ACT Issues Report on Measuring Workforce Skills Gaps

IOWA CITY, Iowa—ACT today released a research report designed to assist economic and workforce developers as they contend with the increasing mismatch, or skills gaps, between labor market supply and demand in America. As the nation grapples with the effects of the deepest recession in recent memory, policymakers struggle to find ways to integrate the millions of unemployed workers whose current skills may not be adequate. The new reality is that a significant segment of today’s labor force does not have the requisite skills that employers demand. The report, “A Better Measure of Skills Gaps,” (PDF, 24 pages) proposes a simple definition to describe the skills gap phenomenon and sets forth detailed and specific measures to analyze skills gaps in four major industry sectors. With this paper, ACT recommends a balanced approach for skills gap analysis that incorporates rigorous quantitative methods with an eye for practical application. “Far too often and for too long, economic and workforce developers have relied on educational attainment data extracted from government sources such as the U.S. Census or the Bureau of Labor Statistics as a proxy for skill level,” said Martin Scaglione, ACT president of Workforce Development. “We suggest that skills gap analysis must target accurate and identifiable skills, and that these skill levels can and should be measured independently of educational attainment. In fact, research since 2007 shows undeniably that work tasks and the skills needed to perform them have become a better predictor of employment and wage growth than either educational level or occupational title.” Three of the key findings described in the paper include:

• Significant foundational skills gaps exist for United States workers and job seekers tested with WorkKeys^® skills assessments, possessing both middle and high levels of education, for jobs that require a similar level of education.
• For manufacturing, healthcare, construction and energy-related target occupations requiring a middle or high level of education, the majority of U.S. WorkKeys examinees are not able to demonstrate the required skill level for locating information. This skill involves the ability to locate, synthesize, and use information from workplace graphics such as charts, graphs, tables, forms, flowcharts, diagrams, floor plans, maps and instrument gauges.
• Caution should be used in considering indirect measures of skills as a substitute for actual skill level. The results of ACT’s analysis imply that level of education does not necessarily relate to gaps in foundational on-the-job skills; in fact, it seems that the gap in foundational skills demanded by employers widens as the level of education increases.

ACT has compiled an extensive database of occupational profiles to identify foundational skill levels needed for success in each occupation. These skill levels, based on ACT WorkKeys skills assessments and powering the National Career Readiness Certificate, provide a means to identify workforce capabilities as well as mobility within the workforce, as workers consider training for new, high-demand occupations.