I’ve been mulling this topic over for the last 6 months. There is clearly something fundamentally wrong with our higher education system. It costs too much, educators and employers are not on the same page when it comes to what students should know after 4-6 years of education and there is not enough value placed on educating and training skilled craftspeople, technicians and other specialists.
It’s particularly interesting to see how divergent the paths of education and work are becoming. As the workplace becomes more gig-focused, forcing workers to keep their skill-set sharp and up-to-date, educators are focused on tenure and maintaining the status quo.
Here’s my take on top workplace trends and all the ways the education system is missing the mark.
The average economic return for going to college is falling.
- Since 2009 the cost of college has risen by 10.6% in real terms. Wages for college graduates have fallen by 0.1%, in contrast.
- 96% of college administrators think their graduates are ready for the work force, just 11% of employers agree.
- Over one-third of college grads are in jobs that don’t require a college degree
The gig economy is the employment of the future (hard to gauge the exact number of freelance/gig workers – anywhere from 50MM-91MM!)
- By 2020, Fortune 500 companies are projected to employ 50% of their workforces as contractors.
- Independent contractor tax forms (1099s) issued by businesses have exploded. Since 2000, 1099s have gone up 22%, while the traditional W-2 forms have stagnated.
- The gig economy is ideal for those with unique skill sets. For those going into or still in college, the biggest challenge will be finding a skill that lends itself to contracting, and developing those skills until they’re marketable.
- Changing of the guard: millennials and Gen Zs assuming leadership roles as 70MM baby boomers begin to retire.
- Robot-proofing your children’s careers as automation replaces more workers.
- Focus on trades, crafts and other jobs that don’t require a bachelor’s degree e.g. dental hygienist, electricians, technicians.
Read below for 16 findings on education, the gig economy and other workplace trends with links to specific studies. #8 is especially noteworthy if you are a freelancer.
1. Going to college may not be worth it anymore.
Goldman Sachs analysts said that the average economic return for going to college is falling.
For some, the “cost may not be justified” because it’s going to take a lot longer to pay off those student loans, given the rising costs of tuition.
Goldman notes that since 2009 the cost of college has risen by 10.6% in real terms. Wages for college graduates have fallen by 0.1%, in contrast.
“For the typical student the number of years to break even on the cost of college has grown from eight years in 2010 to nine years today. If current cost and wage growth trends persist then 18 year olds starting college in 2030 with no scholarship or grants will only start making a positive return when they turn 37,” Goldman’s Hugo Scott-Gall wrote.
2. University degrees start to become ‘irrelevant’ to big employers (from Australia)
Penguin Random House decided to drop degrees as a requirement for job applicants, following in the footsteps of major consulting firms Ernst and Young and PricewaterhouseCoopers.
The move comes as smaller employers are shifting away from hiring college graduates, believing students are coming out of university with “no real skills” or simply being taught the wrong things.
The value of tertiary education has consistently decreased in Australia over the past decade.
Graduate employment is the lowest it’s been since the 1992-93 recession.
The 2015 Graduate Careers Australia survey showed more than a quarter of bachelor degree graduates had failed to find work within four months of completing their studies. The money they’re being paid is on the slide, too, with university graduate salaries going down.
Meanwhile, soft skills, such as being personable, adaptable, possessing strong digital skills, and adept at time management are being increasingly valued.
Maggie Stilwell, managing partner for talent at Ernst and Young, which did away with academic and education details in its application process, said the new recruiting strategy would “open up opportunities for talented individuals regardless of their background and provide greater access to the profession”.
In an earlier interview with news.com.au Australia Chamber of Commerce and Industry chief executive officer Kate Carnell said employers found 20-somethings were showing up to work with degrees from universities but were “disconnected with the workforce”, she said.
“General issues are not understanding that a job is about turning up on time every day, not just when you feel like, that it’s about taking direction, and basic things like you’ve got to be well presented and you’ve got to be pleasant.”
3. Gap year before college: A new rite of passage
A growing number of educational experts and thought leaders have some counterintuitive advice: don’t send your kids to college . . . at least not yet.
Nationally, one-third of college freshmen don’t return for a second year. Kids take about six years to complete a degree, and only 9% of students from low-income backgrounds will have a degree by the time they turn 24.
The outlook for those who graduate is not what it once was: students are saddled by unprecedented levels of debt and few leave campus with the skills employers value most. One recent study showed that while 96% of college administrators think their graduates are ready for the work force, just 11% of employers agree.
A growing number of colleges have begun to embrace the “gap year,” a common practice across Europe and Australia, that has yet to take root in the United States.
Research shows undeniable, positive impacts in terms of increased maturity, confidence and achievement. A recent Middlebury study showed that students who take a year off before arriving outperform their peers in their academic and extracurricular engagement on campus. And the American Gap Association reports that students who take a year before college are 75% more likely to be “happy” or “extremely satisfied” with their careers post-college.
Given its known benefits, it’s time to rebrand the “gap year” as anything but a “gap.” When used intentionally, the year before college can be a bridge, a launch pad and a new rite of passage.
Bill Fitzsimmons, Harvard’s undergraduate admissions dean, wrote a manifesto about the need for students to take time off before college. Rick Shaw, Stanford’s undergraduate admissions dean, now speaks about the value of non-linear paths and the learning and growth that come from risk taking and failure, as opposed to perfect records. Princeton, Tufts and University of North Carolina at Chapel Hill have recently developed “bridge year” programs that encourage – and pay for – students to spend a year immersed in the world before arriving on campus.
4. How to robot-proof your children’s careers
Vast numbers of jobs will have evaporated by the time today’s pupils reach the labor market. Oxford university’s Carl Benedikt Frey and Michael Osborne say almost half of the jobs in the US are at high risk from computerization in the next two decades, together with two-thirds of those in India and three-quarters in China.
When the last wave of automation swept the developed world at the start of the 20th century, policymakers decided education was the answer.
But the next race will be against technology that replaces brains and brawn. Machine learning algorithms are already starting to supplant the likes of mergers and acquisition bankers and currency traders. Some experts argue we need to respond with another fundamental rethink of education.
So what skills should we teach our children to robot-proof their careers?
How to be creative
Artificial intelligence solves problems methodically but the human brain is far better at making logical leaps of imagination. It is more intuitive, creative and better at persuasion. Humans can also combine their creativity with robot-surpassing dexterity to cut someone’s hair, for example, or cook a delicious meal. “It’s good to invest in creative education because these are some of the skills that should be left [after automation],” says Stian Westlake, head of policy and research at Nesta, the UK innovation charity.
How to be nice – EQ
Some machines may have learnt how to seem caring but humans still have an unsurpassed ability to empathize with others. The new phrase is “EQ”, which stands for emotional quotient (or emotional intelligence). The high-skill, high-pay jobs of the future may involve skills better measured by EQs than IQs, by jobs creating social as much as financial value.
ING, the Dutch bank, has recently put 350 staff through an EQ training program. The aim is to teach bankers how to “build trust with the client through asking lots more questions and listening out for feelings and beliefs as opposed to just listening out for content,” explains Steve Ellis, director at Rogensi, a consultancy that developed the project with ING. Some bankers were initially resistant. But enthusiasm increased when staff saw the training had results. A survey by the company found people who had been on the course were more motivated, there was greater collaboration between departments and productivity increased by 10%.
5. What your college major says about your job potential
When you parse out the data by a graduate’s college major, results vary — a LOT.
Young graduates who studied chemical engineering are snagging the best paying jobs: $70,000 a year while new liberal arts graduates make $32,000 a year with an unemployment rate of 5.8%.
Graduates who majored in nursing dominate the job market making about $48,000 a year right out of school. Their unemployment rates are 2% or lower.
About 36% of young college grads are in jobs that don’t require a college degree.
Link to full article from CNN with statistics from the Federal Reserve here.
6. Does The Gig Economy Mean the End of Job Security for College Grads?
By 2020, Fortune 500 companies are projected to employ 50% of their workforces as contractors.
Companies both large and small want the flexibility to hire very quickly and change out skills when specific projects or initiatives spike.
It’s more secure in some ways, because the worker is not dependent on one employer for their livelihood; it’s a frame of mind and the dividends are considerable in the form of multiple opportunities and choices, the chance to grow professionally and the advantage of building a tremendous network during every engagement.
This type of arrangement works best for those for those who have a unique skill set that’s in high demand.
The rise of contractors has provided a lot of benefits for both employers and employees/contractors – and helps industries be more innovative and dynamic. Skills are shared and adopted more rapidly when you have specialists going into environments where a skill didn’t exist and helping the in-house team to get it integrated and mastered. In technology, a large part of American commerce depends on 3rd party vendors, which are staffed by contractors.
The increased shift toward a contractor-type workforce is also due to the wants and needs of millennials. The millennial workforce is driven by working on impactful, strategic projects, vs. entry level projects which would be typical for a new hire. Millennials have higher expectations for advancement opportunities and are motivated by frequent promotions and pay increases. For most students and grads, the biggest challenge will be finding a skill that lends itself to contracting, and developing those skills until they’re marketable. Once students have identified their marketable skill, they need to be committed to keeping those skills up to date.
7. The Gig-Economy Happiness Gap
Satisfaction with the on-demand platforms was highest among career freelancers (82%) and among “business builders” (83%)–who wanted to call the shots in their own careers and in 55% of cases owned small businesses.
Happiness was significantly lower among side giggers (65%) working on on-demand platforms to supplement income from another job and “passionistas,” who are doing work they love but don’t necessary need to make money from it (61%).
There are three key drivers of happiness in the on-demand economy, based on what the study found:
a. Having an independent work “risk profile.” Some people are cut out for the uncertainty associated with independent work and some are not.
b. Achievement of non-monetary objectives for being independent. Those who want to be their own boss or seek flexibility in their work tend to be satisfied with independent work–which delivers those things.
c. Reaching a minimum income target. Almost all independents tell us they have an income target and if they’ve hit or exceeded it they tend to be satisfied. An important point is absolute levels of income are not highly correlated with satisfaction. People making $25,000 per year tend to be as satisfied as people making $200,000 per year, assuming they hit their target.
8. Here’s what to expect in the freelance and contract gig economy for 2016.
It’s difficult to gauge exactly how large the gig economy is, but there has been an explosion of independent contractor forms (1099) issued by businesses. Since 2000, 1099s have gone up 22%, while the traditional W-2 forms have stagnated. In 2014 the number grew to an estimated 91 million – up from 82MM in 2010.
Freelance and contract marketplace Upwork sees approximately $1 billion worth of freelance work passing through its site annually, and is uniquely positioned to notice trends and spot hot tech buzz before it hits the mainstream.
What’s hot: virtual teams — What’s not: on-site work
More businesses will begin structuring themselves as “remote first” instead of “remote friendly” or “on-site only,” says Rich Pearson, senior vice president at Upwork. According to Upwork’s 2015 Freelancing in America research, one in three Americans freelanced in 2014, and 60% of freelancers are choosing to do so instead of being forced out of necessity. That gives businesses greater access to a more flexible, highly available talent pool that’s not restricted to a specific geographic area.
Tools like Slack and other virtual collaboration tools are making it so easy for teams anywhere to work together. The growth in 2016 is going to accelerate rapidly.
IT companies are also embracing remote workers as a way to address talent and skill gaps, and speed up time to hire, says Upwork’s Mateo Bueno, senior director of product management. The average time to hire a skilled, knowledgeable freelancer on a talent marketplace like Upwork is three days, allowing companies to move quickly on mission-critical IT projects. In addition, hiring from outside tech hubs like Silicon Valley or the New York City area can save businesses money.
What’s hot: Independent consultants — What’s not: Huge consulting firms
As enterprise services move to the cloud and technology becomes increasingly mobile-centric, business are turning to lean, independent consultants and freelancers with a strong integration background to serve their IT consulting needs and work individually with existing IT teams and other contractors. There’s no longer a great need for large, unwieldy teams of consultants who may move more slowly or can’t get their hands dirty on integration projects.
“We saw in 2015 that the number of businesses spending money on large IT consulting projects in our marketplace increased by 22 percent year-over-year. These larger projects indicate that more companies are enlisting independent consultants or small agencies for projects. At the same time, we’re seeing a slowdown in growth in the traditional IT consulting market that includes major firms,” Pearson says.
Smaller teams or individual freelance consultants often come with highly specialized skills and can work with almost surgical precision to get in, get the job completed and get out much more efficiently and effectively than a large, more generalized IT consulting team, he says.
What’s hot: Dynamic presentation skills — What’s not: PowerPoint skills
Companies are increasingly looking for new, dynamic ways to create and deliver corporate presentations, and PowerPoint just isn’t cutting it in the business world. Dynamic presentations with superior graphics and animation and the ability to be interactive is all the rage.
The amount of money businesses spent hiring for Microsoft PowerPoint skills decreased by 5% year-over-year, while spend for projects that need Prezi and Keynote skills increased by 23% and 18%, respectively.
9. Best cities for gig economy workers
54 million workers considered themselves freelancers last year. Here are top US cities with the most opportunities, according to Thumbtack.
Boston: In 2013, Massachusetts became the nation’s most concentrated tech hub. Boston has a tremendous startup culture. The Boston Business Journal reported that in 2015, Massachusetts companies pulled in a total of $7.42 billion in VC funding, which was invested across 531 deals.
Raleigh NC: As home to IBM’s Research Triangle Park, Raleigh is well-established in the scientific and tech industries. But there is plenty going on in the startup world there, too. In 2015, Raleigh was ranked as the top “hot spot” for tech startups and workers outside of Silicon Valley and San Francisco. There are currently 17 Raleigh-based startups seeking hires on AngelList, a job posting and funding website for startups.
Nashville: Nashville’s population grew by 6.7 percent in 2015. UBS has created almost 500 jobs in Nashville since 2014, and plans to add almost 100 more. AngelList lists more than 412 startups in Nashville that are hiring.
San Francisco: Silicon Valley is home to some of the world’s most innovative companies, Apple, Facebook, and Google among them. The bulk of the leading “gig economy” platforms, including Uber, are headquartered there.
10. Gig economy: do you have the personality for it?
The gig economy isn’t a passing fad. More than a third of the American workforce have been freelancers (that’s over 50 million people).
It’s increasingly difficult to describe our work in a single word (e.g. lawyer, engineer, nurse). Nowadays, for exampe, I’m a writer, advisor and speaker.
Gigging or freelancing isn’t just another job; it’s a way of life, and success requires a mindset that’s differs significantly from that required in the corporate world.
Here are three personality traits for thriving in the gig economy:
You Enjoy Risk And Adventure Rather Than Security
People with a need for adventure are motivated by risk, change, and uncertainty. They thrive when the environment or the work is constantly changing. By contrast, people with a high need for security look for continuity in their work life.
One of the hallmarks of freelancers who will thrive in the gig economy is the setting of big goals to achieve great things and maximize their potential. It’s on you; so if you’re not particularly into big urgent goals, success will be hard to come by.
You’re More Driven By Achievement Than Power Or Affiliation
People with a high need for achievement are focused on doing great work, even if it’s not always publicly recognized. And they often prefer either to work alone or with other achievers like themselves.
By contrast, people with a high need for affiliation want harmonious relationships with other people and want to feel accepted by other people.
The bottom line is that in the world of freelancers and the gig economy, you’re on your own. There isn’t a big (or even small) corporate brand or hierarchy to back you or cover-up poor performance. Your drive, ambition, goals, and performance will determine your success in this new world order. If this sounds terrifying, then entering the gig economy probably isn’t a good career move.
11. Macro Trends Shaping the Future of Work
In a recent SalesforceLIVE Series Pass, futurist and keynote speaker, Jacob Morgan shared trends shaping the future of work:
A Changing Workforce
Over the next 20 years, more than 70MM baby boomers will retire, and the workplace will be dominated by experienced millennials and Generation Z employees who both expect employers to focus on community, gratification, and feedback.
Social technologies and the collaborative economy have changed the way we communicate, collaborate, and present ourselves to the world. We get into the cars of random people with Uber, share personal information on Facebook, post our entire professional history on LinkedIn, rant and muse on Twitter, and share intimate moments on Instagram. This open social behavior permeates and links our personal and professional lives like never before.
Smartphones and connected devices mean employees are available at all hours, and businesses are able to quickly connect with employees and clients all over the world. On the flip side, mobility has removed the traditional 9–5 working mindset and created more cohesive work-life integration, so employees can be responsive from the soccer field or from an exotic vacation destination.
Due to incredible infrastructure advancements, high-speed connections, and inexpensive collaboration apps like Skype and Google Hangouts, employers are able to tap into top talent, and professionals can pursue exciting opportunities, anywhere in the world.
Technology is changing the way the world conducts business, inside and out. With internal social networks, we can stay connected anywhere, anytime, and on any device. With cloud computing, the power of technology is placed into the hands of employees and customers. With big data and analytics, we can extrapolate insights that help us become more relevant, useful, engaged, and productive.
12. 25 Highest Paying Jobs in America for 2016
According to Glassdoor’s latest report highlighting the 25 Highest Paying Jobs in America for 2016, physicians, lawyers and research & development managers are bringing home the biggest paychecks.
“High pay continues to be tied to in-demand skills, higher education and working in jobs that are protected from competition or automation. This is why we see several jobs within the technology and healthcare industries,” said Dr. Andrew Chamberlain, Glassdoor Chief Economist.
13. The 27 highest-paying jobs that don’t require a bachelor’s degree
There are plenty of high-paying jobs that only require a two-year associate’s degree or just a high school diploma.
According to the latest data from the US Bureau of Labor Statistics, these are the 27 highest-paying jobs that you don’t need a four-year degree to pursue. Each has a median annual salary of at least $60,000.
Dental hygienists e.g. make over $70K a year
14. Biggest workplace trends
2016 is the year the first college graduates of Generation Z (born between 1994–2010) will enter the workforce
Along with Generation Z, other workplace trends that will have a significant impact on office life include: Boomerang employees, folks who leave a company and return at a later stage, will become more acceptable. Workspaces will become more collaborative. Maternity leave will become an even bigger topic than it is already.
Other workplace trends include: baby boomer retirements, more automation replacing workers, workplace flexibility, sharing economy,
15. Digital Skills Help Narrow the Workplace Gender Gap
Digitally savvy women and digital fluency play a key role in helping women achieve gender equality and level the playing field.
A new research report from Accenture, Getting to Equal: How Digital is Helping Close the Gender Gap at Work, provides empirical proof that women are using digital skills to gain an edge in preparing for work, finding work and advancing at work. The report provides ample evidence that digital fluency acts as an accelerant at every stage of a woman’s career — a powerful one in both education and employment, and an increasingly important factor for advancing into the ranks of leadership.
While the research determined that digital fluency is having a positive impact on pay for both men and women, the gap in pay between genders is still not closing. Men are, by far, the dominant earners by household across all three generations – Millennials, Gen X and Baby Boomers.
“There are many ways to narrow the gender gap in the workplace, but digital is a very promising avenue,” said Julie Sweet, Accenture’s group chief executive for North America. “This is a powerful message for all women and girls. Continuously developing and growing your ability to use digital technologies, both at home and in the workplace, has a clear and positive effect at every stage of your career. And it provides a distinct advantage, as businesses and governments seek to fill the jobs that support today’s growing economy.”
16. Where is the next generation of craftsmen?
Limited supply of skilled laborers is making it difficult for home professionals to grow their businesses, according to HomeAdvisor’s Skilled Labor Shortage Report, released today.
Highlights of the 2016 Skilled Labor Shortage Report include:
Trouble hiring skilled labor is preventing businesses from growing, as 93% of those surveyed believe their business would grow over the next 12 months if not for hiring challenges.
Plenty of jobs are available, but limited resources for training new skilled laborers may be creating a barrier to entry. Professionals surveyed expressed the desire for additional resources when entering the home services industry, including trade schooling, mentorships, and trade associations.
Negative perceptions and lack of exposure to the industry may be limiting new entrants into the field, especially among Millennials, as 61% of those surveyed agree that there is a lack of exposure to skilled labor professions for younger generations.
Over 50% of skilled laborers credit entrepreneurship and business ownership as reasons for choosing their current professions.