BOSTON—Jan. 25, 2021—The pace of technology-fueled change is quickening and, with it, the acceleration of global labor market transformation. Millions of jobs are being displaced, but millions more are being created. The good news is those new jobs tend to pay more and offer better career opportunities. In fact, Bain & Company found that the fastest-growing job categories are six times more likely to pay over $100,000 than the slowest growing categories. These jobs are also about half as likely to be displaced by automation.
Despite the abundance of new, more lucrative jobs, employers are struggling to fill these positions, and young people are struggling to access them. Youth unemployment in the US, for example, is nearly twice the total unemployment rate. Youth underemployment—which measures the number of young people who have more education than their job requires—has also remained high in the US, with 40% of recent college graduates qualifying as underemployed.
These are challenging times for employers and students alike. Good jobs increasingly require more than a high school education and current education-to-employment pathways are too often failing the students they serve.
According to Bain & Company’s new research, nearly half (49%) of bachelor’s degree holders pursue further career-focused education to find a job after graduating, meaning they must take on more debt when they could be earning an income. When looking at one large university system, Bain found that only one in five entering freshmen ultimately go on to earn a family sustaining wage one year after graduation.
The sobering truth of these findings is not lost on students and their families: there has been a downward trend in US college enrollment over the last decade. Bain’s research also shows only half of recent graduates report feeling financially stable, and two-thirds of young people feel unfulfilled in their careers or pessimistic about the future.
Employers also bear responsibility for low-flow talent pipelines as they traditionally focus on hiring ready-to-go talent, with at least a bachelor’s degree in hand. Bain’s research found that 60% of good job postings—those that pay above a living wage and have limited vulnerability to automation— require at least a four-year degree, yet only about a quarter of jobs actually require the specific skills taught in those programs. Currently, only 28% and 21% of US Black and Hispanic adults, respectively, own a bachelor’s degree or higher, putting the majority of these populations out of the running for most good jobs. Therefore, employers’ continued reliance on four-year degrees also heavily skews the demographics of their applicant pool, limiting the diversity of their workforce.
The solution: Career-connected learning
Career-connected learning (CCL) is the key to making those opportunities available to students who too often find access to such jobs beyond their reach. Well-designed CCL pathways close that gap by combining classroom learning with meaningful on-the-job work experience that leads to door-opening postsecondary degrees and credentials.
“Done right, career-connected learning is among the most effective ways to create meaningful opportunity for young people from all backgrounds,” said Abigail Smith, a leader in Bain & Company’s Social Impact Education practice. “It’s a better, more engaging education experience while also offering employers a sustainable, profitable way to find great talent from a deeper and more diverse talent pool.”
Since its last report on the topic in 2019, Bain & Company has spent three years working to accelerate career-connected learning in partnership with educational organizations, employers, and governments and intermediaries seeking to address this opportunity at scale. Forward thinking education providers are rising to the challenge by elevating career outcomes, aligning what they teach with workforce needs, partnering with employers to develop “study-and-work” experiences for students, and creating clear pathways to valuable credentials. Leading employers are moving quickly to adapt their hiring and talent-development practices by embracing skills-first hiring, creating apprenticeship programs and building more robust career pathways for their employees.
Some countries, such as Switzerland, Australia, Germany and Singapore, have scaled highly effective CCL systems that are both student-centered and market-driven. They’ve rejected the false dichotomy between “academic instruction” and “career education” and built educational pathways that provide both, while meeting the needs of students and employers alike. In the US, some states are building robust systems, meeting employer needs at scale, and are fundamentally changing the lives of young people.
Bain hopes this new report will accelerate progress by shining a light on how the most effective CCL systems are succeeding, highlighting potential pitfalls to be avoided, and providing a blueprint for sustained economic growth, powered by equitable career access and outcomes for all students.
“Some companies will thrive through this labor market transformation while others falter, but most industries, and most economies, will be net beneficiaries of the accelerated pace of innovation,” said Chris Bierly who leads Bain’s Social Impact Education practice. “The open question is how this impacts society. We have a once-in-a-generation opportunity to broaden the pool of young people who have access to the good jobs and careers that will be increasingly plentiful in the years ahead.”
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