New Study on Willingness to Train of Firms in Colorado
Welcome again to the CEMETS blog. This entry is on the new KOF Willingness to Train survey in Colorado. This report has a lot of information and insights on training and skills in the U.S. state of Colorado. It is an application of the KOF Willingness to Train survey and its three key findings are that there is a skills shortage in Colorado, that the most important skills are best learned at work, and that companies are interested in starting new training programs but these have to make financial sense.
By Katie Caves
The new report on the KOF Willingness to Train survey in Colorado has a lot of information and insights on training and skills in the state. It reports survey results from 377 companies in Colorado. Our goal is to find out what companies think about the availability of skilled workers, where additional skills should come from, and what kind of training programs would be feasible to introduce in Colorado. We finish the report with some recommendations for improving skills and training.
There are three key findings on which we base our recommendations. First, there is a skills shortage in Colorado. Second, the most important skills are best learned at work, not school. Third, companies are interested in starting new training programs but they have to make financial sense. Let’s get into those three in more detail.
There is a skills shortage in Colorado
Skills shortage is made up of three main features: long-lasting vacancies because jobs are hard to fill, skills mismatch because companies aren’t satisfied with the skills their new hires have, and growth effects because companies report the lack of skills slows their expansion. Colorado has all of these. Unskilled vacancies stay open for four weeks—close to the national average—but skilled vacancies take seven and a half weeks to fill. When we asked companies to rate the skills of their new hires, their scores were just barely above neutral at 3.2 on a 1-to-5-point scale. Most dramatically, 80% of responding companies said skills shortage is slowing their growth, with 50% saying the effect is “moderate” or “significant.”
Figure 1: Effect of skill shortage on company growth
All of that adds up to a situation where Colorado doesn’t have the skills it needs. If that’s the case, where should new skills come from? That brings us to our next point.
The most important skills are best learned at work, not school
We asked companies to rate the importance of six “hard” skills and nine “soft” skills. We also asked them “Where do you think these skills can best be learned?”, with the options of work, neutral, or school. For every skill except Advanced Math and Communication, companies reported that the best place to learn is work. Since companies consider work the best place to learn critical skills, this is a clear sign they should be hugely involved in training programs.
Table 1: Skills demand, supply, and ideal learning location
This tells us that companies can be convinced to engage with new training programs that combine workplace learning with the classroom-based education that’s already happening. Since that’s the case, what kind of programs are they willing to work with? This brings us to the third main finding.
Companies are interested in starting new training programs but they have to make financial sense
Colorado companies already participate in some training programs, but they are mainly short-term, job-specific, and aimed at participants in their mid-to-late-twenties. If they are going to start new programs, they prefer trainees who are younger and want high quality. Most importantly, companies want training programs that generate enough returns to cover their initial investments. The best dual school- and workplace-based training programs around the world are able to return investments to training companies, so that is a reasonable goal. The key is that Colorado companies will have to embrace cooperation with education institutions and with one another—independently or through intermediaries—to create an ecosystem that supports cost-effective training.
Figure 2: Cost-effective training requires an enabling ecosystem
Recommendations
Based on those three main findings and the rest of the information covered in the report, we make the following recommendations for Colorado:
- Create a platform for dialogue among companies, educators and administrators to address the findings in the report
- Establish industry-level or occupational training programs that combine classroom education with workplace training
- Design programs so that benefits exceed costs for companies:
- Balance costs from participants’ wages with benefits from participants’ productivity and program length
- Support companies and intermediaries as they set up training programs
- Minimize financial subsidization to companies
- Ensure the quality of workplace training:
- Emphasize curriculum-guided workplace training in all programs
- Provide recognized credentials upon successful completion
- Empower intermediary organizations to establish state-wide linkage between actors from the employment and education systems.
You can find the full report here, and we’ll go into detail on this topic in the next two posts when we share our infographic summaries of the report.