U.S. Companies More Likely to Focus on Training

Ed Rust, chairman and CEO of State Farm Mutual, says U.S. economy is increasingly dependent on underrepresented groups.Ed Rust, chairman and CEO of State Farm Mutual, says U.S. economy is increasingly dependent on underrepresented groups.WASHINGTON ― Although there have been countless articles on the impact of our educational system on the economy, they tend to be written from the academic viewpoint or are couched in terms of numbers and data points. Looking at education through the specific lens of corporations and business leaders is a bit rarer.

A report from the Committee for Economic Development of the Conference Board (CED), featured at its spring policy conference Wednesday, provides some insight into how businesses, big and small, view the impact of post-secondary education and workforce-related training.

The CED is a nonprofit public policy organization based in Washington that researches four principal areas: education, fiscal health, global competitiveness, and democratic institutions. In January, CED joined forces with the New York City-based Conference Board.

A commonly repeated refrain from almost every quarter is that the nation has a “skills gap” that is expected only to grow, exacerbated by low postsecondary degree attainment rates. Typically, the term “skills gap” covers a swath of societal issues—the disparities in achievement between low and high income students as well as between underrepresented minority students and White and Asian students.

“Our economy increasingly depends on the successful education of those low-income and minority students that have historically been left behind,” said Ed Rust, chairman and CEO of State Farm Mutual, at the policy conference on Wednesday.

However, a recent study from the Organisation for Economic Co-operation and Development (OECD), published in February, showed that the American millennials as a whole have fallen behind their peers in developed OECD countries. The study found that American millennials are lagging in terms of numeracy, literacy, and problem solving.

For businesses and corporations hoping to recruit the highest achieving workers, these trends are concerning. “It’s not just an education problem but to a degree we look at a shattering of the American dream, with the failure that we face of the disconnect between education and the needs of business,” said Carl Camden, president and chief executive officer of Kelly Services, at a Wednesday panel.

CED’s report looked at what employers in four large American cities—Memphis, Detroit, Miami, and New York City—are doing to support postsecondary degree attainment among their employees. Research was conducted via focus groups in the four cities as well as interviews with business and higher education leaders. The Lumina Foundation provided funding for the report.

Lumina is a private foundation with the stated mission of increasing the number of adults holding postsecondary degrees from less than 40 percent today to 60 percent by 2025. The foundation was created in 2000, using the proceeds from the USA Group’s sale of its assets to Sallie Mae.

Memphis and Detroit, it should be noted, have seen particularly hard times in the K-12 system. Both have posted notoriously low public high school graduation rates in recent years, although there have been some encouraging signs of improvement. In an effort to overhaul the struggling school district, Memphis merged with the nearby Shelby County school system in 2013. Detroit’s graduation rate rose from 65 to 71 percent between 2012-13 and 2013-14.

The CED report found that most employers interviewed and studied provide funding or programs for workers interested in obtaining relevant work-related training and education. However, the average employer is not concerned with ensuring that all their employees obtain college degrees specifically. Their focus is instead on investing in the skills and competencies of their employees.

To cite an executive of a global corporation quoted in the report, “Employers don’t need a huge number of college degree holders. They need a prospective employee pool that has both college grads for leadership, management, and innovation roles and an often much larger pool of front-line workers with strong basic high school diplomas and requisite skills to be trained.”

Staff writer Catherine Morris can be reached at cmorris@diverseeducation.com.