September, 2009

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Leveraging University Education into Careers for the New Economy

Sunday, September 27th, 2009

As discussed in my September 20, 2009 post, “Is the U.S. Losing the Luxury of Educational Choice?”,  the Great Recession has devastated employment opportunities for new university graduates. Even so, a small percentage of new graduates are not only landing their ideal jobs, but have the luxury of choosing among multiple offers. What do they know that unemployed or underemployed colleagues do not? More importantly, what lessons can their experiences provide for current and future college students who will be looking for jobs in the New Normal—the post-recessionary period that will be marked by slow consumer spending and business investment, slow jobs growth and very, very selective hiring?

Promising Specialties

Jobs—especially good jobs—will be hard to come by for years to come. Employers will face a buyer’s market and will look increasingly for the types of skills that are specifically applicable to their needs. Students that want to maximize their chances of finding quality jobs in their field may wish to consider supplementing their coursework with classes and independent study in areas that employees are likely to value.

First, let me be clear. I would never even suggest—much less recommend—that students forgo pursuing their passions in favor of areas of study that are specifically intended to lead to jobs. Having said this, those students with deep interests in fields that are likely to experience high demand over the next decade, are likely to have big advantages. These fields may include:

Specific academic disciplines, such as:

  • Engineering, all types, but especially electrical and civil;
  • Mathematics, everything from PhDs though college-trained math teachers);
  • Science, from PhDs and MDs though high school science teachers;
  • Business, especially finance (even after the financial industry crash), marketing and MIS;
  • High-level IT skills (versus programming) in areas including systems analysis, database, security and software engineering; and
  • Law, such as around regulatory compliance, privacy and healthcare regulation.

Specialties in key growth industries, including:

  • Health care (which could account for 20% of all new jobs over the next decade), for all skills from doctors to physical therapists and from research scientists to medical records and health information professionals;
  • Education, especially in fields including math and science, particularly in private (rather than public) schools and in higher education;
  • Energy, in most areas of energy exploration, production and distribution and, particularly, in alternative energy and energy management; and
  • Technology, especially in areas including bio-tech, environmental sciences, alternative energy and probably, in the future, nanotechnology.

This said, virtually every industry, regardless of how staid, and whether growing or shrinking, will offer job opportunities. Take manufacturing. Although the broad industry is expected to continue to decline for the foreseeable future, some segments, including aerospace and drugs and a broad range of advanced manufacturing segments are expected to grow. Virtually all manufacturers will need specialists in areas such as operations and supply chain optimization.

The College Conundrum

But what about those whose passions lie in other, less technical fields and slower growth industries and disciplines? What about those whose passions continue to reside in “passé” industries, such as automotive. One the bright side, even these industries will continue to hire university graduates who can help address new needs, such as designing and engineering more fuel efficient cars and capitalizing on the booming demand in high-growth, emerging countries.  

Then, of course, there are academic disciplines that may stimulate a student’s passion, but that have not traditionally experienced huge demand from recruiters. Some disciplines, such as psychology and sociology can, especially with appropriate focuses and supporting coursework, fit well into high-growth areas, such as human factors and user interface design or business service design and optimization. Others, such as art history, anthropology, or my old major, philosophy (good thing it is still a good preparation for law school), pose tougher employment challenges.

Even so, students who major in any discipline can dramatically improve their attractiveness to potential employers through a well-designed selection of complementary courses or research focuses. These include:

  • Mathematics, particularly in areas such as statistics, modeling and simulations;
  • IT, not necessarily in developing and managing IT environments, but in understanding which IT tools are most applicable to a chosen field and how to apply them to deliver business value; and
  • Social networking and Web 2.0 tools and techniques and how to apply them to business needs, such as market research the building of communities and the mining of Web statistics to identify patterns or preferences.

In fact, the application of such tools will be so critical in landing good jobs—not to speak of delivering innovative value within virtually any chosen field—that they should be incorporated as standard components in virtually every discipline and every course. They should be treated as core skills—along with writing, communications and, increasingly, team-based collaboration. They should be specifically taught in foundation courses and embedded in virtually every curriculum. Career counselors, meanwhile, should be able to help students identify career pathways and the combinations of majors and minors, complementary courses, independent research areas and internship opportunities that will be most effective in tuning their educations to the needs of potential employers.

Moreover, all courses should be structured and taught not as self-contained disciplines, but as components of a broad body of knowledge in which multiple perspectives and skills must be integrated to achieve breakthrough perspectives.

Herein lays the conundrum, or actually, the multiple “conundra.”  Universities are generally organized in discrete stovepipes that implicitly discourage cross-disciplinary collaboration. Professors are typically hired and rewarded on the basis of their depth of knowledge in their particular specialty, rather than as interdisciplinary thinkers. Many professors consciously shun practical applications of their work and involvement of corporations in tuning curricula in favor of maintaining academic purity. And few schools have sufficient numbers of career counselors, or sufficient interaction with the companies most likely to hire their graduates, to provide deep insight into the combinations of skills that will be required for different types of jobs.

A relative handful of universities have already begun to address many of these issues. Most, however, will find it very tough to buck tradition, entrenched (not to speak of tenured) interests and ennui. This is especially true during the current recession and in at least in the early stages of the New Normal, when budgets will continue to be squeezed. Most students, therefore, will have to fend for themselves. They will have to think more strategically as to how to tailor and how to position their specific combinations of interests into “value propositions” that will be compelling to potential employers.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Role in Education, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Universities and Grad Schools, Workforce Trends | No Responses »
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Is the U.S. Losing the Luxury of Educational Choice?

Sunday, September 20th, 2009

The U.S. emerged from World War II as the richest country in the world. Although our prosperity has certainly hit a number of speed bumps over the 60 years, our prosperity has given our children an unprecedented luxury. They could study virtually any subjects in which they had an interest and, assuming they did reasonably well in college, have a reasonable chance of obtaining a good job and earning at least, a middle-class lifestyle.

Have we outgrown this luxury? Should students who hope for a reasonable shot at the American Dream follow the lead of Chinese and Indian students by focusing their studies in the fields that offer the best prospects of employment, rather than those that feed their passions?

Realities of the Great Recession

The traditional American educational luxury of pursuing one’s passion (like many other luxuries during our current mini-depression), is beginning to look less and less affordable. Young adults, aged 20-24, currently face 15% unemployment, up from 8.2% in 2007. While recent college graduates certainly fare much better than those with high school degrees, the National Association of Colleges and Employersestimates that corporate entry-level hiring has fallen by more than 20% and that only 19.7% of 2009 graduates who have so far applied for jobs have actually received offers.

In fact, it claims that the total number of jobs for 2009 graduates will fall by 22% from 2008—during a year in which colleges are graduating more students than any year in the last decade. Moreover, many of those students who are lucky enough to receive offers are having to settle for lower-level positions, jobs outside their preferred field and jobs that do not teach the skills needed to compete with those who graduate two or three years from now.

The damage, according to recent study by Yale School of Management economist Lisa Kahn, can be long-lasting. Graduates who join a company during a recession (1981 for her study) not only start at lower wages, but they generally continue to earn lower wages and find it difficult to compete with younger, more recent graduates when normal hiring patterns resume.

And one thing is certain. Things will become more difficult before they improve. Although we have begun to see a number of promising “green shoots,” most economists agree that unemployment rates will rise—probably above 10%—before they are likely to begin to decline around mid-2010. Moreover, it is likely to be 2014 before our economy will produce the same number of jobs as in 2007—and that does not even begin to account for the 100,000 new jobs that must be created each month just too keep up with new labor force entrants. More challenging still, globalization will claim a growing number of new jobs and, increasingly, a growing percentage of relatively high-paying knowledge jobs.

As I have discussed in previous reports (“Why the Private Sector Must Develop Socially Responsive Workforce Globalization Policies“) and articles (“Welcome to the Global Knowledge Economy“),  two separate 2007 and 2008 studies by Princeton Economics Professor Alan Blinder and the Harvard Business School concluded that a minimum of 21% and up to a potential of 42% of U.S. jobs had the potential of being offshored.(Not that they will be offshored mind you, but they have the potential.) The greatest future challenges will occur not in manufacturing, but in knowledge jobs—those that generally require college degrees and that pay moderate to high wages.

Accommodations to the New Normal

Although this sounds pretty gruesome, all is not gloom and doom. Some newly-minted graduates have had no problem finding the jobs they desire. Some even have the luxury of selecting among two or more attractive offers (fewer offers than in previous years to be sure, but still enough to provide a choice). As discussed in the Council of Economic Advisors’ July 2009 report, “Preparing the Workers of Today for the Jobs of Tomorrow”, these offers tend to concentrate in:

  1. A relative handful of industries, such as healthcare, education, aerospace, pharmaceuticals and environmental sciences; and
  2. Job functions and disciplines that entail specialized, post-secondary education, ranging from associate- and vocational-level programs (like medical records technicians and home health aides), to college degrees (registered nurses and teachers), through post-graduate degrees in fields such as medicine, biochemistry and electrical engineering. The Bureau of Labor Statistics’ Occupational Outlook Handbook, 2008-09 provides details on jobs that offer the best and worst prospects through 2016.

This, however, begs the question. Have U.S. children lost—or are they in danger of losing—the luxury of using education to pursue our passions? Must we begin to view higher education as we view apprenticeships and view vocational schools—as preparations for a job, rather than for a preparation for life?

I don’t think so. As I will discuss in my next blog, I believe that students not only can continue to use education to pursue their passions—they must do so to optimize their prospects. A relative handful of students may, as they always have, have the opportunity to reshape realities to accommodate their own interests and needs. The rest of us, however, while still able to pursue our educational and occupational passions, may have to make a few accommodations to an environment that is increasingly being called the “New Normal.”

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Education System and Institutions, Globalization, Immigration and Offshoring, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Universities and Grad Schools, Workforce Trends | No Responses »
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Offshoring and the Future of American Jobs

Sunday, September 13th, 2009

Offshoring began with manufactured goods. More recently, it has begun to move toward services. While services offshoring began with relatively standardized “process-based” services (application testing and maintenance and, increasingly, development), they had—at least though mid-2008—been moving rapidly up the value chain, into “conceptual” services (application architecture, financial analysis, legal research, etc.) and even “innovative” services (especially R&D).

Services Offshoring

As I discussed in many previous reports and articles, I was convinced that this was just the beginning of a long-term trend under which continually more, and increasingly high-value services work would move offshore. This shift, I claimed, would not be attributable solely (or in some cases, even primarily) to the promise of lower cost. It would be increasingly driven by a shortage of qualified U.S. residents—especially in technical disciplines including science, technology, engineering and mathematics (or STEM).

Now, I am not so sure. Although Indian and Chinese labor costs are not rising as rapidly as they were, their cost advantages relative to U.S. labor are declining. This is especially true for India, given the rupee’s rise relative to the dollar. More importantly, the traditional shortage of skilled U.S. knowledge workers has turned into a surplus.

True, this surplus is far from universal. Some technical jobs continue to go begging for qualified candidates. Overall, however, by the time U.S. hiring does pick up around mid-2010, there will be an even larger pool of unemployed and underemployed Millennials and Baby Boomers (the two lost generations discussed in my August 30, 2009 “Is the Great Recession Creating Two Lost U.S. Generations?”.

The good news for U.S. workers is that the large pool of relatively inexpensive domestic talent will reduce companies’ needs and incentives for going offshore. The bad news (although I contend that it is generally good for the U.S. economy) is that the offshoring of services jobs is an irresistible force. It will inevitably grow.

Even so, the Great Recession may have something of a silver lining. Given that companies are not likely to begin significant net hiring for another six to nine months—and that many economists do not expect the country to regain all its lost jobs until 2014 or so—we now have an opportunity. This is the opportunity to:

  1. Begin providing our own students and workers with the type of skills that will be required for the high-value jobs of the future; and
  2. Address the country’s current drift toward increasingly restrictive and indiscriminate immigration policies which make it more difficult and less attractive for qualified students to study in U.S. universities and qualified graduates to work in the U.S. (Although I will address this issue in future blogs, Vivek Wahdwa writes extensively, and authoritatively on these issues.)

Manufacturing Offshoring

While the Great Recession is likely to give the U.S. a chance to get our services workforce house in order before the services offshoring wave has a chance to reform, the global oil situation may possibly provide a similar opportunity for our manufacturing workforce. This opportunity results from:

  • Our huge number of skilled, un/underemployed manufacturing and construction workers (including those in industries in which many jobs will never return, and some will return only slowly);
  • The growing importance of just-in-time manufacturing and inventory control;
  • The volatility and almost certain dramatic increase in the price of oil; and
  • The threat of supply-chain disruption attributable to everything from pirates to government protectionist actions.

Although it is too soon to tell, it appears that a growing number of companies are beginning to at least consider bringing some of their manufacturing capacity closer to their customers.

Although services industries certainly provide the greatest opportunity for generating the highest-value, most sustainable jobs for American workers, we must also court skilled manufacturing jobs. And, as is the case with services jobs, a large pool of available workers—trained in the skills of tomorrow—will be one of the most effective lures in attracting these jobs.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Political Forces, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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How IT Services Providers Can Help Clients Address the Coming IT Skills Gaps

Saturday, September 5th, 2009

The growth of the IT industry has depended on broad availability to people with IT skills-people to work both at IT vendor and customer organizations. Although it may be tempting to scoff at the emergence of a skills gap during a period characterized by a combination of recession (when companies are being forced to lay off and defer the hiring of qualified people) and globalization (with a huge growth of IT skills in India, China and dozens of other emerging countries), three fundamental trends will combine to jeopardize the availability of the type of skills that will be required to allow developed country companies (especially U.S., Western Europe and Japan-regions on which IT vendors still demand for the vast majority of their revenues and profits) to effectively apply IT to addressing the business needs of their companies. These trends are:

  1. Demographics, a combination of a dearth of Gen X and Y’ers to replace retiring baby boomers, insufficient transition planning by many companies, and simultaneous declines in both the percentage of young adults graduating from colleges and, especially, those majoring in IT or other technical curricula.
  2. Globalization, whereby the rapid growth of offshore labor supplies and skills (and the pressures this will impose on developed country entry jobs and salaries) will initially reduce both the attractiveness of IT careers and, longer term, jeopardize the development of the type of higher-level skills that developed countries will need to mange their own environments and, most importantly, effectively apply IT to their company’s business needs.
  3. Industrialization/Automation, in which lower-level entry tasks (those that are instrumental in helping people learn the foundation skills that are necessary to learn higher-level skills) will increasingly be instantiated into software.

At first glance, it may appear that the combination of 2 and 3 will address the shortfalls created by 1. Moreover, the combination of all three of these trends could very well result in IT organizations that are much more cost-efficient -and effective-than are traditional organizations.

But while the globalization and Industrialization of IT work will certainly reduce the demand for IT-trained “bodies” in the U.S., it will simultaneously reduce the supply of people trained to provide the types of high-level skills that are required to:

  • Architect and manage sophisticated projects and, most importantly, those that best understand how to
  • Apply IT as a tool to address business needs and achieve strategic advantage.

From where will such skills come? True, offshore sources may well produce many of the architectural and managerial skills required to offset a dearth of developed country skills. Although companies may prefer to retain these and other high-level IT skills onshore, many can probably make do with offshore talent. And since few end user organizations are likely to have the scale or the best practices required to build, staff and manage world-class offshore IT organizations, they may even be able to justify outsourcing these functions to third-party providers.

But what about that mix of deep business process, IT architectural and business strategy skills, combined with the type of corporate cultural sensitivity, that is required to identify and sell the need for, and align the types of organizational resources required to drive such projects to fruition? Such capabilities cannot be offshored, much less outsourced. How will developed countries in general, and individual companies in particular, recruit, develop, nurture, manage and retain such skills? Even more fundamentally, what type of skills should companies look for in people who can grow into these roles, where are such skills being taught, what career paths are most effective in developing these skills and what cultures are required to develop skills into talents?

True, the “mere tasks” of increasing college graduation rates, the percentage of students who major in IT and related disciplines and the quality of the educations these students receive, may well increase the pool of raw materials from which such talent may be developed. But the use of such blunt instruments to increase the genetic probabilities of creating the new generation of such talent is not an effective or efficient means of developing these skills. This is particularly true given a probable decline in the number of entry jobs from which such students can percolate to the top.

Neither the country, nor individual companies need huge numbers of raw skills-they need a totally new approach to selective breeding on the type of talent that will be required for the skills that businesses really need to be competitive in the future. They need entirely new types of education, entirely new career paths and entirely new ways of looking at the type of value that IT must provide in a more global knowledge-based economy. 

Since IT vendors in general, and IT service providers in particular, are playing such key roles in driving the  globalization and industrialization/automation tends, they are best positioned to determine the ways in which these trends will redefine the needs for next-generation IT skills. And since they have so much to gain from the availability of such skills-and so much to lose from death of these skills-they have huge incentives to help create them.  Some, as I will discuss in future reports, are already working to define and help universities create the foundation for these new skills.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | 1 Response »
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