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Occupational Opportunities for the Next Decade

Sunday, July 25th, 2010

In my June 27 blog, Payoffs of a College Education, I discussed that the Department of Labor’s Bureau of Labor Statistics (BLS) 2010 Occupational Outlook Handbook portrays particularly strong growth in jobs for college graduates. These jobs will grow at a faster rate (15% versus 10%) than those that typically require less education and yield higher weekly and lifetime earnings and greater job security. In fact, every step up the educational ladder, from high school diploma, through some college, bachelor degree and professional degree (with a small exception for PhDs), tends to improve virtually every aspect of a person’s career path.

But the level of educational obtainment is a pretty high-level view of the job market. Although it does emphasize the value of graduating from college, it does not, in and of itself, provide much guidance as to which occupations offer the best employment opportunities, the highest earnings potential and the best opportunities for advancement.

Tomorrow’s Largest Growth Occupations

In 2006 (the study’s benchmark year), about half of all jobs (see Chart 3 of the handbook) in college-level occupations were concentrated in three broad categories—education (21%), healthcare (14%) and computers (13%). Adding two others, management (12%) and business and financial operations (11%) covers more than 70% of all college-level jobs.

A nice start, but still too macro a view to provide meaningful help in career planning. Medical jobs, for example, run the gamut from physician assistants to surgeons. Management jobs run from education administrators to CEOs. Jobs within each category have very different educational requirements (from bachelor or below through post-graduate) and are likely to produce vastly differing numbers of total job openings through 2018 (from 66,000 physician assistants to 1 million registered nurses) and growth rates (2% for CEOs to 50% or more for some IT jobs).

The tables supporting the Bureau’s conclusions provide details for multiple occupations in each of these categories. As one would expect, the greatest number of projected openings are concentrated in the three largest college-level job categories: education, healthcare and computers. The first two categories share a few similarities.

Both, for example, are:

  • Being driven largely by population growth and demographic trends;
  • Characterized by especially strong growth in one very big class of occupations;
  • Consist of a large number of moderate and relatively low-paying jobs, and more modest numbers of higher-paying (especially in healthcare) jobs that typically require a minimum of four years of graduate school.

Health care growth, for example, is driven overwhelmingly by the growth in need for RNs, which is projected to grow at a 24% rate and account for almost two-thirds of all listed healthcare openings. Although there will be big needs for teachers at all levels, the demand for K-2 teachers is growing at only a 10.8% rate, while that for post-secondary teachers (and some small specialty teachers) is tracking at 23%.

IT Professions

IT-related job trends are very different. First, although the handbook profiles only five distinct occupations (out of ten that BLS specifically tracks), all four of the specialized, high-skill occupations (network systems and data communications analysts, computer software engineers, systems analysts, and network and systems administrators) are slated for hyper-growth through 2018, at rates ranging from 28% to 53%.

These jobs, most of which require “only” bachelor’s degrees, also provide some of the highest salaries—more than twice the median for all occupations. Many, even during the depths of the recession, are already characterized by strong levels of college hiring, rising salaries and shortages of qualified applicants at all levels of experience.

Moreover, the need for IT skills is being driven not by demographics, but by the rapid, increasingly critical need to incorporate IT into virtually every business, every process and every “machine” (from PDAs and televisions through office buildings and jumbo jets). And this is just the start. Business decisions increasingly require real-time analytics and seamless, real-time collaboration tools. The Internet, meanwhile, is creating new businesses and new job requirements every minute of every day.

This being said, not all IT jobs are created equal. As I mentioned, four of the five listed categories are growing at hyper-rates. The number of openings for the fifth—computer programmers—is actually declining. This is not at all surprising. The demand for the lowest skill IT occupation, data entry clerks, has been plummeting for years. BLS now anticipates similar (albeit slower) declines in the number of openings for computer programmers. These positions, as I’ve discussed in a number of previous blogs, will be increasingly replaced—and compensation reduced—by a combination of:

  • Technology, including more automated development and test processes, software reuse and tools that can be used by non-IT professionals; and by the
  • Rapid growth in the availability and use of lower-priced, offshore IT professionals.

Moreover, while these forces are initially felt in relatively low-skill IT professions, they are already beginning to be felt in ever more demanding occupations. Increasingly sophisticated, policy-based IT management software, remote diagnostic tools and a growing trend toward the delivery of IT as an outsourced service will slash the number of people required to maintain an application, manage a given number of servers or support a given number of users. Moreover, as I have discussed in previous blogs, the number of offshore IT professionals is exploding, their education and training is getting much better and they are moving rapidly up the IT value chain, providing increasingly sophisticated services—including services that integrate IT skills into other college-level occupations.

So, while highly demanding technical specialties may offer promising opportunities for the next decade, IT professionals, like sharks, must continually move forward—or they will die. They must continually evolve their skills to address the most promising career opportunities. Most importantly, they must learn to apply these skills in ways that deliver not just “IT value”, but true “business value” to their company’s line-of-business constituents and especially their customers.

But as the number of opportunities for dedicated IT professionals is large and rapidly growing, this does not even scratch the surface of the need for IT skills in tomorrow’s job market. Virtually every college-level job in America is becoming, to one extent or another, an IT job.

This is not to say they must develop, manage and maintain their company’s IT infrastructure or applications. They must, however, be able to integrate a broad range of increasingly sophisticated IT tools into every aspect of their work. And I don’t mean that people must use word processing and email. Those are yesterday’s skills. Today’s professionals must also be fluent in Internet search, in computer-based collaboration and in social networking. Tomorrow’s professionals must seamlessly incorporate sophisticated information access and analytics tools into their day-to-day tasks and learn dozens of new tools and techniques that most of us can barely identify.

Over the next decade, virtually every professional will have to be an IT professional, as well as a professional in his or her own specific field.

Posted in 21st Century Careers, Business Trends, Community/Other Colleges, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, 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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IT Companies as Catalysts in Creating the 21st Century Workforce

Monday, January 11th, 2010

The following is a high-level summary of a more detailed report that summarizes the findings of six months of research into the changing nature of U.S. knowledge work and the requirements for creating a generation of knowledge workers who will not just be able compete, but will not be able to add differentiated value in a global knowledge economy. For a free copy of the full report, click here.

We’ve all seen the statistics and the anecdotes surrounding the declining technical skills of American workers. Although unemployment is at record highs, many positions go fulfilled for lack of qualified applicants. U.S. student interest and skills in science, technology, engineering and math (STEM) education is plummeting relative to other those in other countries and the U.S. is making it increasingly difficult—and unattractive—for talented foreign students and professions to enter and remain in this country. U.S. manufacturing workers lack the skills to work in new-generation factories and promising green tech firms are leaving the U.S. in favor of countries with larger markets and more sympathetic governments.

Unfortunately, most signs suggest that things will get worse, before they get better.

IT vendors and service providers that are based in or have operations in the U.S. face particular challenges:

  • They will find it increasingly difficult to find sufficient numbers of graduates with appropriate skills and will either have to implement “remedial” programs or increase their use of offshore talent;
  • If IT vendors/providers will have trouble finding skilled people, customer IT organizations are likely to face desperate skills shortages;
  • A decline in math and IT skills among customer’s business professionals threatens to limit appreciation for, experimentation with, and adoption of new IT capabilities.

But while IT vendors face some of the greatest challenges from a U.S. skills gap, they are also the best positioned of any major type vendor to address the problem. These vendors, after all, created and will continue to create the tools that are revolutionizing work. They are also pioneering many of the organizational and business revolutions that transform the work environment of the future. IT companies, for example, have been among the leaders in transforming, automating and optimizing traditional business processes, in disrupting revenue models of traditional industries and in globalizing knowledge work and business processes that few ever dreamed could go offshore.

It’s only logical. Companies that are this involved in shaping and defining the future of knowledge work, are also among the best positioned to understand the skills that tomorrow’s workers will need. Although many such companies are already using their large, established training organizations to directly prepare some of their customers and their partners’ employees, a growing number are going much further.

They are forming increasingly innovative partnerships with universities (and to a lesser extent, all types and levels of schools) to help foster the educating of next-generation employees. Schools, including some that traditionally shunned such collaboration as an infringement on their academic integrity, are increasingly welcoming this help as a means of better preparing their graduates for jobs in one of the most challenging job markets in memory.

These types of partnerships, which can include access to free or low-cost hardware and software, help in designing curricula, courses and Internet-based delivery systems and joint research, are beginning to yield some big benefits to the companies and schools alike. In the end, however, students are probably the biggest beneficiaries.

We are, however, only early in to the second generation of such partnerships. The real benefits—to IT companies, schools, students and to the IT companies’ customers and communities—are still around the corner. So, as discussed in some of our recent articles and reports, some vendors and some universities are already beginning to reap some big strategic and financial dividends from their initial partnerships.

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, Globalization, Immigration and Offshoring, Innovation/Entrepeneur, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, Job and Career Opportunities, K-12, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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IBM’s Role in Creating Tomorrow’s Workforce

Sunday, October 11th, 2009

My October 5, 2009 blog, Technology Vendors‘ Roles in Addressing the College Conundrum,  assessed some of the primary changes that colleges and universities must undergo to help prepare their students to find and to succeed in the knowledge jobs of the 21st century. It explained the critical roles the private sector can play in helping colleges make these changes and why IT vendors are particularly well suited to help.

My July 27, 2009 blog, How IBM is Helping Universities Develop 21st Century Workforces, provided a high-level overview of IBM’s Academic Initiative and Global University program. I recently completed a deeper examination of IBM’s initiative and wrote a more detailed report (IBM’s Effort to Create the Workforce of the Future) that explained these programs within the context of IBM’s employee development program. In this report, I spelled out the benefits the programs will deliver to universities, students, IBM partners and customers—and to IBM itself. The entire report is available for purchase on my web site. To whet your appetite, here’s a summary of the report’s primary findings.

IBM has been one of the leaders in partnering with universities and other organizations to ensure the availability of the type of IT professionals required to build, run and optimize the types of IT infrastructures and solutions that have become the foundations of 20th century organizations. While it is continuing with these efforts, it is now focusing its primary efforts on partnering with universities and adapting its own employee development models to ensure the availability of a new type of professional—what it calls a “T-shaped person”.

These T-shape people, whether IT professionals, business professionals or public service professionals, must be interdisciplinary generalists, rather than narrowly-focused specialists. Although they must certainly have deep skills in specialty (the vertical axis of the T), they must also have sufficient understanding of a broad range of related disciplines (the horizontal axis) to allow them to see contextual linkages, to constructively participate in interdisciplinary teams and to continually adapt their visions and their contributions to rapidly changing conditions and needs. But whatever the individual’s specialty (whether IT, business, scientific or any other field) all must understand how to apply IT tools to the needs of their profession.

Therefore, IBM is adapting how it works with universities to leverage its traditional relationships with IS, engineering and business departments, into all types of disciplines, from psychology, through public affairs through medicine. These new relationships are multi-faceted, including everything from help in designing courses and curricula; providing required hardware and software; funding research, scholarships and internships; and helping to create interdisciplinary research centers that bring together academics, businesses and government officials to address gnarly problems in areas including transportation, energy, food safety and environment.

IBM’s initial goal in creating T-shaped professionals and research centers is to feed the company’s own need for qualified people. It selects future employees from among this expanded pool of graduates and is adapting the company’s internal employee development programs to transform these interdisciplinary graduates into solution-focused professionals who can proceed through any of five broad career paths.

But if these efforts go as anticipated, they will accomplish much more. They will help promote independent research that is aligned around IBM’s primary market objectives, provide solution-focused employees for IBM customers and partners and ideally inspire a new generation of students to understand how they can use IT (ideally IBM’s IT) to bring new value to their own fields. Ideally, many of these fields will align with the rapidly expanding sets of market needs being addressed under IBM’s Smarter Planet initiative. It can, in other words, be a win-win proposition, helping everybody, with the exception of IBM’s competitors.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Education System and Institutions, IBM, IT Company Strategies, IT Industry and Companies, IT Industry Role in Education, Job and Career Opportunities, Skills Requirements, 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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Defining the Post-Recession Knowledge Workforce

Wednesday, June 10th, 2009

The composition of the knowledge workforce was in flux before the current recession. Many of the knowledge workers were Baby Boomers—who were preparing to retire. With insufficient numbers of Gen Y’ers to fill their shoes, many of these jobs were destined to be unfilled. To compound the issue, a growing percentage of young adults—especially men—were shunning the college education needed for much knowledge work. For some Gen Y’ers, not going to college was a matter of choice. For others it was an economic mandate as the cost of higher education became more and more difficult for many middle-class families to afford. And for those who do go to college, the percentage of U.S. students who study technical fields including science, engineering, mathematics and IT (SEMIT) continues to decline.

The good news is that foreign nationals are increasingly filling this breach. For example, while foreign-born people represent for only 13% of the U.S. population, according to an April 12, 2009 article in The New York Times, they accounted for 24% of the nation’s scientists and engineers as of 2007. Foreign nationals are particularly well represented at the highest levels of their professions, accounting for 42% of all current U.S. master- level engineers and 60% of PhD-level engineers (and a similar percentage of U.S. university SEMIT masters and PhD candidates as well as 28% of U.S. physicians, and 26% of all U.S. Nobel prize winners). According to a 2007 UC Berkeley report, “America’s New Immigrant Entrepreneurs” (America’s New Immigrant Entrepreneurs) foreign nationals are among the founders of one out of every four U.S.-based technology startups).

The bad news is that America, in its infinite wisdom, is trying to reverse the slide in domestic SEMIT enrollment not by aggressively encouraging and preparing U.S. citizens to study these fields, but by making it increasingly difficult and less attractive for foreign nationals to come to or to remain in the United States

Although the recession will certainly not change everything, it will change a lot. Think the Baby Boomers will retire soon? It is hard to believe recent surveys that suggest that most still plan to do so. After all, the majority were ill prepared to fund retirements even before the recession decimated the values of their small nest eggs and their homes (at least the percentage of their home values that were not encumbered by second mortgages).

And then there are the Gen Y’ers who are finding few jobs. New graduates who are all but locked out of the formal job market are either:

  • Returning to school (which is good for the future of the economy;
  • Being forced to take jobs that are either below their skill levels or, often, totally outside their chosen field (which is bad for the future); or are
  • Temporarily dropping out of the workforce altogether (even worse for the future).

The composition of the post-recessionary workforce is further clouded by a number of anomalies that are either unlike previous recessions, or of a much different magnitude. Examples include:

  • White collar unemployment has dramatically grown (driven partially by the financial services industry meltdown), in addition to the traditional decline in manufacturing jobs;
  • The collapse of the financial services industry will certainly force students and recent graduates to reassess career choices and may prompt them to look to new areas of study (hopefully SEMIT) and industries (such as new-generation manufacturing sectors);
  • Many of the manufacturing jobs that are being lost in this recession will not come back to the United States. Meanwhile, many of the entry level knowledge jobs for which these displaced people can be most easily retrained, are increasingly susceptible to being offshored. The prospects for highly touted green collar jobs remain uncertain;
  • Traditional layoff patterns are changing, with companies increasingly laying off younger workers before older (more expensive) workers (a factor that is at least partially attributable to fear of age discrimination suits and the unwillingness to lose critical skills) and of laying off men faster than women (a pattern which, while occurring across all educational levels, is particularly pronounced among college graduates); and
  • A housing market-induced decline in worker mobility, which makes it particularly difficult for people in economically distressed areas to move to more promising localities.

What does all this mean for the workforce of the future? Although I will look at this in much greater depth in future blogs and reports a few implications jump out.

Consider, for example, the dramatic reduction in the percentage of men that are graduating from college (compounded by a growing percentage of men being laid off). This has the potential of effectively reversing traditional gender roles. It will certainly have profound implications within business, where more and more men will report to women managers. It may have even greater societal implications, with women playing greater roles in local and national politics and a rapidly growing percentage of men playing primary roles in raising families and caring for parents.

A significant delay in the retirement of Baby Boomers (to the extent it occurs) has the potential of helping many companies in the near term, but of creating big corporate, societal and economic changes over the long term. The good news for companies is that a significant delay in Baby Boomer retirement will bail many out of their failure to plan for huge demographic shifts and the associated loss of institutional knowledge. But the negatives are numerous. First, aging workforces will cost companies much more in salary and benefits. More importantly, higher costs, combined with an anticipated slow recovery, will dramatically limit job openings and advancement opportunities for younger workers. Some careers will just be delayed. Others will be permanently sidetracked. But companies with be deprived of a critical supply of management talent and families and communities will be deprived of the income associated with productive careers.

U.S. students’ rapidly declining interest in SEMIT is even more portentous. First, technology-based industries tend to create large numbers of high-paying jobs and generate large volumes of high-margin exports. Worse still, even the most staid industries are being forced to become technology industries. The future of autos, we are being told, is in new, fuel-efficient designs. Even utilities are being forced to go high-tech, with the need to move to clean coal and renewable energy sources, and to build and manage smart infrastructures. Hopefully, factors such as declining financial industry opportunities, growing interest in sustainability and new education incentives and programs (such as those that encourage math and science education) will increase domestic interest in SEMIT education and careers. If not, the U.S. will hopefully recognize the necessity of encouraging and better utilizing the gift of foreign-born talent that is being nurtured by our universities.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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