“Outsourced to Detroit.” It’s such a catchy slogan, you can get it on a T-shirt. It’s also a serious strategy for tech firms including Compuware and companies with big technology departments—such as Intuit’s Quicken Loans—that are taking a gamble on moving to the hard-luck city instead of sending IT business overseas.
After all, Detroit has plenty of cheap office space. And a lot of people out of work. Michigan has the 11th-highest jobless rate among the states, in a nation with nearly 13 million people unemployed.
Yet, despite the good intentions and a sea of people desperate for jobs, high-tech companies are having some difficulty finding enough employees with the right skills. “There’s just a shortage of supply,” says Ryan Hoyle, director of global recruiting for GalaxE Solutions, which has also opened in downtown Detroit. GlaxE, Compuware, and Quicken have a combined 500 jobs they can’t fill, Hoyle says.
Another 2,000 jobs are going begging at companies around Detroit that design, build, and maintain computer-numerical-control machine tools. And the many firms working in the fast-growing field of hybrid technology in this automaking capital have more than 1,000 vacancies among them.
“Southeast Michigan is out of engineers,” says Greg Moss, senior specialist in training and industrial design at Japanese auto-parts-maker DENSO International’s Southfield, Michigan office.
It’s not just southeast Michigan that has this problem. There are more than four million unfilled jobs nationwide, according to The Conference Board—many of them in engineering and the sciences. In his 2012 state-of-the-union speech, President Barack Obama said he hears from business leaders “who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the jobs.”
There are a lot of reasons for this gap. One is a wave of retirements, with more to come. Meanwhile, among other things, the old-fashioned kind of outsourcing to places such as India and China has discouraged Americans from technology careers; the number of engineering degrees being awarded is slowly declining, the Census Bureau says, even as demand is skyrocketing.
But employers and policymakers also complain that there’s a growing disconnect between university graduates’ skills and workforce needs. Increasing numbers of graduates of four-year universities “don’t have the skills to get the jobs in the new economy,” says U.S. Secretary of Education Arne Duncan. Forty percent of college graduates lack the skills employers need, according to the National Governors Association, at a time when two-thirds of available jobs will soon require at least some post-secondary education, compared to less than one-third in 2008.
“What you have is a classic supply-demand mismatch,” says Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. Universities, he says, “are not meeting demand. The system has been underproducing, both on quality and quantity.”
Universities and industry speak different languages, say people on both sides of this divide. “It used to be that if I went to a university and said I need a person with these skills, they would say, ‘Who cares? You’ll get a person with those skills,’” says Randy Champagne, a hybrid battery system engineer at GM.
But competition from for-profit schools like the University of Phoenix, whose enrollment has increased six times faster than enrollment at conventional nonprofit universities, is changing that attitude. So is money, in the form of government grants aimed at workforce training and pressure from corporate funders. These have helped compel universities in southeast Michigan to add a collective 37 courses on hybrid engineering. “We’re collaborating as businesses to have a louder, stronger voice to say to the colleges, ‘Here’s what we need,'” says Hoyle.
But universities are also hobbled by something beyond their control: a lack of real-time data about labor needs. In greater Detroit, the need for workers skilled in computer numerical control, for example, plummeted in the period leading up to 2010—the last year for which the Bureau of Labor Statistics has published data. So universities cut their programs.
But demand has since rebounded. “It used to be that you could look at your past to predict your future,” says Lisa Baragar Katz, director of the Workforce Intelligence Network for Southeast Michigan. But given the speed with which technology industries are changing, she says, “basically the data was telling us the complete opposite of what was happening.”
A new effort by the organization Jobs for the Future is using “spidering” and artificial intelligence to mine online job ads for real-time information about hiring and skill needs. Its early conclusion: The gulf keeps getting wider.
“The urgency around having workers who are ready to go now is only going to increase,” Katz says. “So there is going to be increased tension between what our academic institutions think they should provide and what the employers say they need.”
Do you believe there’s a disconnect between STEM education and training and workforce demand? How do you think this issue can be addressed?