workers joining the workforce will have: not enough people will go through college in the near future, learning skills the job market requires.
The shortfall looms largely because of the retirement of 18.4 million “experienced workers with postsecondary education” from 2024 through 2032, the report says. During the same period only 13.8 million people are expected to go through higher education and emerge ready for work with the requisite skills. And even in an uncertain labor market, some 685,000 new jobs that need college-educated workers are expected to be created over the same period.
While widespread across many professions and jobs, the predicted job skills gap is worse for certain occupations. The most serious shortfall the researchers expect for workers of all educational levels, and also the “largest by far for workers with a bachelor’s degree or higher,” will actually be in “managerial and professional office occupations, particularly in management jobs.” Some 2.9 million jobs may go vacant because of a lack of skilled workers, if the prediction proves true. Behind this comes shortages in teachers (over 600,000 missing workers), nursing (over 360,000 workers), and engineering (210,000 people). This skills gap and these potentially unfilled jobs will have “far-reaching implications” for U.S. society, the report warns.
This data backs up some recent reports on the state of the jobs market, including the fact that a trend for flatter management structures is stressing the management staff who remain in post. Meanwhile, dissatisfaction with the traditional college education system may be pushing Gen-Z workers to become more hands-on professionals, like plumbers and electricians, another report says. This could play into the college education skills gap that the new paper expects.
Another factor that may be playing into changing attitudes to higher education comes from new data released by Fair Isaac Corporation — a credit scoring company “used by 90 percent of top U.S. lenders,” according to news site Axios. The company’s data shows that student loan delinquencies have hit their highest level ever, which highlights two things: people’s reactions to a complex, stressed economic climate, and separately, the high price of achieving a college education, with financial bills hanging over graduates for many years.
What are the implications of this job market prediction for your company?
If you’re looking at hiring people with college-level education in the coming years, you may not find as many candidates as you expect to meet your expertise or skills criteria — and this will be a particularly acute issue if you’re looking to fill managerial roles, or your industry is in one of the areas the Georgetown researchers highlighted as problematic: teaching, nursing, or engineering.
One way to hedge against this kind of issue is to invest in training and upskilling your own staff, and encouraging them to stay with your company for the long term. This may be more important than you realize, particularly when it comes to managerial skills. A recent report found that more than half of organizations in a survey provided “little or no training” to prepare workers to take on their first managerial roles.
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This article was written by Kit Eaton from Inc. and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
