Frustrated that training, to the tune of $80 billion, isn’t doing the job for both employers and employees, the U.S. Chamber of Commerce Foundation is doing something about it.
On Sept. 21, the group announced a new program, Talent Finance, to figure out ways to invest in skills that will help employers fill open jobs.
“In the 21st-century economy, jobs—and the skills required to fill those jobs—change rapidly, but the preparation of students and workers is based on a different era and economy,” the group said. “We are launching this initiative to catalyze business-led solutions to close that skills gap.”
The group wants an up-to-date model to address the skills gap.
“Public and private sector financing innovations combined with access to better data and more robust employer leadership, set the stage for restructuring how we finance and manage the risks in talent development for all relevant stakeholders,” says Jason Tyszko, vice president of the U.S. Chamber Foundation’s Center for Education and Workforce. “Therefore, we need a talent finance approach fit for our time, not one built for past economies and labor markets.”
The Chamber points out that current approaches to talent development—like preparation of students to enter the workforce or re-entry of the unemployed—fail to fully address needs and emerging risks of the labor market, such as changes in employment and frequent fluctuations in income.
The goal of Talent Finance is to develoop new ways for employers and the financial services community to work together to identify innovative private-sector tools for financing talent, develop new strategies for managing risk in the labor market, and manage how to pay for workers to get and constantly refine the skills they need. This framework is outlined in a white paper, which includes recommendations for how to design and implement real-world solutions to these challenges.
Key Talent Finance Takeaways:
This new public-private approach to talent finance – including risk assessment, measurement, and management – “must promote global competitiveness and expand opportunity and improve diversity, equity, and inclusion in the talent marketplace
The report reached some conclusions:.
- Employer talent-on-demand strategies and traditional government-funded supply-side approaches have separated work and learning and contributed to a growing skills gap.
- This skills gap is likely to grow because of the rapidly changing skill needs of employers, shifting employment relationships, and growing lead times and costs in developing talent through traditional government-funded pathways.
- Improving signaling and communication between employers and government-funded providers and promoting and strengthening partnerships can only go so far in closing the skills gap.
- We now need to change the incentives for employers and government to work together as part of a new public-private approach to talent development that can scale promising employer, private sector, government, and service provider innovations.
- We also need to change how we identify, assess, measure, and manage new and changing risks as well as how we provide incentives for employers and government to work together to manage the related employment and income risks of the new economy.
- Public and private innovations in talent finance including new approaches for measuring and managing risk will require the expansion and modernization of data and technology systems.
Over the next several months, in partnership with the Federal Reserve Bank of Atlanta, Society for Human Resource Management (SHRM), Greater Houston Partnership, and WorkingNation, the Foundation will host a series of virtual forums for employers across the country to share strategies to better prepare today’s workforce for the future.
“I am confident our partnership will spur innovative public-private collaborations that will advance opportunities for workers,” said Raphael Bostic, CEO of the Federal Reserve Bank of Atlanta. “Importantly, the initiative’s commitment to finding new financial models means that we will be able to bring successful innovations to scale, thereby helping to provide significant capacity for small and mid-sized businesses.”
Talent Finance is made possible by funding from JPMorgan Chase, MSFT Philanthropies, Google.org, Cognizant U.S. Foundation, and Schmidt Futures.