
Matt Sigelman, President of Burning Glass Institute: Will AI Start Careers In The Middle?

PODCAST OVERVIEW
Transcript
Van Ton-Quinlivan:
Hello, I’m Van Ton-Quinlivan, CEO of Futuro Health, welcoming you to WorkforceRx where I interview leaders and innovators for insights into creating a future ready workforce.
There is encouraging news for those without college degrees: nearly two million workers who went straight from high school into the workforce are now earning six-figure salaries. That revealing statistic — plus details on what kinds of jobs provide that level of upward mobility — are part of a recent report from Burning Glass Institute on so-called launchpad jobs.
Joining us today to discuss these findings, plus a new British opportunity index and research on how AI tools and skills will impact the workforce, is the president of Burning Glass, Matt Sigelman, a pioneer in the field of real-time labor market data.
Matt joined us two years ago to share similarly interesting research, and I’m delighted to have you back on this podcast. Matt, thanks for coming on.
Matt:
Thank you so much. It’s always great to be together.
Van:
So before we get to the Launchpad Jobs Report, I’ve been dying to ask you this question: how will AI skills and AI tools play out on the job?
Matt:
So, there’s two sets of tug of war that I think are worth tracking and that we’ve been doing some analysis of. The first is this debate between whether AI is going to open access to better opportunity for more workers or whether it’s going to actually concentrate opportunity with experts as technology has tended to do in the past. The other is an ongoing debate between whether AI will be more of an augmentation mechanism that makes people more effective, or whether it will be more of an automation mechanism that makes people more efficient by typically getting rid of jobs.
Let me share some of what our research is suggesting on each of those in terms of this debate of how AI changes access to work. As listeners no doubt are aware, there’s some experts who are saying, “Hey, look. AI could really open the field to people who in the past have been held back from good jobs because they don’t have the domain expertise or they don’t have the language abilities to be able to take on those jobs.” Seen that way, AI could really be an important enabling force. Jobs that you need English language proficiency for today…that could be a lot less important in the future in jobs where there’s just a bunch of stuff you’ve got to learn and it takes a long time.
There’s been some good experiments with chatbots in contact centers and the like. What they find is that people can get to sort of a minimum standard of proficiency pretty quickly. On the other hand, that’s not how technology has tended to work in the past. In the past, the people who understand the technology, who are more skilled, tend to wind up better off.
And so here’s what we did. We tried to understand how people accrue expertise in a given job and we found that the shape of the learning curve in any given job plays a big role in which side of that tug of war you land on. There’s some sets of jobs where there’s a bunch of learning — there’s sort of a level of expertise you need to get into the field — but over the course of somebody’s work life, their productivity is not going up all that much. These are often jobs where good performance is a ceiling more than a floor.
That seems like a weird idea, right? But if you’re a fry chef, good performance is don’t burn the fries. If you’re a bus driver — you have to learn how to drive the bus — but once you’ve learned, don’t crash the bus, and stay on schedule. Somebody who’s been on the job a year and somebody who’s been on the job for twenty-five years is essentially performing the same task.
Those are jobs where we can expect – well, maybe not the bus driving because you have to take an exam and whatever — that AI can actually help people get into the job faster. But there’s some sets of jobs where when you look at what’s the difference between somebody at the entry level and somebody who’s much more advanced in their career, there’s a huge difference in productivity and you can see it in how much money people earn. A good data scientist makes two or three times more than somebody at the entry level.
What that tells us is there’s also a bunch of jobs like that where a lot of the skills that are most exposed to AI are ones at the entry level and a lot of the things that are accrued over time is this sort of intrinsic learning that’s hard to replicate. That says that the experts become more at a premium, but the bottom rungs of the career ladder get knocked out and that raises a bunch of really important questions of how do we train people to start their careers in the middle instead of starting at the start.
We can see a whole bunch of fields where there’s a lot less entry level opportunity. Think about this morning at your breakfast table and you were looking at the milk carton. There was probably a whole, long paean to the beautiful meadow in which the cows were grazing to produce this creamy, wonderful milk. I’m sure there was a marketing assistant who was very proud of that copy. I hate to break it to that marketing assistant, but ChatGPT could have probably done it just as well.
The problem is that the way you go from being a marketing assistant to being a marketing manager is by writing a lot of copy and eventually understanding what different audiences need to hear. How do you get that proficiency? And so I think there’s really questions here both for how AI helps people get into work, but also for whether people can move up within it.
I mentioned as well this debate on automation and augmentation. I’ll just share a quick thought. This is what surprised us most in that work. When we started modeling it out, looking at which skills get automated which get augmented, we found that there were some skills that were coming to the top of both lists. When we first saw that we were like, “Okay, we screwed something up here. Clearly a skill should either be automated or it’s augmented. It’s not both.”
And then we realized that actually it wasn’t a mistake. There’s certain sets of capabilities where AI makes you both more efficient and more effective. Think about data skills, a bunch of communication skills and the like. Those are going to be the new power skills of the 21st century workforce. Those are the sets of skills which position you to be more effective, to be more efficient, to be more valuable to yourself and to your company. I think it’s going to be key to make sure that people know what they are, and that we’re providing the mechanisms for workers who are already in their careers to acquire them and stay relevant.
Van:
Thank you for the great insights and additional guidance. I love the phrase that you brought up, which is how to train people to start their career at the middle. I think that should be a future report for the Burning Glass Institute!
Matt:
Look forward to it, maybe with your partnership!
Van:
So, please add to that very brief description of the Launchpad Jobs Report and tell us what the key findings are.
Matt:
First of all, just to give a view to what we did, we looked at the careers of millions of people who went straight from high school to work and we tried to figure out what happens to them. There’s a lot of talk today about the need for strong alternatives to college and what we wanted to be able to see is can people be successful without going to college?
The good news is the answer is yes. Not only are there two million people who are earning six figures in the workforce without having gone to college, we know that actually the top 20% of people who go straight to work after high school and don’t earn a college degree, earn the same as the median college graduate. So that says that it’s very possible to do well in your career without going to college.
But what we also found is that how you start has a big bearing in how well you do. Over time, we found that there’s a certain set of jobs, which we call “launchpad jobs,” which make you four times more likely to wind up in top earning quintiles by the time you’re forty. Conversely, there’s another set of jobs which are providing a poor start, which make you four times more likely to wind up at or near poverty by the time you’re forty.
What we find is when you look at those jobs that are launchpad jobs that provide students with really good upward trajectories to start their careers, often it’s hard to tell them apart from the jobs that represent a much worse start. So that’s one point — I’ll get to that in a minute. But what we also find is that a lot of those jobs are jobs that require skills, and so it’s possible to get them as an eighteen-year-old. We only looked at jobs where eighteen-year-olds coming out of high school are getting those jobs.
But what we discovered is that if you’re looking at jobs like power plant operations, or on railroads or an array of opportunities like that, these are jobs that require training. They require skills. And so it raises questions about how effectively are we preparing students for their careers in high school today? So, part of it’s about the training, but part of it’s about what kind of advice students are getting and what kind of navigation resources they have.
I mentioned a minute ago that it’s hard sometimes to tell a good start apart from a poor start or even have jobs that are in the middle. Sometimes, two jobs pay the same and lead to very different places. Take the example of two jobs that pay the same. If you come out of high school and you take a job in the back of a restaurant, you make about on average $23,000 a year, or likewise, cleaning rooms in a local hotel. You’d make the same or actually slightly less working as a restaurant host making $22,000 a year or taking tickets in the movie theater.
The people who started out in the back of the restaurant, by the time they’re forty — through all the twist turns and tangles in their careers and whatever job they’re doing at that point — on average, they’re making in the low $30,000 range. So, they make a bit more than they did when they started. The people who started out started taking that job in the front of the restaurant as a host or taking tickets in the movie theater make in $70,000 range. And there’s nothing right now that’s telling a student which job is which, and that’s a problem.
Van:
The finding is so interesting. I’m trying to figure out, well, how does that change the advice I would be giving to my niece or nephew? Matt, what are your thoughts as you’re reading these findings?
Matt:
So I think there’s the question of what advice to give your niece or nephew, and there’s also the question of what advice do we have for education officials, for school district administrators and for policy makers?
I’d say for students, the advice is really to invest the time in trying to think about what kinds of jobs you might be thinking about if you’re not thinking about going to college, and to really invest the time before you get to June of your senior year into saying, “Okay, what would I need in order to gain access to those jobs?” Throughout their high school years, students are making decisions that impact their readiness for different kinds of jobs. Not every school district makes you take math throughout four years of high school and there’s a lot of kids who will say, “Hey, look, I’m going to become an automotive service tech. I’m not going to need math.”
Well, actually, to get an ASE Tech certification, typically you need what’s called industrial math. And so there’s a lot of students who are getting off track and diminishing their chances of getting a launchpad job through choices they’re making without realizing they’re making them. So that’s the advice I would offer to students… is really start thinking ahead to what some of the possibilities might be that are interesting to you and think about how you could accrue those skills, whether online, whether by looking at the career and technical education options within your school or through other means like dual enrollment programs with community college.
But I think it also says to policymakers and to school officials that we need to be giving a lot of thought in two directions. One, how do we provide guidance in schools that is typically mostly about college guidance. And that’s not surprising, right? High school advisors are people who themselves went to college and probably didn’t work as an ASE tech and therefore find themselves less well equipped to provide that advice. And of course, we all know that high school guidance counselors are famously overworked and overloaded and spread thin.
So we need to be able to equip our guidance counselors to be able to support students who aren’t going on to college and that means giving them information and it means making sure that they’re aware of the options that are out there and of how they tie back to students’ academic choices along the way. It also means investing more in guidance resources because more students need those options and potentially equipping students with or providing students with access to online tools that can enable them to do some exploration for themselves.
But what it also says is this framework we’ve got today for students to prepare for careers while in high school — and these are programs referred to as CTE programs or Career and Technical Education programs – need to be re-evaluated. The notion behind CTE is that you’re going to earn a what’s referred to as an “industry-recognized credential” while you’re in high school, and that’s going to prepare you to make a more effective transition into the workforce. These are credentials which, at least theoretically, employers are looking for, but we haven’t set any specific standards around what constitutes what is industry recognized versus what’s sought. And what we find from some past research that we did in partnership with ExcelinEd, is when you look at all the credentials students are earning while in high school today, only about 18% of them are actually in demand and lead to high value, high mobility jobs.
In the last year that we looked, there were 7,000 students who earned the National Pork Council Safe Pork Handling Certification, right? So, a lot of what we’re equipping students to do, and a lot of the credentials that we’re helping them acquire, don’t necessarily lead to jobs that are going to take them to high levels of economic mobility.
Van:
Matt, are you suggesting, for example, that there is a space where if the skill sets or the credentials are sought, but in low supply, that’s the opportunity where you can have much higher income even if you don’t have formal college degrees?
Matt:
That’s right. I mean, I think there’s two questions here. Are the credentials sought and are the jobs of value? And to your point, sometimes a credential that’s sought is sought not necessarily for large numbers of jobs, but they may be high value jobs. There’s plenty of credentials out there, though, that employers need and which go under supplied. So, we can talk about how do we create new credentials in the market, but there’s a lot of places in the market where we can just add water, where we can say, “Hey, look, this is a credential that employers are asking for. There are good jobs at the end of the rainbow and let’s just make sure that more students are acquiring those credentials.”
It’s interesting, there’s a profusion of credentials out there, which is a little bit different from what is sometimes claimed. There’s a lot of people who say, “Look, to move to more of a skill-based world, we need to have better credentials for signaling what skills people know.” The Credential Engine Project catalogs 1.2 million credentials. What we found is that 90% of job postings that ask for a credential ask for one of the top 200. So the universe of credentials that meet the “Meow Mix” threshold — like Meow Mix is the cat food that’s so good cats ask for by name and the credential is so good that employers are asking for it by name — the share of credentials that actually meet that threshold is very low. And when we know that there are good jobs and there’s credentials associated with them, we need to be investing there.
Van:
So I’m sure our listeners are curious in terms of what is that space? Could you give some examples of credentials or career paths that are in that space so a student without a formal college education can access some of these high paying jobs?
Matt:
So there are a range of credentials that work. We know that there’s various kinds of certifications and licensure around aerospace, avionics and aviation technicians. We know that things like CompTIA A+ certification, which prepares students to take a job on an IT help desk, which is a good way to bridge into a tech career. As you know from your work, Van, there’s good places to enter the healthcare space and there’s less good places to enter the healthcare space and we know what those are.
Interestingly enough, by the way, what we find is that sometimes some of the kinds of jobs that are out there that offer good stepping stones to students are jobs that people might not be thinking about. Combat infantry roles in the military have a pretty good track record of upward mobility. Sales rep jobs are significantly higher value than I think people might assume because of the skills that a student’s going to accrue through that work and the ability to relate to people, to anticipate their needs carries across in a lot of contexts.
That underlies another set of findings, and I know that you see this in your work at Futuro Health. A lot of what makes a job a launchpad is not so much the characteristics of the work, but where it leads to next. I think there is a little bit of a mistake that we’ve had in the discourse around what constitutes a high quality job. A lot of that discourse to date has really been focused pretty much exclusively on wages and benefits — and of course wages and benefits are really important — but a job is a high quality job, not only if it pays well and offers stability, but also if it offers a ladder up. So sometimes, even lower wage jobs can be a good starting point if you have a clear structure for helping you advance beyond that starting job.
Van:
That’s a really good insight. Thank you, Matt. And so the converse of these ladder-up types of jobs, good starting points, could you just tell us a little bit about roles that lead people into poverty and more about that side of the equation?
Matt:
So what we’re finding there is that a lot of the kinds of jobs that set people out on a road that makes them more likely to wind up poorer aren’t necessarily jobs that don’t involve skills, but they’re jobs where the skills you acquire aren’t transferable to better paying fields. I mentioned the example before of somebody who takes a job out of high school and cleans rooms in a hotel. That’s hard work and I know I would fail at it. The problem is not, therefore, that these are people who aren’t learning how to do something that’s hard, but where do you take that skillset? And outside of janitorial and other kinds of housekeeping-type contexts, that skill set doesn’t serve you that well in the job market. It doesn’t provide entree to better paying jobs.
That’s why the kid who starts out taking tickets in the movie theater, which is hardly a high skill job — in fact, I think it’s a much lower skill job probably — but that’s why she actually ultimately goes on to earn much more. She’s learning customer service skills, she’s using the computer system, she’s doing other sets of things that she can parlay into a better next step.
Van:
Those are excellent examples to give us a feel for the difference in the starts. Now, Matt, at the end of 2024, you also released the British Opportunity Index showing which firms are creating the most mobility for the workforce. This mirrors the work that you’ve done on US companies as well. What are the top line findings in that research and how are you hoping that the research will be utilized?
Matt:
So I think first and foremost, what it tells me is that corporate practice matters. Just to sort of level set for our listeners what this work is about…what we did in the American Opportunity Index and we continued in our partnership with The Economist on the British Opportunity Index is we tried to observe what role do companies play in the mobility of their workers. We track the careers of millions of British workers, and tens of millions of Americans, to be able to say who achieves economic mobility and who doesn’t, and how does that relate to where you work?
From some of our past work, we’ve found that actually the company you work for plays a very big role in your prospects for how well you can advance over time to the point that you can have two workers in exactly the same role at directly competing firms who have entirely different prospects for moving up. And so the Opportunity Index is our attempt to measure that. First of all, what it says is that what employers do matters. They have significant agency over the destinies of their workers. But speaking of destiny, what it also says is that industry itself — the industry that you’re in if you’re a company — isn’t destiny. It’s easy to look at these kinds of findings and say, well gee, we’re in a low margin industry. It’s easy to have people advance. If you’re a tech company, you can spend a lot of money on benefits and keeping people around and training them up. But we’re in a thin margin business.
What we found is that in pretty much every sector, there were companies who were near the top of the list and there were companies who were near the bottom of the list. What that said was just like between any two companies — there are these big differences even within a sector, even within people, companies you’re directly competing with — you have a lot more control than you think.
We also found that these differences make a huge difference for workers. They really are life changing. Just to put this in perspective, when I talk about how different the prospects are for somebody who works in the same role at one company versus another, if you look at companies at the top of the list versus the bottom for the same jobs, people are on average getting paid about two and a half times more. They’re also more than twice as likely to get promoted over a few period of years. They’re significantly more likely to wind up in a better job when they leave the company. They’re much more likely to have gotten a chance to even get into good work without a degree or without a lot of experiences. The list goes on.
These are big differences in someone’s life. And by the way, there are big differences for employers in their bottom lines. It turns out that companies that are at the top of the list on our retention metric have literally thirty points higher employee retention than companies at the bottom. So just think about how hard so many employers are working today to attract people into the company and to get them to stay. Imagine there is a little dial you can turn and you can go from having half your employees leave within three years to having only 20% of your employees leave within three years. Who would not turn that dial?
Van:
Yes, I’m sure the ears of the healthcare executives are all piqued because of the retention issues facing the healthcare industry. I wonder if you could provide an assessment on the healthcare industry and how they’re doing in these corporate practices and maybe name off a few of these that they should consider?
Matt:
I wish I could say that healthcare companies were in general near the top of the list. I think particularly when you’re talking about healthcare provision as opposed to pharma and biotech and the like as a sector, it is one that provides a lot of entry level opportunity, but perhaps less opportunity around people moving up, and I think there’s specific reasons for that and again, it’s why I admire your work so much, Van
I think a lot of it is that historically, precisely because healthcare is such a credentialed field, there are these kind of barriers to people moving up on the one hand. And the other hand, it’s created a mental block I think for a lot of healthcare companies to not look at people who are already in the hospital who are doing jobs and say, “Oh wait, that person might be the answer to our nursing shortage. Rather it’s, “That’s somebody doing housekeeping tasks or patient transport. That’s not somebody who we could think about for a clinical role.”
And so there’s a tremendous need to create the pathway programs that say no, actually, that talent could really actually be the answer to the challenges you have. How do you build on the skills that people already are equipped with, and build on the familiarity that they have with the hospital and the healthcare context they’re in, and help them move up?
It actually sort of underlies a broader point that we’ve seen with our work with the Opportunity Index and that’s this: the best organizations are ones that look at the workers they have and see them not for the job they’re doing, but for the job they could be doing. That sounds facile, and it’s actually really hard. It’s hard to look at somebody who’s in patient transportation and say, “Hey, that could be somebody who’s an LPN in a few years and maybe even an RN a few years after that.” But the best organizations are thinking in that way.
Van:
Well, I hear that you’re over at the Center on Longevity and doing a fellowship at Stanford, and I wonder if you’re thinking about human capital and that part of the equation and what insights you’re hoping to glean?
Matt:
So, I’m super excited with the work they’re doing in partnership with the Stanford Center on Longevity and with Mitchell Stevens who’s been leading a project there. The goal of the project is to rethink how we enable people to accrue human capital, how we help develop people’s human capital over their life course.
Right now we have a once and done model and it’s broken. The assumption is that you get a high school diploma and that’s it, and maybe you go on to college, that’s up to you. But the only thing that we know that all Americans get is a high school diploma and that’s supposed to last you over the next forty to fifty years that you’re working. That’s a broken model today. It becomes even more risible when we start to think about that as a model that can work across a longer life course, more decades in the workplace and more job transitions.
The average person makes about a dozen transitions over the course of their working life. Each of those is an opportunity for people’s careers to either inflect upwards or downwards, for people to wind up ahead or wind up behind. And so what we’re looking at is what would be the mechanisms of a system that allow people to build up skills and to make more effective transitions and to use each of those transitions as an opportunity to move up?
Put differently, one of the things that we see today — and it’s I think one of the great tragedies of the labor market, and it’s what we started talking about at the beginning of this interview around launchpad jobs – is that how you start has a huge impact on how you finish. Our objective in the project — and it’s project I’m working on together with actually thirty others, so it’s a big endeavor and I’m hoping to share some insights on it — but our objective is to make sure that just because you’ve had a bad start to your career doesn’t necessarily mean that you have to have a bad finish.
Van:
Well, we definitely want you back when you’re ready to share some findings. Matt,
Matt:
Look forward to that.
Van:
So when you came onto the podcast the first time you talked about skills-based hiring, which was in the earlier years of that policy. Where is the trend now?
Matt:
It’s interesting. We did some work on this last year to try to track to what extent is skills-based hiring taking off. Previously we had looked at whether employers were taking some of those first steps and removing degree requirements, and this is really important. And just to sort of level set for everyone, skills-based hiring has become a movement that more and more employers and governors and other policy makers are embracing because they recognize that at a time of talent shortage on the one hand, and declining economic mobility on another, the requirement of many jobs that people have a college degree is shutting off opportunity for the two thirds of Americans who don’t have a degree. It’s also throttling back hiring talent pipelines for a lot of jobs that are really where employers are struggling to find the talent they need. And so this idea of saying, “Hey, what if we took some of those degree requirements out” is a very attractive one.
So, it’s not surprising that what we’ve seen is that a lot of employers are embracing this. The number of jobs this year alone that removed degree requirements increased fourfold. But what we looked at in our most recent research wasn’t just who’s taking the degree requirements out, we looked at whether employers are following through and changing how they hire. Is there any difference in who they bring into their ranks?
What we found is unfortunately for the most part, no. What it says to me is that it’s one thing to make a pronouncement — and I think earnestly in most cases to buy into that idea — it’s another thing for change to actually percolate to the front line. There’s nothing that says that just because you’ve taken out a degree requirement that the hiring manager’s still not going to want to hire people the same way that she’s always done.
Overall, we found that only one in 700 jobs is incrementally getting filled because of skills-based hiring of people without degrees. But what was most interesting to us was there’s actually a set of companies, and a non-trivial set of companies, who are carrying all of that weight. All of the change that’s happening is happening with a little less than a third of companies who are making really big changes in their corporate practice. Not just what they say but what they do.
These are companies where you’re seeing on average a sixteen point change in the percentage of people whom they hire without a degree once they take a degree out of the job. But with most other companies, either there’s no change at all or they only make progress initially. The CEO stands up in a public forum and says, “We’re going to change the way we think about talent.” CEO speaks, people listen. And then you sort of fast forward the tape one or two years and you see they’ve kind of relapsed. What that says to me is not that this is all an exercise in cynicism, as I think a lot of people assume. What it says is that change is hard. And while people are paying a lot of attention to it, you can make progress but unless you build the systems that think about talent differently, it’s hard to really make sure that those changes stick.
Van:
So, to close out, Matt, you seem to always have an impressive flow of reports. Any new research that we can look forward to this year?
Matt:
Oh, a bunch of things we’re working on. I’ll mention one, since I know our time is short, that I’m really excited about. I mentioned that a lot of our work tracks people’s careers over time at large scale. This is an analysis of what happens to people who take a career break. We know that a lot of people wind up stepping out of the workforce for a range of reasons. For a lot of women, that reason is to be a family caregiver, whether for children or for elders. I think we all viscerally know that when people are stepping out of the workforce and women are taking on that burden for their families, they’re paying a price.
What we’re trying to do, first of all, is to understand how big a price is it, and second, to be able to understand, of the women who regain their career momentum after a work gap, what’s different about the steps they take? What’s different about the kinds of jobs they come back to? What’s different about the workplaces they come into and about the decisions that they make that allow them to regain their momentum?
Van:
Well, Matt, certainly the issues for women as they pause for children are better understood. As we look into the future of care, we know that currently 40% of elder care, for example, falls on the family members. And with the shortage of care workers and the aging of our demographics in the future, it seems like the pressures to take time out from careers to do elder care may fall on the woman may fall on the man, given that the percentage falls on the family. I’d be super curious to see how your question also plays out in that category of folks.
Matt:
Very much so. I think we realize that family care obligations happen in both directions. I’d like to figure out how we move to a world where caregiving not only takes less of a toll on people’s careers, but — as people inevitably are going to have to move in and out of caregiving — that some of what they’re learning through that experience is actually valued in the workplace.
Van:
I can already foresee that Matt will be one of our few guests who’s going to come back a third time! Thank you so much, Matt, for being with us today. We’ve learned so much from listening to all your insights and we’re inspired by the work that you’re doing.
Matt:
I so enjoyed this, Van.
Van:
I’m Van Ton-Quinlivan of Futuro Health. Thanks for checking out this episode of WorkforceRx. I hope you’ll join us again as we continue to explore how to create a future-focused workforce in America.