Commercial Real Estate

CRE Opinion: Connecting Gummy Bears, Millennial Unemployment, and the Skills Gap

The implementation of an apprenticeship program could help millennials find employment in areas that are experiencing a skilled workforce shortage.

In my corporate site location work, I continue to see evidence of labor shortages and strong competition for workers within several industries where Texas has historically excelled.  Specifically in healthcare, information technology, finance, aerospace manufacturing, electronics and components manufacturing.

The gap for high demand middle-skill workers in these industries was substantiated in JPMorgan Chase & Co.’s 2015 skills gap report, New Skills at Work, on global workforce readiness of the Dallas-Fort Worth metro. According to an analysis by the Manufacturing Institute, a non-profit advocacy group affiliated with the National Association of Manufacturers and Deloitte, 2 million U.S. manufacturing jobs will remain unfilled over the next decade due to a shortage of trained workers.

The millennial generation, born between the late 1970’s and early 1990’s, is now the largest generation in the workplace and will represent nearly 75 percent by 2030, per the Bureau of Labor Statistics. Yet even with this level of representation, the unemployment rate for those ages 18 to 29 was 12.8 percent per the U.S. Department of Labor’s 2016 September report. The BLS said two-thirds of the high school graduates who enrolled in higher education in 2015, opted for four-year degrees versus community college or vocational tech schools. Four-year university degrees are still seen as the more viable path to higher paying jobs.

The 12.8 percent unemployment rate was adjusted for those young people who have given up looking for work and moved back home with their parents due to unemployment or under-employment. As mentioned in a Forbes article, older generations remaining in the workplace longer due to economic needs, has meant younger workers are less likely to be promoted into roles held by incumbent workers. Millennials do not see a viable path to employment with one company as earlier generations have experienced. Baby boomers had limited experience, too, due to the economic downturns.  Having raised two millennials, I agree that we are responsible for the attitudes and mindsets from this generation growing up in a more abundant lifestyle with all those trophies and iconic gummy bears candy received for their just showing up at sport or talent competitions. Per another Forbes write-up, “They don’t need trophies but they want reinforcement.”

In “All about Bob(bie): Strategies for Winning With your Employees”, and a follow up article, I gained some more insight into this younger generation.  Employers need to set clear expectations of opportunities for millennials to move up and make more money.  They work well in teams, a trend used in their undergraduate education, want real time feedback on their performance, and prefer a “coach” to a “boss.”  Because they grew up playing video and computer games and that’s how they also learned in school, “gamification” is an effective approach when it comes to training millennials.  Gamification involves any tool or software platform used for applying game mechanics to non-game contexts in order to boost engagement, motivate employees, and facilitate learning/training for successful end-results.

While working a multi-state search for an international high-tech manufacturer to locate a plant this past year, I had the opportunity to learn more about another iconic German tradition, their globally recognized apprenticeship system model—now also being used in the United States.  Apprenticeships are a form of paid worker training that can lead to a nationally recognized credential for employment. In Germany, about half of the high school graduates opt for apprenticeships rather than college degrees because of the potential of almost certain employment at the respective company when completed.  Siemens was one of the first companies to utilize an apprenticeship program in the U.S. in a Charlotte factory, modeled after the German system. The company partnered with a local community college to offer vocational courses in combination with on-the-job training.  As a response to Kansas City employers needing access to an adequately trained workforce, the Midwest Center for Robotics and Automation Apprenticeship Program was established.  This program is a hybrid of the original German system, offering both online and in-the-lab training.

Apprentices can learn skills required in advanced manufacturing and graduate with an associate’s degree combining disciplines of science, technology, engineering, and math.  The U.S. Department of Labor estimated that 87 percent of apprentices in the U.S. are employed after completing their training programs, earning an average of $50,000 annually or higher.   In many apprenticeship programs, apprentices can earn college credit for their coursework and on-the-job training. This credit can lead to an associate’s degree and, depending on the industry, may also contribute to a bachelor’s or master’s degree

Although most of the apprenticeships in the U.S. are in skilled trades, like the construction or automobile industries, the concept is applicable to other occupations.  Medical doctors essentially participate in an apprenticeship structure through their internships and residencies for on-the-job training, combined with classroom learning. Expanding apprenticeships to other industries and marketing these opportunities to both unemployed and under-employed millennials could make a real difference in reducing unemployment.  Recruitment should be more reflective of the practice in Germany where a student decides on an apprenticeship in high school.   More apprenticeship initiatives are needed in Texas—both at the community college level and among employers.  An apprenticeship provides a young worker with an immediate job during training and an opening to sustainable long-term employment. A four-year degree is not the answer for everyone, as evidenced by the high unemployment rate. The German apprenticeship concept fits with how Millennials learn in terms of preference for a coach or mentorship type relationship, real time feedback, hands-on learning, opportunity for challenging work, experience with the internet, and clearly stated goals and due dates for earning certifications and degrees.  Employers should also factor in their desire for work-life balance by basing their performance evaluation on output rather than amount of time spent on a project to improve employee retention.  The average millennial changes jobs about every two years.

Now back to those iconic German gummy bears—the gelatin-based candy.  There seems to still be some comfort derived from their consumption by millennials as evidenced by the German manufacturer Haribo’s TV commercial, where millennial executives are enjoying the candy in a boardroom.  (You can catch it on YouTube, too.)  For a daily fix, vitamin companies like Nature Made have adult gummy vitamins now, too.

So, in closing, could training programs like Germany’s apprenticeship model help to reduce millennial unemployment and fill the high-demand skills gap? Based on my experience, first as an educator and science museum director while in graduate school at SMU, later as an economic development marketer and recruiter, and now as a corporate site location consultant, I strongly believe they play a critical role in skills training.  And, since no “participation trophies” are needed, perhaps gummy bears in the vending machines for rewards should be considered.

Linda Burns is a a site consultant for BDG/WDGConsulting