Finding qualified workers has become a chronic and deeply concerning struggle for U.S. employers, but as our guest on this episode of WorkforceRx sees it, this is a self-inflicted problem. Byron Auguste, a PhD economist and former White House economic policy official, says the skilled workers are there but are routinely screened out of the applicant pool by hiring processes that only consider those with college degrees. “When you exclude people who don’t have a bachelor’s degree, you’re excluding almost 70 percent of African-Americans, 80 percent of Latino and Latina workers, and almost 80 percent of rural Americans of all races,” he says. That’s why the non-profit he co-founded and leads, Opportunity@Work, is asking employers to dip into the overlooked talent pool of the 70 million Americans who are Skilled Through Alternative Routes (STARs). “This is the golden age of new ways to learn new skills, and yet you have these very old, backward-looking bases for hiring. We need to have hiring catch up to learning.” Check out this compelling and thought-provoking conversation with Futuro Health CEO Van Ton-Quinlivan on transitioning from a pedigree-based to skills-based approach to hiring.
Van Ton-Quinlivan: Welcome to WorkforceRX with Futuro Health, where future-focused leaders in education, workforce development, and health care explore new innovations and approaches. I’m your host, Van Ton-Quinlivan, CEO of Futuro Health.
As our economy attempts to recover, the labor market is tightening up again and employers are once again complaining that they can’t find qualified workers. We’ve heard this referred to as a skills gap, but our guest today describes the problem instead as an opportunity gap. As Byron Auguste sees it, the skilled workers are there but they are routinely screened out of the applicant pool by hiring processes that only consider those with college degrees. The nonprofit he founded and leads, Opportunity@Work, is asking employers to dip into the overlooked talent pool of 70 million Americans who are Skilled Through Alternative Routes (STARs) rather than through a four-year degree.
His perspective is informed by a wealth of experience in the private and public sector, including serving in the White House as Deputy Assistant to the President for Economic Policy, Deputy Director of the National Economic Council, and partner at McKinsey & Company. Thanks so much for joining us today, Byron.
Byron Auguste: Thanks, Van.
Van Ton-Quinlivan: I’ve known you now across three jobs: McKinsey, the Obama Administration, and now in your role as CEO of this nonprofit. Can you start by giving us an overview of Opportunity@Work, and tell us what compelled you to start it?
Byron Auguste: Well, Van, Opportunity@Work really is kind of a utility for the job market to help us transition from what has become a very exclusionary, and if you will, a degree-based and pedigree-based sort way of thinking about hiring to a much more inclusive and much more skills-based — and therefore much more adaptive approach — that actually fits the kind of dynamism that we see in the workplace.
So, first of all, we work with academics and economists and with large data sets to actually identify where are the skills. In particular, what are the skills of the 70 million Americans who are Skilled Through Alternative Routes, and how do they compare to jobs? That’s been really, very productive to help understand where the skills are. And then how does it move to the labor market today? What can we do differently? So, that’s the data of where the opportunity is, and where the opportunity gap is.
Then we help bring employers who want to hire STARs together with the wide variety of ways that they can find STARs. Whether it’s training programs or credentials, or assessments of different kinds, or simply learning what other employers are doing. We do that through our Stellarworx STARs Talent Marketplace which is in three cities and is expanding throughout the country.
Then finally — because this work is hard and even employers that are trying to do it have to work through their own systems — we have a STAR studio where we work often in partnership with IDEO to help companies and training programs to basically design pathways for jobs that are new to the world, or indeed for jobs that everyone can agree: “Well, we really should be able to hire more inclusively, but we haven’t been. How do we change the pattern?” So, we do that work that reinforces each other and we consider ourselves an important part of what’s really an opportunity movement for the mobility of STARs that’s so important to this country.
Van Ton-Quinlivan: So Byron, you mentioned, skills-based hiring. That’s a very new concept. What’s an example that illustrates transferable skills people may have if they’re in low-wage occupations that can make them successful at higher level jobs despite not having a degree?
Byron Auguste: Well, you know, when you dive into this, there’s a lot of great examples. I’m going to describe a couple of the ones that are more common. You have often people who, for example, are doing sales-support roles — maybe they’re in a call center, maybe they’re doing help desk — and they have great customer service skills and they actually learn the products and services they’re supporting.
But maybe in order to move up a level — to be at a more technical help desk, to solve more complex problems — they need an additional level of training or skill or experience or apprenticeship and that’s a good example. Actually, administrative assistants, two-thirds of whom do not have bachelor’s degrees, are really Jacks and Jills of all trades and you end up seeing a lot of opportunities in project management and program management. Those are jobs that typically pay much more and have more of a career path, and that skill set is there.
But there are all sorts of examples including in advanced manufacturing. There’s an example of a company in Colorado that actually recruits from nail salons for manufacturing components because it’s sort of small parts and fine motor skills — just learning how to do things quickly without damaging either your cuticle or the substrate of that manufacturing.
Instead of thinking how can I narrow the pool from which I’m choosing but rather say how can I broaden the pool but really home in on people who might have relevant skills, you get a different set of answers. It turns out to be a much more inclusive set of answers and it solves so many of the problems, the hiring shortfalls, that companies are experiencing today.
Van Ton-Quinlivan: So, if these 70 million STARs are not getting their skills through formal degrees, where are they getting their skills from?
Byron Auguste: STARs are getting their skills in a bunch of places. I would say overall, the biggest place STARs are getting their skills are on the job. That job might be in the armed forces, there’s a lot of people learn there. That job might be as a frontline service worker or someone who is, maybe, in-store retail but kind of helping people resolve problems. I mean, there’s a tremendous number of jobs in logistics of various kinds that actually involve quite a bit of problem-solving. Or it might come up from someone who’s in a technical help desk but then moves on to start doing light scripting, to improve the way a program works. So there are just so many routes by which they can travel.
But there are also complementary training programs, and some of where skills are acquired are in training. The community college system, which I know you’re very familiar with, Van, is a very important source of those skills. There are a lot of community college programs that locally are highly-respected and employers just in their area understand that there’s real value there. But honestly, many STARs learned a lot of their skills in college, they just haven’t completed them. As you know, there are over 30 million Americans who have college credits, who learned things in college, but for whatever reason — the money ran out, family health problems, a variety of reasons — they were not able to complete college, but they still gained those skills.
And so, there are many, many, ways and there should be more. Actually, one of the best investments we have are in programs that don’t just assume someone needs to go back to Go and start over again, but that actually can assess skills and top up the skills that STARs have learned on the job with additional skills — maybe specific software packages they need to learn or things like that — to add to their repertoire and make them even more effective on the job.
Van Ton-Quinlivan: Thank you for giving us details to help us understand. Now, Byron, you describe this opportunity gap as a market failure. Wearing your Ph.D. economist hat, why isn’t the market finding a way to correct it?
Byron Auguste: Well, it’s a great question, and I’m glad you brought it up because people often implicitly think of it as almost like a labor program or a training program problem. But it really is a labor market problem. What I mean by that is in markets, the action really starts when whoever is buying, the demand side, starts to signal what they want. So if you have a market for components for airplanes, that market starts when Boeing and Airbus start to say, “Hey, this is what we need in our plane design.” This has heat tolerance, has stress tolerance, has etcetera, so that suppliers can sort of figure it out.
So in a sense, employers are like the demand side. They’re saying, “Hey, we want to hire workers with particular skills and experiences.” Well, that’s the idea. But in fact, what they do is they mostly say, “Hey, we want someone who has a bachelor’s degree and x years of experience,” and then they have 300 keywords in their job description and they all kind of do it that way. So, they narrow the pool before they even get started. Because, Van, it would be one thing if they were saying, “We find on average that people with bachelor’s degrees do better at this job.” Maybe that’s right. Maybe it’s wrong. But what they’re doing instead, when you put on a bachelor’s degree screen, you are using that screen to blind yourself intentionally to what those without bachelor’s degrees have to offer.
So if an employer is saying they need skills but they start by excluding people who might have those skills, and in very large numbers — I mean there are more STARs than there are people with bachelor’s degrees in the workforce — well then that’s not really a skills gap or at least you don’t know it’s a skills gap. Our argument is, “Look, if what you’re looking for is skills ask for skills, and if you need to narrow the set of people that you interview, which of course you do, don’t narrow it based on pedigree if you’re looking for skills, narrow it based on demonstrations of skills or evidence of skills. That evidence can come through competency-based credentials that don’t depend on the number of years but on demonstration of what you can do. It could also come from experience with training programs that consistently deliver on that, which some companies like, or it can come from direct assessment, and companies typically assess people before they hire them. Instead, they screen then assess. Well, why not assess first and just make that the screen?
So, there’s a variety of ways you can do it. But you have to start with, “If we’re really looking for skills and we’re really looking for talent and we know that talent is everywhere, and we now start to understand that skills can be acquired in so many ways through so many alternative routes that we’re not going to narrow our search, we’re actually going to broaden it and we’re going to use technology and information in the marketplace that Stellarworx and Opportunity@Work is bringing and others do too,” that’s what we’re saying. Employers that are taking that approach are finding quite a bit of success actually, in that talent pool.
Van Ton-Quinlivan: So, Byron, let’s say I have an employer who’s willing to take the risk to hire somebody based on skills and not degrees. How would I signal to that person that I have the requisite skills? On a previous podcast, our guest from New America, Shalin Jyotishi, discussed the concept of Learning and Employment Records. Is that an answer?
Byron Auguste: Well, there’s actually a lot of answers. But I would say first, if an employer says to me maybe I’ll take the risk of hiring people, I’d say right now you’re taking the risk of excluding people that could be great at doing your jobs. You’re taking the risk every day of missing talent that you need. So, I think it’s much easier to think about the risk of doing something that doesn’t work out than it is to think about the risk of not doing something that doesn’t work out. Everyone is afraid of having a bad hire but no one even knows all the good hires that they never looked at, and that actually is costly to them. So, I would just sure say to them, first of all, I’m helping you move away from the risk that you’re currently taking.
Once you’re trying to do it, then I do think it depends on the employer. I don’t think there’s a single right answer for every employer in every situation, and it’s partly because employers have certain types of comfort. For instance, some employers tend much more to think about this almost like it was campus recruiting, right? They think about — for entry-level jobs — schools they feel confident about in their programming. And for those employers, the right answer might be to find alternative routes in which they feel confident. So, okay, you like Penn State, maybe you like Per Scholas too. And so, one of the things we try to do at Opportunity@Work Stellarworx Marketplace is to make it a place where it’s kind of a one-stop-shop, where they can tap into different programs. They can learn about them, they can try them and as they discover, “Oh yeah, there are some great people here that we want to hire,” they can sort of favorite them, and so they see that talent pool. So that’s one way.
But then, other employers are more focused on a set of competencies and they think that these bachelor degree programs represent those competencies. Well, that’s fine. So now describe what are the competencies that you’re looking for and those competencies might be embodied in certain credentials and if they’re not, you might create those credentials, right? Because really, all a credential should be is a reliable marker of someone’s competencies. So, I do think that those have a very big role to play.
Then there’s a whole range of assessments of hard skills and soft skills. In software development, for example, you have lots of ways. You have your GitHub Portfolio, you have your skill score, you could be on HackerRank. There’re so many ways to assess someone’s skills and there’re so many ways for people to learn new skills. I mean, this is the golden age of new ways to learn new skills and yet you have these very old, antiquated kind of backward-looking bases for hiring. So we need to have hiring catch up to learning because, actually, people are learning a lot every day and I think this sort of recruiting and hiring has calcified a bit.
Van Ton-Quinlivan: I actually want to invite you at this moment in time to go 10 years out. I would love to hear you look backward and tell us, what do you see in the future of work, and what do you see in the future of higher education?
Byron Auguste: For the future of work, I’d say three things: The first thing is, there’s going to be a lot of work to do, Van. This idea that some people have, that we’re going to run out of work in the next 10 years…I don’t know, maybe in the next thousand years? But like in the next 10 years? No way. Work is solving problems, and last I checked, we were not running out of problems. Seriously, look around you, are we running out of problems? I don’t think so. Work is caring for people, work is educating them, it’s entertaining them, it’s building things, it’s fixing things, it’s inventing things, it’s improving things. There’s so much work to do, and so the issue is are we going to organize our institutions — both our companies, our markets, and our government — so that we can actually have the people who need to solve them, supported, rewarded, educated, so that they can do it, and they can bring their best selves. So that’s number one.
The second big thing in the future of work is that technology is really not the problem. The robots are not going to take your job. Of course, robots and other forms of technology are going to be part of how we get work done, and they have to be part of how we get work done so that we can continue to improve productivity and the like. It’s so interesting…robots themselves require so much human partnership in order to actually accomplish their goals. There’ll be massive new categories of work tuning robots, training robots, supporting them, making sure they don’t do something stupid.
And here’s my third point: The talent to do this work is so widely distributed and the skills are, too. Take that robot example. Many of the jobs that will be complementary to robots and working with robots…these are not going to be computer science jobs, right? Some will, but a lot of it will be jobs that look a lot more like, say, in a factory with programmable logic controls, things that factory workers use all the time now. It’s like mainstream in advanced manufacturing. But it’ll also be, frankly, activities that look like home healthcare or that look like elder care or look like personal training, honestly. So, there’s a very wide set of people with the relevant skill sets.
If the future of work looks like the disaster that some people think it will, it won’t be because there’s not enough work to do, and it won’t be because of technology. It’ll be because we didn’t get our act together in our institutions to actually think about people the right way, to make our systems adaptable, like people are adaptable. People are extremely adaptable, way more adaptable than robots, by the way, and we actually need people fully empowered in order to solve the problems at the pace that we need. If our institutions don’t allow that to happen, well then it might turn out badly, but there’s no reason it has to.
On higher education, which you asked about, I think one of the strengths of higher education in this country is its tremendous diversity. But at the highest level, I think much of higher education has to decide whether its main role is learning and it measures success by how much it enables both individual students and disciplines and fields to learn and break new ground, or whether it is going to be primarily judged by, well frankly, by how many people it can exclude. Because today, if you want to get to the top of the U.S. News & World Report rankings, the most important thing that you can do is exclude as many people from the benefits of your education as possible. That is what drives you to the top of those rankings and that is very counterproductive.
I think higher education should expand seats. There’s much more need for learning, I think higher education, including universities, play a very vital role in transitioning to a future work, but they’ve got to think of themselves not as just, “Let’s find the wealthiest seventeen-year-old with the highest SATs, and put a stamp on them for four years” and think about how do we bring this amazing capacity that we have and bring it to everyone, frankly. And that anyone who can benefit from that learning in the aggregate can take part in it. It’s not the university’s issue, it’s more of the employer’s issue that learning can then lead to earning, that those skills can be recognized, no matter where, how they were created.
That is not a problem that we can’t solve. If you look at what we’re able to do with information in the level of detail…I don’t really need to know what my former high school classmate had for breakfast this morning, but I can find out if I want to on social media. But it’s a really much more important use of that granular ability to use information to understand, ‘Hey, where can I find someone who can actually do this job and not just all the usual suspects?” That is going to give us a more innovative society but absolutely a more inclusive one too. Because when you exclude people who don’t have a bachelor’s degree, you’re excluding almost 70 percent of African-Americans, you’re excluding almost 80 percent of Latino and Latina workers, and you’re excluding almost 80 percent of rural Americans of all races. A society and an economy that blocks opportunity for that many people before you even give them a chance to show what they can do; a society where for every dollar a business is putting into inclusion initiatives it’s putting a lot more dollars into systems that systematically, automatically exclude…that is not a society that I would want to bet on to unlock all the talents, to solve all the problems, and to actually win in this world of innovation.
Van Ton-Quinlivan: Your point on exclusivity is very provocative. Let’s end on this question, Byron. You say that we’re not running out of work. Why do you think there are experiments on Universal Basic Incomes or Guaranteed Pay that are occurring right now?
Byron Auguste: Well, Van, we’re not running out of work, but we have tens of millions of people in this country that are working — including working full-time — and not really earning a living wage. So, I think the idea of a universal basic income can be seen in that light. If you’re supporting universal basic income so that everyone can live with dignity and the transitions in life can be buffered and that people can make different choices, I think that’s a very reasonable argument. I think that’s a good reason to think about basic income and to work through all the ways that it interacts with our other social systems and work. I think that’s a very legitimate debate.
What I would not accept is the view that says we need universal basic income because humans will be obsolete. I don’t think that’s a good reason at all. Where I sympathize with people who are focused on basic income is I also don’t think we should be in a world where when people find what they want to do — not at 17 maybe, but at 27 or 37 and there are new opportunities — they should be able to reset and to really push to a next level. That should be available to everyone. That shouldn’t be just based on do you have the family or generational wealth to do it. So, I think, it’s a very legitimate debate, but I don’t think it’s a debate that we should have because we’ve run out of things for people to do. That’s absolutely not the case.
Van Ton-Quinlivan: Well, I wish we had more time with you but, thank you very much, Byron, for being with us today. I’m Van Ton-Quinlivan with Futuro Health. Thanks for checking out this episode of WorkforceRX. I hope you will join us again as we continue to explore how to create a future-focused workforce in America.