Matt Sigelman, President of The Burning Glass Institute: Connecting Skills to Opportunity

Van Ton-Quinlivan: Welcome to WorkforceRx with Futuro Health, where future-focused leaders in education, workforce development and healthcare explore new innovations and approaches. I’m your host, Van Ton-Quinlivan, CEO of Futuro Health.

Pennsylvania’s Governor Josh Shapiro, soon after taking office, issued an executive order eliminating the requirement of a four-year college degree for the vast majority of jobs in state government. This comes on the heels of similar decrees in two other states. Does this government validation of skills-based hiring mark a turning point? To what extent is the private sector getting on board? And how can workers and employers stay on top of which skills are important to have and to invest in?

Our expert guide to help answer these and related questions is Matt Sigelman, a pioneer in the field of real-time labor market data. He is currently president of the Burning Glass Institute, a leading labor market analytics firm which collaborates with educators, employers and policymakers to develop solutions that build mobility, opportunity, and equity through skills.

Speaking of mobility, one of the most interesting reports Burning Glass released in 2022 is called the American Opportunity Index, which measures how well major employers are doing in fostering economic mobility for workers and how they could do better. I’m looking forward to asking Matt about that and other recent research.

Thanks so much for joining us today, Matt.

Matt Sigelman: Van, it’s great to be together as always.

Van Ton-Quinlivan: Absolutely. In a prior podcast, we interviewed Byron Auguste, CEO of Opportunity@Work, and he talked about STARS — Skilled Through Alternate Routes — individuals who have skills but not necessarily degrees. Now, you have a new report showing that over the past five years, the percentage of jobs that require a degree has dropped by 14 percent. So there is some progress being made. What is it going to take to accelerate this progress where employers will consider skills in lieu of someone having a degree?

Matt Sigelman: Well, I think a couple of things have been wind in our sales over the last few years and that has really led to the kind of acceleration we’ve seen. One of those has been talent shortage itself. We are in an economy where even today, actually, we’re hearing news of layoffs, but outside of Silicon Valley, you wouldn’t know. And when employers struggle to find talent, well, necessity is the mother of invention. So, it’s causing employers to be a lot more

analytical, for the first time in a lot of cases, about their hiring and their hiring requirements. That’s really good news.

I think the other thing that’s been wind in our sales in this as well is the growing recognition that companies have had, particularly since the death of George Floyd, of the need to build greater equity in the workforce. When you put those two imperatives together: one, to be able to find new sources of talent and to stave off shortages; and the other, the imperative to create a more equitable workforce, you’ve got employers willing to experiment and to take risks. I think the great progress we’ve seen has been good.

The work that Byron and Opportunity@Work does has been extraordinary in helping employers chart those new paths and find sources of talent that they’ve been missing along the way. What I will say, though, is as encouraging as what we’ve seen has been, progress has certainly been checkered. It’s been a bumpy road. We see some firms where there’s a significant disjoint between policy and practice. In other words, companies are out there — and I think very sincerely saying — “Hey, we’re going to remove degrees as barriers to being able to access talent and as barriers to helping workers, to allowing workers to rise.” But when you look at their hiring patterns, those changes have yet to occur. I think it’s easy to say the policy, changing things on the ground with hiring managers, not so easy. That’s one of the things that’s got to change.

What I worry about now is — if we do in fact wind up going into a recession — is how we sustain the momentum that we have? If part of what’s been driving the momentum for adopting skills-based hiring as opposed to degrees-based hiring has been talent shortage, what happens when talent’s no longer short? To get back to your question — sorry, like you wind me up and I just keep talking — but to get back to your question of how we take it from here, I wonder whether there’s a step that we’re undervaluing before we think about skills-based hiring, and that’s skills-based promotion.

You see, skills-based hiring is asking a lot of employers. It’s the right thing and I want to go straight there, and I hope we can go straight there and we’ve had some good success so far.  So, I’m certainly not giving up that fight. But it is taking hiring managers to an uncomfortable place. If you’ve always hired for degrees and that’s what you know how to do and all your systems are set up around it, you may conceptually and intellectually understand that you’re starving yourself of talent. You may conceptually and intellectually understand that in fact when you hire somebody with a degree for a job that doesn’t require one, that she’s more likely to leave sooner and be less invested in the work. But darn it, I have somebody here with a degree. How am I going to turn her down and take what I perceive as a risk on somebody who maybe only went to community college or who doesn’t have a degree at all?

If we ask employers to start to build that muscle from within, then it’s not a risk at all. Would I rather “take a risk” on somebody who’s already in my organization, who I know is good and who has a lot of the right sets of skills? Yeah, it’s a risk, but I’d bet on someone I know and who I know is good any day over somebody who’s theoretically qualified but outside the company. So, I wonder whether if we start to help employers build from within, recognize that the talent lies within, whether that’s going to help them eventually start to be more successful in adopting skill-based hiring.

Van Ton-Quinlivan: Oh, that’s very provocative and insightful, Matt — this concept of skills-based promotion and building from within — because as we all know, changing HR practices is not an easy task, right? It comes down to really some practical realities for the HR team.  The moment that you remove the degree requirement, for example, just like any minimum qualification, all of a sudden you have a flood of candidates and then there’s HR people that need to go sift through all those resumes and then that is upsetting because they don’t have enough capacity, don’t have enough headcount. And so, that’s why they begin to load on all of these qualification requirements, right?

Matt Sigelman: It’s also where you start to get into trouble as well with algorithmic hiring because to your point, if I’ve got a thousand resumes that just showed up in my inbox, then you’re going to be more reliant on these AI-based systems to score candidates and those systems are inherently bringing bias into the equation. They’re going to be indexing on what’s proven in the past versus a deeper assessment of who’s got the innate capability.

Van Ton-Quinlivan: So, Matt, as you think about skills-based hiring, but also skills-based promotion, what types of occupations or types of jobs do you think are best suited for these new practices?

Matt Sigelman: If you look at the percentage of people in the workforce who don’t have a degree, you want to look at the jobs that are kind of right in the middle of that curve, where let’s say between 40% and 70% of people don’t have a degree. If you’re talking about jobs where most people don’t have a degree today, well, look, the system’s working and/or it’s low-skill work, but there’s no need to challenge the system.  If you’re looking at jobs where 75%, 80% of people already have a degree, that’s where you’re going to run into the most organizational resistance.

It’s funny…in the world of tech, for example, people love to look at programming jobs. Silicon Valley companies love to say, we don’t care if you have a degree, we just care if

you can code — which, by the way, is totally not true when you look at how they hire. Many of them have degree requirements for the majority of their jobs.

Van Ton-Quinlivan: I think like 60% of those jobs are degree-based, right?

Matt Sigelman: And in many cases, more. There’s some Silicon Valley companies who’ve been — and I’m not going to name names, unless you buy me a drink (laughs) — but there’s many of those companies who literally 90% plus of their jobs require a degree, and yet they’re very declarative. But when you leave the world of software development and software engineering jobs, there’s a bunch of jobs in the tech spectrum — from network security jobs and database architect jobs to help desk jobs — that are really well-paying, that have significant shortages and that have historically have actually been open to hiring those without a degree. Again, even if the majority of people have a degree, there’s enough hiring historically that’s gone by that’s happened in those jobs where you could push the system more and have some easier and quicker success.

Van Ton-Quinlivan: Matt, here’s a question I have for you. We know the shelf life of skills has gotten shorter and shorter, so what does that mean if we have a skills-based hiring system?

What does that mean in terms of the training infrastructure that we have to have for people to keep up?

Matt Sigelman: I think it’s a really smart question because in some ways, in a market where skills change really fast — and more on that in a second — being able to find the talent that you need means that all hiring needs to be skills-based. The idea that a degree represents the skills

that are needed for a job is really a pretty old-fashioned notion. It presupposes that the skills that define work, the skills that define careers, are static. We recently did some work together with Boston Consulting Group tracking the pace of skill change, and one of the things we found was that the average U.S. job has seen 37% of its skills replaced in just the last five years.

Think about the scope of that for a second, because we hear a lot about how many jobs are going away, and how many jobs have yet to be born. There was some silly study that came out of one of the big consulting houses a few years ago that said that 70% of us are going to be in jobs that don’t exist yet by the year 2030. Well, there’s still seven years on the clock, but there doesn’t seem to be very much sign of that. But what we do see is that in almost every job, people need very different skills from what they needed before. And so that means that everyone, first of all, needs a new mechanism to acquire skills on the fly, especially because a lot of the skills that jobs are absorbing are from across domains. They’re sort of orthogonal to the traditional definition of those jobs — marketing people now need data skills — that’s not something you just learn as you go.

So A, people need to be able to acquire new skills on the fly. B, they need to have some mechanism for representing them, for signaling them, so employers know that they have them. And C, employers need mechanisms for being able to identify the skills that they need and the skills that people bring with them, and to match more efficiently.

Van Ton-Quinlivan: Speaking of efficiency, what’s so important about having the kind of labor market data that you have been involved in producing for so long? What does it actually do for workers, employers, or policymakers?

Matt Sigelman: In the world of work, we’re used to thinking about talent as a commodity. It’s even inherent in the term human resources, right? These are resources that we can leverage, or the more modern term is human capital. On the one hand, it’s not wrong to say that workers are every bit a contributor to output as the tools and plant that you have, or as the money that finances the whole thing. But on the other hand, it does suggest that workers are commodities, that they’re replaceable. So, determining how to make the value of human work worth more comes down to being able to understand the interplay between roles and skills. What skills are making jobs harder to fill? What skills make them cost more? What skills are fast emerging? What skills are on the frontiers of a role? And you need to be able to see that in real time.

Conversely, if you take, for example, the world of education, educators put students first. It’s what they do. It’s what they should always do. But as a result, we tend to bristle a little bit about the idea of talking about careers and vocations and the like. But yet, if students feel that education is a bridge to opportunity, then putting students first means putting opportunity first.

These data are about providing that insight. Where is the opportunity? What are the skills? What are the credentials that unlock that opportunity? How do you measure the distance between people and opportunity? So, I’m very proud of what we built at LightCast in developing a data set that brings really tremendous insight to understanding the landscape of talent on the one side and the landscape of opportunity on the other side. I’m very proud of the work we’re now doing at the Burning Glass Institute, which is an independent nonprofit research center, at really being able to build on top of those data to develop new insights and new models.

Van Ton-Quinlivan: Well, one of the Institute’s latest products is this American Opportunity Index that I referenced earlier. You took a look at America’s 250 largest public companies based on the real-world outcomes of their employees in roles open to non-college graduates. What did you learn?

Matt Sigelman: One of the things that we learned is just what a big role employers play in

the vitality of the American dream in terms of whether their workers move up. You know, when we talk about upward mobility, most of the time we tend to index on what workers do

and the choices that they make. Did this person pursue a degree? Did this person kind of take some of the right steps? What kind of background they find themselves in — are they living in a rural environment or an urban environment? Do they have grit or do they not have grit? But it turns out that there are a bunch of factors that workers don’t necessarily control.

Joe Fuller, my co-author in this at Harvard Business School, and I did some prior work where we found that two workers who work for directly competing firms in the same role can have entirely different prospects for upward mobility. What we set out to do with the American Opportunity Index is to measure that. We wanted to see how much of a role companies play in the upward mobility of their workers at a time when we’re all anxious about the continued vitality of the American dream. We know from some of Raj Chetty’s work that over 90% of people born in the 1940s could expect to do better than their parents, but for people who are born in the 1980s, that’s even odds at best.

So, the American Opportunity Index follows three million people who are working in Fortune 250 companies five years ago in roles that are open to those without a college degree, and it follows their careers over the course of five years. We created a set of measures for understanding their progress. How fast did they rise? How quickly did it take them to get a promotion?  When they left the company, did they leave and go into a better job or did they wind up stuck? When the company was hiring people into jobs, are they more or less likely than their peers to hire people from outside the company?

We also looked not only at mobility, but we looked at pay, of course, because that’s terribly important to workers’ ability to stay on the ladder. We also looked at their access to jobs. Can they even get on the ladder? Relative to other employers hiring for the same role, is this employer more or less likely to give opportunities to people without degrees? Is it more or less likely to hire people without work experience?

We put that all into a blender, so to speak, and came out with an overall ranking, but we also broke it out. An interesting mix of companies, by the way, rose to the top. The AT&Ts on the one hand, but also PG&E, Southwest Airlines, Liberty Mutual and some very different companies from one another. But one of the things that we realized as well is that not every worker is looking for the same things and values the same things. And similarly, not every employer is delivering for workers in the same way.

Take, for example, some of the companies that we’re used to thinking of as great employers, great places to work. We’ve probably seen them at the tops of some of the lists of “best places to launch a career” or whatever. Some of those companies actually aren’t necessarily the best places for mobility, and it actually makes sense. If you’re at a company where nobody ever leaves, they pay people really well, people tend to stick around a long time…well, what would the American workforce look like if nobody ever retired? You’d never have a chance to move up if you’re younger. So, we wanted to make sure that we were kind of refracting that, showing the different ways in which companies facilitate movement for their workers.

It was really interesting, because one of the things we found was that there’s a lot of good practice out there. We found that 160 out of the 242 companies we ranked were on one of our

six Top 50 lists out of the full group. So, a lot of good practice. At the same time, there was nobody who was really roundly acing it in all the dimensions we measured. There’s a lot of work to do for everyone.

Van Ton-Quinlivan: Well, when I opened your report, I actually found one of the employers that I had worked for, which you mentioned, Pacific Gas and Electric. That’s where I got my start in workforce development, Matt. They had the intent of wanting to build a much more inclusive workforce, but as we talked about earlier, there were just a number of HR practices that were not conducive to doing that. So, it’s being able to look at yourself as well as putting together some best practices and incorporating. I’m glad they made it onto your list.

Matt Sigelman: The Opportunity Index itself, by the way, is very intentionally agnostic to practice. We wanted to create a yardstick precisely because some of the truths that we hold to be self-evident about what are the good practices, what defines a good employer, may not actually be truths at all. And so we said, “OK, let’s not just look at inputs. Let’s look at outcomes. But now that we have the yardstick, we started to dig in. One of the things that has really registered loud and clear is — to your point about intent — there’s a different mindset about the companies who are at the top of the list.

Certainly, there’s practices that are common in terms of investing in your workers, making more skill-based training available as opposed to just compliance or system training, having clear paths to promotion, and so forth. But there’s a lot of companies who at least nominally tick those boxes. In fact, Joe, my co-author, has done some great work interviewing CHROs and then interviewing their employees, and you’ll find very different perspectives on what’s going on inside a company. And I think that’s not because CHROs are lying.  I think they haven’t necessarily really promoted all the resources that are available. But underlying the practice, as I was saying, is that intent you were describing, is the mindset. And that’s this.

It is actually kind of hard to look at people inside your organization, not as the job that they’re doing, but the job that they could be doing. It’s hard to look at that person in accounting and say that she could be a cyber analyst. That ability to see potential in people throughout your workforce takes a different kind of mindset.

Van Ton-Quinlivan: Well, historically, this has been called mentorship, right? So if you have a mentor who sees that potential, then they may create that opportunity for you to slip into those shoes.

Matt Sigelman: And how do you systematize that inside a company?

Van Ton-Quinlivan: That is a good question. Well, hopefully, we get more creative as talent becomes more scarce. Now, Matt, this week, Burning Glass and Coursera unveiled a new planning tool for employers called the Skills Compass. It identifies five categories of skills and weighs them against factors such as value, durability, and ease of acquisition. Give us more detail on what you had hoped for employers and what they could do with this tool.

Matt Sigelman: I’m very excited about this framework, precisely because it’s a really nice way of helping to drive better optimized, better-informed decisions about which skills to invest in — whether that’s employers thinking about what skills to invest in in their workforce, or whether ultimately, I hope we turn that around to expose it for workers themselves. As you said, we focused on three core dimensions, which I think are pretty simple to understand — even if, as I can tell you, there’s a lot of blood, sweat, and tears associated with actually measuring them in a quantitatively well-structured way — but those are these. How much of a boost does a skill give your career? How valuable is it? Number one. Number two, how lasting is that value? How durable is that skill? And number three, how quick is it to acquire?

It’s not hard to understand those dimensions, and yet when you put them together, it allows you to start to dimensionalize the choices that you might have in front of you. I hate to be the bearer of bad tidings, but if you look for the skills that are top of all three of those dimensions, there’s no set of skills that are all three. There are no skills out there that are really high value once you acquire them, that the value lasts a long time and you can acquire them really quickly. No free lunch, no silver bullets in the world. But I think we all knew that.

The Skills Compass gives you the ability to say, hey, look, here’s something I’m going to invest in because it might be the quick hit I need in my career or maybe the quick hit I need in my workforce to make sure that we have the talent that we need. Is that the technology we’re going to be using in two years from now? Probably not. But it’s really valuable. It’s hard to acquire today, and it’s really easy to train people up in. Great.

You can also use it to say here’s a set of skills which are going to be worth the slog. Yeah, it’s going to be hard. Yeah, it’s going to take time. But that’s a skill which will provide decent boost, and it’ll stay with you. It’ll be worth it. Right? Being able to look at those kinds of dimensions and then conversely some negative dimensions — here’s places where you’re not going to likely get a good ROI on your education — helps you be a better-informed consumer, a better-informed agent in your own success.

Van Ton-Quinlivan: Well, Matt, as I hear you talking about the analytical approach that you’re taking, it makes me think about the high school senior and the college student that I have – and I’m sure there’s a lot of listeners that are in the same boat. If no skill set hits all three, do you have any advice to someone who’s starting their career versus maybe mid-career?

Matt Sigelman: My friend, Laurie Leshin, who’s now running the Jet Propulsion Laboratory, has a wonderful term, so all props to her on this. She talks about timely and timeless skills. I think that this is really a case of figuring out the right balance at different points in your career. When I say timeless skills, I’m talking about skills like writing, like collaboration, like research, like critical thinking. And by the way, interestingly enough, the jobs that are most tech-enabled, most data-driven have not less but more demand for those timeless skills. They’re about three and a half times as likely to ask for creativity skills; they’re about twice as likely to ask for collaboration skills; 50% more likely to ask for writing or research skills, and the list goes on.

And when I say timely skills, of course, I’m talking about often technical skills — coding,

data, UI, UX, patient monitoring skills — I’m going to step into your world there, Van.  The ability to combine those two is increasingly important.

This is the interesting thing about entering a career versus further along. The timeless skills, we sometimes refer to as foundational skills – the skills that are the bedrock for America’s liberal arts heritage — play a different role than what you might think, precisely because we tend to use a word like foundational. I have this mental image of the USDA food pyramid and the foundational stuff is at the bottom, right? That’s the carbs. But the really important stuff is at the top –that’s the protein, it’s the tech skills or whatever.  Actually, people’s careers work exactly opposite of that. The further north you go in your career, the more relative value employers place on the foundational skills. But that said, the timely skills continue to be relevant as well, just for different ways, right?

So, the timeless skills are the skills that allow you to acquire new skills as you go further along. They’re the skills that allow you to become a leader. They’re the skills that allow you to relate things to business problems, which you may be further removed from when you first start. When you first come in, you need the timely skills because that’s what’s going to allow you to get on the ladder. We can wish that employers would train you up in those, and some employers say they do, but the reality is that in a generation where people leave really quickly — and who can blame them…employers have also been very casual in their approach to work relationships, they hire and fire at will — but if the net result is that people leave their work relationships very quickly, well, guess what? It’s hard for an employer to get an ROI on skills. So as much as we may blame them, you can’t really. Okay, fair enough.

But what that means is you need timely skills to get on the ladder, but you’re going to need timeless skills to rise. Once you’re further north in your career, the timeless skills are giving you a really big boost.  They’re giving you sustained value. They’re allowing you to continue to build your business over time. But in a world that’s increasingly data-driven, that’s increasingly tech-enabled, how do you as a leader, for example, have enough data skills to be able to leverage data in your work? How do you have enough tech skills to be able to manage tech transformations? So you’re going to need both, and that means, as we were saying before, having a means of being able to continue to acquire both sets of skills.

Van Ton-Quinlivan: So, the ability to continuously learn and adapt and be able to tie things to each other and, of course, the interpersonal aspects of doing so?

Matt Sigelman: Yes. And to that point, I think it suggests a different model of what learning and career pathways need to be. You know, there’s a lot of talk in the world that you and I inhabit of career pathways. But when you actually get underneath it, what people are really talking about when they say the word pathways, is they’re talking about on-ramps. How do we help people get into a career? The assumption is still that once you’re in, you’ll be able to fly on your own.  Some of what, to me, is so impressive about what you’re doing at Futuro Health is that you’re not just helping people get on the ladder, you’re helping people continue to move up it. And that means continuing to support them with the learning, with the continued skill acquisition — both timely and timeless –that enables people to keep climbing step by step by step.

Van Ton-Quinlivan: I really like this framing of timely and timeless. I was wondering, Matt, does ChatGPT change the nature of what is timely and timeless?

Matt Sigelman: Here’s where I would go with that. The notion of tools both displacing workers and making at the same time human work more valuable is not new. It’s in some ways kind of fitting that Microsoft is the lead investor in OpenAI because in a different generation, one could have said something not so dissimilar about Microsoft Office. Most of us don’t look at Microsoft Office and see this great robotic threat. But think about, you and I have both been around

long enough to remember typing pools. There’s no typing pool anymore. Most people don’t necessarily have an admin today answering calls and typing memos and doing all the other things that you do, like writing memos and maintaining a calendar and all those kinds of things. Microsoft Office has transformed that. At the same time, it has made all of us a lot more effective, and I’d say productive.

And so the question is this: it’s easy to look at OpenAI and see the potential for displacement. For example, BuzzFeed just laid off a whole bunch of writers because ChatGPT can do the same thing — I wonder if that’s a statement more about ChatGPT or about BuzzFeed — but we won’t go there. I just did, I guess. (laughs)

Van Ton-Quinlivan: (laughs)

Matt Sigelman: But the question is this: as with any new tool, how do we beat the machine? How do we make human endeavors increasingly valuable over time? And I’m an optimist. I believe we can get there, but I also think it would be a mistake to underestimate the real challenge this represents.

Van Ton-Quinlivan: So why don’t we wrap up, Matt, by having you just tell us what’s next for the Burning Glass Institute and please do highlight any new research that we can look forward to this year.

Matt Sigelman: So, we’re working on a bunch of things we’re super excited about. We’re looking at a lot of things having to do with workforce equity. Together with some colleagues elsewhere, we’ve been developing metrics that are allowing us to get a much better perspective of disparities, for example, in upward mobility based on race and ethnicity and gender. We’re also being able to create representation benchmarks. I think that’s a body of work we’re very excited about.

We’re also very excited about the work that we’re doing right now to take some of these core ideas and see them play out on the ground. Inside a city or a state, how do you identify the jobs that really matter? Every job matters, every job brings dignity. But there are some jobs that are at a four-way intersection of good access, good paying, good mobility to workers, on the one hand; pain points to employers; strategic importance to growth and to growth of the economy, to American competitiveness; and which carry with them the potential to broaden equity in the workforce.  If we can understand those, we then say, okay, where do we find that talent? What’s the talent that’s not coming along today? What are the skills that bridge the gap? So, we’re working in a couple of places to apply some of these ideas toward not just great research, but toward saying, how can we actually create those bridges? How can we make sure that we have a job market that’s more equitable, that’s more effective for everybody?

Van Ton-Quinlivan: Well, I’m definitely wishing you success on that venture. I know we’re going to learn a lot about what works and what would be best practices. So, thank you very much, Matt, for being with us today.

Matt Sigelman: I so enjoyed this as always. Thanks for having me.

Van Ton-Quinlivan:  It’s so great to connect with you.  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.