There’s an interesting phenomenon where adjacent fields or industries adopt their own vocabularies and ideas around solving essentially the same problems. A simple example is econometrics and data science – listening to an economist and computer scientist speak about these fields, you wouldn’t notice they were often talking about the same thing. Another example is behavioral economics and human-centered design – both fields have developed to explore similar aspects of human “irrationality” but employ quite different approaches to this end.
Over the past few months, I’ve noticed another one of these gaps, and I am increasingly concerned about its negative impact on economic prosperity in the US. This is the gap between the workforce development sector and the people analytics field. “Workforce development” is a broad term generally applied toward education-like investments in the skills and capabilities that will give workers economic opportunity. It’s essentially the broad umbrella for things like re-skilling and up-skilling, as well as career and technical education (CTE) for young adults. “People analytics”, generally speaking, refers to the analytical tools that help managers make decisions about their employees or workforce.
A recent PWC CEO survey touched on the challenges in opportunities in both of these fields. The report highlighted the skills gap and the need to revolutionize HR with more analytics as distinct business challenges. However, I think our economic future requires that we understand and approach these problems as one in the same. The gap between these two fields can be seen who their primary target populations are, who is doing the work, and where their primary touchpoint is in the human-capital-to-employment lifecycle. I’ll explain each of these gaps and why they need to be closed in order for the US to solve deep, systemic problems like socioeconomic inequality, a growing skills gap, and declining global competitiveness.
Who is the target?
Workforce development has traditionally been centered around access to middle-skill jobs such as industrial manufacturing and the skilled trades, while people analytics as a field arose to address the unique circumstances faced by knowledge workers in 21st-century workplaces. While these seemingly seem like entirely separate segments of the US labor force, deep secular changes like automation and globalization will continue to push more and more of today’s low- and middle-wage workers out of traditional industries and into growing sectors like technology and human services. In general, more and more jobs across the income distribution are shifting in their skills composition from physical/sensory-focused to social/cognitive-focused, and this means that the tools of people analytics can start to be applied to industries traditionally thought of as more blue-collar. More specifically, people analytics, when applied to these industries, can become a driver of economic mobility by turning the workplace into a more supportive and enriching environment for those that are currently left out.
Who is doing the work?
Workforce development is, generally speaking, a “supply-side” approach toward our labor markets. Its leaders — typically supported by the social and public sector — focus on cultivating workers’ human capital, primarily through educational interventions. The theory of change here is that investments in human capital lead to better opportunities and higher wages for workers. People analytics comes at our labor markets from the “demand-side”. In forward-thinking firms, People Analytics practitioners are leading the transformation of HR from a compliance-focused cost center to a strategic function that can drive top-line outcomes through changing employer practices. Unfortunately, this gap in the supply and demand side of our labor markets has grown into a chasm, with the education and workforce development sector largely failing to teach the most in-demand skills and employers investing less and less in worker training and development each decade. We need a new category of people analytics solutions that are adopted by both groups of stakeholders, bringing employer ROI thinking into the workforce sector and deeper employer commitments to learning and development.
What is the touchpoint?
Related to these gaps in the primary stakeholder driving each sector, there is a gap in each field’s primary touchpoint in the whole education-to-employment lifecycle. Workforce development interventions, generally focused on education and training, often stop with job placement. There is a shortage of creative thinking and investment in career success, promotion, and advancement. Meanwhile, the people analytics “value chain”, while not entirely constrained to incumbent workers, tends to begin with recruitment and hiring. It’s unsurprising to see employers fail to reach further upstream into the prospective talent pool in order to influence human capital attainment and the capabilities of their prospective employees, without a more direct profit motive. However, the tools of people analytics may enable employers to identify opportunities to make these investments that positively impact their business. Moreover, several structural changes in our labor markets and economy are going to start breaking down these siloes. First, we face a growing skills gap in technology, healthcare, and advanced manufacturing. To maintain global competitiveness, employers may need to start investing in the technical education of broader swaths of workers. Second, we see the “micronization” of education and the rise of life-long learning; this education-to-employment lifecycle is likely to become more of a loop as careers become longer and technology only accelerates the changing job requirements. Both the workforce development and people analytics sectors need to expand their approaches to play a role throughout the whole education-to-employment(-to-reeducation-to-employment) lifecycle.
Our economy and labor markets are in desperate need of innovation towards a more integrated and cohesive approach to human capital attainment, the skills gap, and economic competitiveness. Countries like Germany, Switzerland, and the UK have developed deeply integrated workforce development systems, bringing both the supply (education) and demand (employers) side together to prepare their workforce for long and fruitful careers in strategically important industries. Bringing people analytics and workforce development under one roof to close these gaps may help set the US on a new path forward.