Recommendations: The Responsibilities of Providers and Employers

One clear advantage of examining several different local labor markets is that it has been possible to detect both strengths and weaknesses. Some problems in sub-baccalaureate labor markets appear to be present in all local areas--the problem of inadequate basic skills, for example. Others--like the weak connections between educational providers and employers--are present in some local areas (notably Frankton) and in some occupational areas in other labor markets (e.g., business occupations, accounting, and drafting in Rosefield and Palmdale) but are strong elsewhere, notably in some electronics programs and in the co-op programs in Cotooli. The varying responses, across different labor markets and occupations, provides some basis for recommendations. In particular, we see five areas in which there is need for reform.

Basic Skills, Remediation, and Academic Content

The employers we interviewed added their voices to a swelling chorus lamenting the sorry state of basic skills--reading, writing, and simple arithmetic. There are, of course, many reform movements now attempting to reform secondary schools--for example, to attempt new forms of teaching; to restructure schools; and to provide more focus to high schools, including more occupational focus (Andrew & Grubb, 1992; Grubb, Davis, Lum, Plihal, & Morgaine, 1991)--with the potential for improving the quality of high schools. There is a role employers can play in these efforts in clarifying to students the disastrous consequences of failing to master basic competencies during high school. What was most compelling in our interviews with employers was the fervor of their comments about basic skills and their convincing portrayal of an increasingly competitive world in which individuals without basic skills stand no chance of ever entering careers with increasing responsibility and pay. This state of the labor market needs to be communicated to students since it is clear that their expectations about the work world are frequently uninformed and unrealistic.

Among postsecondary institutions like community colleges and technical institutes, remedial education (sometimes termed developmental education) has increased enormously, in some cases threatening to take over all other purposes. However, remediation has never been given the stature or the resources or the attention to effectiveness that other aspects of education have had. The result is that while remedial programs in community colleges appear to be more effective and innovative than they are in adult education, turnover is still high and effectiveness largely unrealized (Grubb, Kalman, Castellano, Brown, & Bradby, 1991). Given the volume of complaints by employers about the individuals in sub-baccalaureate jobs, it is clear that the occupational functions of community colleges--their roles in initial training and retraining--cannot be successfully fulfilled unless they remedy any basic skills deficiencies their occupational students have. In turn, this probably requires experimenting with different teaching methods, including methods of providing basic skills instruction within the context of occupational programs.

Within occupational programs themselves, a clear implication of employers' complaints is that an emphasis on technical or job-specific skills is inadequate. Aside from problems related to outdated equipment and methods, the dominant complaint from employers is not that community college students need more job-specific skills but that they lack more general competencies--especially communications skills and problem-solving abilities--necessary to move from entry-level jobs to more responsible positions. There are many ways of integrating more general and more "academic" competencies into occupational programs (Grubb & Kraskouskas, 1992), but such integration needs to be considered central to occupational preparation, not peripheral or secondary. In a world where production requires a greater range of responsibilities among employers, technical job skills are not enough--and those who have only technical skills will be relegated forever to entry-level work.

The community of employers is sometimes ambiguous about this point. At the same time that the vast majority of employers complained about deficiencies in basic skills and certain "foundation skills," a substantial number in our sample castigated educational institutions for including academic requirements that they consider unrelated to work--general education requirements, for example. They seemed ready to strip occupational programs of any elements not narrowly job-related, and they praised the specific focus of customized training. But general education and other "academic" requirements may be precisely the places where students best learn more general competencies even though there are many ways in which the relationship of such courses to employment-related competencies could be clarified. If employers as a whole find their employees deficient in certain general competencies, they need to support the efforts of educational institutions to develop broader occupational programs, not criticize the inclusion of elements that seem irrelevant.

Information in the Local "System"

A second area for reform involves improvements about the options available to prospective employees and the consequences. The dearth of information among educators and policymakers, the frequent comments about the unrealistic expectations of new entrants into employment, the large amount of "milling around" in community colleges, and the evident mismatch between some community college programs (e.g., in business occupations and computer applications) and the reality of the occupations available suggests that there is insufficient information for students to make rational decisions. An obvious recommendation is for local institutions--prodded by state and federal policy where appropriate--to take steps to improve the information available to students considering jobs in sub-baccalaureate occupations.[111]

There are, of course, many ways to improve the information now available. One would be to collect better information about the short- and long-run employment effects of different local programs and make that available to students through, for example, placement offices--very different from and much more active than current placement offices--within specific educational institutions. Another would be to establish community-wide information centers with state and federal support that can provide information on the variety of education and training programs in a community, not just those in a specific institution. These might be like the local Employment and Training Boards proposed by America's Choice (Commission on the Skills of the American Workforce, 1990, p. 87) that would have a variety of planning and coordinating responsibilities in addition to information provision. Still another possibility would be to establish special-purpose information centers whose mission is to act as advocates for prospective students, providing them information about the alternatives available unburdened with other administrative responsibilities that might shade the information they provide individuals. While each approach has advantages and disadvantages, any way of increasing information would be a substantial improvement over what now exists, where anecdote and ignorance prevail.

Strengthening Connections to Employers

We found the connections between postsecondary education institutions and local employers to be highly variable. In some cases--particularly the technical and community colleges near Cotooli--they were extraordinarily close; almost all employers were familiar with local institutions and several had carried intensive examinations of which were best suited to their needs. In other cases--Frankton being the best case--the local community college is simply fooling itself about its image in the local employer community. Such variation is to be expected, of course, given the wide variety of labor markets and of ways in which community colleges practice; but the occupational programs in institutions with poor connections to employers can only accidentally provide their students with entry into middle-level occupations.

Each of the ways in which educational institutions can be connected to employers merits separate scrutiny:

• Advisory committees in some institutions meet infrequently at an institution-wide level and cannot provide anything more than simple public relations; in other community colleges, they serve as important conduits for information from employers to particular programs. Improving the nature of advisory committees is not especially difficult, though it requires both time and an orientation to the external community that some institutions may not be able to muster.

  However, even the best-structured advisory committees are beset by certain structural problems and therefore cannot be--as they are in many community colleges--the principal or the only form of connection to local labor markets. The information provided by employers is sometimes often inaccurate because of which individuals serve on committees; it is sometimes inadequate when firms are unwilling to reveal their plans or simply not useful when firms are unable to plan their own hiring very far in advance. Unlike the establishment of co-op programs, where the relationship with employers has a specific goal and the employer must commit certain resources (co-op placements), the work of advisory committees is often amorphous. One solution is to develop advisory committees committed to specific tasks--for example, modernizing a curriculum or collecting local follow-up studies or assessing which general or "foundation" skills are in short supply or developing a certification of occupational skills--in which both employers and the educational provider have a stake.
  
  

• The placement function has been neglected in most community colleges, which continue to think of themselves as educational institutions and not placement bureaus. That characterization is inadequate partly because students seeking entry into the sub-baccalaureate labor market require information as well as job-related skills and partly because a well-operated placement function can provide information to the institution about the strengths and deficiencies of its occupational programs. Strengthening placement--whether through a placement office, through the placement efforts of individual faculty, or through an external agency like a local employment and training board--requires a much more active approach to collecting information about job openings and certainly requires a shift in focus away from the kinds of part-time, "stay-in-school" jobs now emphasized in most placement offices. The experience of other programs, especially the job development efforts of programs like JTPA and JOBS, provides another model of how stable relations with employers can be developed and both improve the placements rate of completers and provide additional information about job requirements.
  
  
• Student follow-up and tracking is virtually nonexistent in most postsecondary institutions, and the result is that most community colleges and technical institutes know virtually nothing about what their students do and, therefore, about whether their occupational programs are successful or not. The prevalence of anecdote and fable is nowhere more apparent than in the answers to questions about what students do when they leave these institutions. Furthermore, the absence of such information leads to problems elsewhere; for example, it is difficult to provide better information to individuals about their options in sub-baccalaureate labor markets without data from tracking students.

  There are several federal initiatives that may promote better and more comprehensive follow-up mechanisms, especially the performance measures of the Carl D. Perkins Vocational Education Act and the placement rates that will be required by the Student Right-to-Know Act. However, such efforts ought also to be undertaken by local institutions and through state policy. The development of low-cost methods of tracking students through the unemployment insurance system (Baj et al., 1991) should make the development of such information easier and more accurate. The intent need not be punitive (e.g., the closing of nonperforming programs) but rather supportive of better quality, increasing information about performance so that institutions can improve their programs and strengthen their connections to employers where placements are low. In turn, this information will benefit prospective students as well and improve our understanding of sub-baccalaureate labor markets by examining where placement rates and earnings are high and low, how employment effects vary from region to region, how consequences vary over the business cycle, and how trends in the sub-baccalaureate labor market affect students entering through educational institutions.
  
  

• Contract education is booming in most areas, and community colleges have profited by the increased attention to the skills of subprofessional employees. However, when contract education is isolated from the regular vocational offerings, the additional contacts with employers cannot benefit the regular programs where the bulk of students are enrolled. The possibility of developing a two-track system in which contract education is responsible for the high reputation of educational institutions among employers and provides mobility for those who have managed to gain access to firms investing in continuing education while the regular programs remain distant from employers and provide uncertain access to middle-level jobs and careers is particularly dangerous. While many institutions have consciously established contract education independent from occupational departments, they need to reconsider the advantages of a tighter integration.
  
  
• Co-op programs appear to be the single most promising practice in linking education providers with the sub-baccalaureate labor markets. Because of the needs of employers and educators to cooperate in setting them up, they improve the connection between the two sides. They also resolve a number of barriers to employment in sub-baccalaureate jobs: They provide both job-specific and general forms of education; they provide some job-specific experience without which it is virtually impossible to be employed; they provide employers information about the motivation, persistence, and other personal characteristics that they value so much at the same time that they clarify to students why such characteristics and other "foundation skills" are crucial to long-run success. The contrast between the reactions of employers in Cotooli, who are almost unanimously knowledgeable about and supportive of local educational institutions, and those in other labor markets, who are generally indifferent, was the most striking consequence of co-op programs. The benefits of co-op programs to all parties--to students, education providers, and employers--seem so substantial[112] that expanding them should, in our view, be a priority of educational institutions wanting to improve their performance.

  The Cotooli experience clarifies that co-op programs need to be carefully structured, so that a "high quality" equilibrium of good jobs and able students emerges rather than the low-quality jobs which have sometimes given work experience a bad name.[113] But the developments in Cotooli also indicate that high-quality co-op programs can persist without a complicated institutional structure once employers and providers are educated about the characteristics of good programs. Such programs require substantial participation by employers as well as community colleges and technical institutes and therefore place responsibilities on employers that they may find novel. But if they complain about the quality of potential employees they find in the sub-baccalaureate labor market, the benefits to them should be substantial enough to outweigh any misgivings.
  
  

• The emphasis on enrollment within postsecondary institutions caused in part by funding formulas and in part by tradition partially undermines their commitment to outcomes, including employment consequences. Enrollment-based funding also makes it difficult for them to support high-cost programs even though these may be areas of substantial demand. A greater orientation to outcomes may be imposed on these institutions by the accountability movement; the clearest federal expression of this trend is the requirement of performance measures in the Perkins Act, though a few states (like Florida and Ohio) have formulated their own policies. Any developments that can turn these and other institutions to a greater concern with outcomes will help strengthen connections with employers.[114] In turn, it may be necessary to shift to funding mechanisms which consider variations in program cost, as well as outcomes.

Organizing Local Labor Markets: The Role of Skill Standards

Aside from co-op programs, the other close relations between employers and education providers occur in what we have called organized labor markets like health occupations where licensing provisions spell out the preparation required. These requirements then organize the labor market on both the demand and the supply side--that is, they are binding on both providers of education like community colleges and on employers like hospitals; and they therefore impose a consistency in the skills required and taught. The problems that emerge in other occupational areas--in business occupations, for example, where education programs do not match an identifiable set of jobs, or in machining, where very specific training and considerable experience are usually necessary--do not occur, and individuals who enter health occupation programs are much more likely to move into jobs related to their training and into positions with prospects for advancement. A further benefit is that the process of formulating such requirements forces employers and providers into closer contact with a prescribed task (like the specific task required in establishing co-op programs but unlike the amorphous responsibilities of advisory committees).

Within the sub-baccalaureate labor market, there are not many examples of such organized labor markets except in health occupations. However, the proposals (e.g., Commission on the Skills of the American Workforce, 1990; SCANS, 1991) to establish skill standards for occupational areas are functionally equivalent to the licensing requirements of health occupations. While skill standards have often been proposed as a way of enhancing the capacities of employees, they have just as much value as devices for organizing sub-baccalaureate labor markets. An obvious recommendation, then, is that postsecondary educational institutions and local employers should participate in developing skill standards as a way of coordinating their efforts and increasing their contact, creating some coherence out of the chaos and inconsistency that now reigns in many sub-baccalaureate labor markets.

The Responsibilities of Employers

The conventional analysis of our current economic malaise points to declining productivity, declining real wages, diminished competitiveness with other countries, and other declining measures of economic well-being and goes on to identify weaknesses in the labor force as responsible. The solutions, then, emphasize a series of reforms that need to take place in education institutions. Even those few analyses that blame employers in part for the current economic conditions generally fail to suggest what reforms are necessary in the business community to restore competitiveness. For example, America's Choice: High Skills or Low Wages! (Commission on the Skills of the American Workforce, 1990) clarifies that employers have structured a great deal of employment so that it requires very limited skills, clarifying that any change to increase competencies through educational institutions may have little effect because the jobs which require substantially greater skills do not now exist. But the obvious corollary--that employers must change the nature of employment--receives much less attention than a series of recommendations to reform schools.

However, in examining sub-baccalaureate labor markets, it is clear that employers can easily undermine any changes that schools and colleges make through their employment policies. For example, Frankton providers were frustrated that their efforts to shift to computer-based instruction in drafting and accounting were thwarted by employers who have not yet adopted computer-based methods; the lack of any education- or skill-based pay differentials undermine in practice the rhetorical commitment to more education; and the fact that employment in many middle-skilled occupations is unstable with low wages for entry-level positions undermines the incentives for individuals to get the years of training and experience that employers are calling for. Educational institutions that reform themselves to provide more basic skills or more up-to-date methods and equipment or a broader array of "foundation skills" or co-op programs--but which face employers without jobs to reward students--will quickly be forced to abandon these innovations.

The appropriate question, then, is what are the responsibilities of employers within the sub-baccalaureate labor market to reform their own practices? A number of specific tasks for employers have already emerged from the recommendations, including the following:

• Employers can participate in schools and colleges, helping to clarify to students the requirements of the work world and the consequences of poor education.
  
  
• Employers should participate on advisory committees with fuller and more accurate information and if possible with more accurate and timely forecasts of employment needs than is sometimes the case. In some regions, the information employers provided to us on the changes in production and the deficiencies of employees has not made its way to educational institutions, for example; so postsecondary occupational programs are not up-to-date.
  
  
• Co-op programs can work effectively only if they have the full cooperation of employers, particularly in providing co-op placements of high quality with decent prospects for future employment.
  
  
• The development of skill standards and other mechanisms for organizing sub-baccalaureate labor markets requires the participation of employers. Indeed, if skill standards do not have the backing of employers and are not used in hiring decisions, then they are virtually worthless because they will induce educational institutions to change (and upgrade requirements) without any effects on student success--a process likely to become evident to students and then to reduce enrollments.

  However, there are still other actions that employers take, having nothing to do with cooperation with educational institutions, that have the most profound influences on community colleges and technical institutes through the incentives students face. If firms fail to restructure these incentives, then all the exhortations to improve education and all the cooperation between providers and employers will come to nothing. If employers are to support rather than to undermine the efforts to enhance work-related capacities, the steps they should take include the following:

  • Hiring decisions should be more responsive to educational accomplishments. The current structure of hiring standards within the sub-baccalaureate labor market--in which additional education provides an unclear and uncertain advantage in most occupations, aside from those (like health occupations) which have been organized by skill standards and those (like electronics) where employers have begun to require associate degrees--provides few incentives for individuals to improve their skills. The reliance on experience may be rational from the viewpoint of employers, but it also encourages individuals to forego schooling in order to accumulate experience--generating a cohort of employees who lack the basic academic skills necessary for the current workplace. The only antidote is for employers to restore employment incentives for the relevant general capacities, including school-based credentials, since exhortation to individuals and educational institutions cannot accomplish much in the face of employer indifference.
    
    
  • Wage structures should recognize skill differentials. The current situation--where many employers say they prefer a combination of experience and postsecondary schooling but reward only experience--is again one in which employment practices undermine employer rhetoric.
    
    
  • Employers need to preserve and enhance internal career ladders as mechanisms of inducing individuals to acquire additional skills (including on-the-job training and formal retraining) and as incentives for entering occupations where relatively long training periods are required to develop the requisite capacities. In particular, the practice of relying on temporary workers is destructive in several ways: It shortens career ladders within firms; it reduces the incentives for individuals to enhance their skills since temporary workers cannot be upwardly mobile; it makes it increasingly difficult for individuals to gain entry into sub-baccalaureate labor markets; and it may reduce loyalty to individual firms and thereby make it more difficult for firms to retain the firm-specific human capital they create through on-the-job training. Of course, the expansion of temporary work is harmful to workers in some obvious ways since it undermines their job stability, employment rights, and prospects for advancement. But it is also harmful to the interests of employers over the long run by converting entry-level positions of the sub-baccalaureate labor market into unskilled positions contrary to the call from employers for enhanced capacities.
    
    
  • Employers should reduce cyclical variation in employment as much as possible since frequent layoffs of sub-baccalaureate workers--of which electronics technicians and machinists are good examples--undermine the incentives to accumulate the required education.[115] At the very least, employers must recognize that "shortages" in some occupations are caused not by failures among educational institutions but by their employment policies, including low entry-level wages and unstable employment.

The issues of what employers should do to improve the functioning of the sub-baccalaureate labor market will take some time to work out since the obvious question--what are the responsibilities of employers?--has so rarely been addressed. Furthermore, there are currently few instruments of public policy that can force employers to change their employment practices so as to encourage rather than undermine educational reforms because--unlike our German and Japanese competitors whom we seek to emulate in so many other ways--the traditions of laissez faire and limited regulation of business have always been particularly strong in this country.[116]

Nonetheless, answering the question is inevitable. Markets operate through the interaction of demand and supply, and supply-side policies--in this case, reforms that place the entire burden for change on educational providers--cannot be successful without related changes on the demand side. Improving the operations of the sub-baccalaureate labor markets in the interests of employers and employees alike will therefore require the reform of both educational policies and employment practices.

[111] Of course in truly depressed labor markets, better information will not increase the employment opportunities available. However, as economic conditions improve, good information becomes more important in allocating individuals to occupations of greater demand. More information is always useful to administrators deciding what programs are most needed and to students trying to avoid ineffective programs.

[112] A caveat is necessary: While reports from educators and employers in Cotooli are favorable, we know little about the benefits to students of these programs. In addition, we know nothing about students not in co-op programs who may find themselves completely unable to gain access to certain jobs.

[113] For example, Arnold (1988) shows that limited or repetitive work experience can actually harm a student's later success.

[114] This statement needs to be qualified, since--as the JTPA experience clarifies--some performance measures strengthen inappropriate connections with employers. Within JTPA, the thirty-day placement and the cost-per-placement standards have led some local programs to emphasize on-the-job training of questionable value and short-term placements to the neglect of long-term gains.

[115] For a more extended discussion of employment security, see Osterman and Kochan (1990).

[116] We note, however, that President-elect Bill Clinton has proposed a requirement that large firms spend at least 1.5% of their wage bill on training.