What's Going on with the Workforce?

Transcript

Jeff Selingo:

Michael, I don't know what it's like where you live in Boston, but wherever I go around DC these days, I see help wanted, we're hiring signs, everywhere. Labor is scarce. But, this just isn't a story about the economy and the pandemic, it has real implications for higher education, doesn't it?

Michael Horn:

That's absolutely right Jeff, because at the root of a lot of these problems is the need for up-skilling and re-skilling adults to meet the demands of a changing economy and workforce, or to help them follow their own passions. To help us understand exactly what's going on right now, we are welcoming Ben Casselman, who writes about economics and other business topics for the New York Times and Rachel Romer Carlson, the CEO and founder of Guild Education, which works with employers to pay of their employees' education.

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Jeff Selingo:

I'm Jeff Selingo.

Michael Horn:

And, I'm Michael Horn.

Michael Horn:

As the economy rebounds from the pandemic, we're seeing a war for talent emerging. Many workers are saying they don't want to go back to the jobs they held pre-pandemic, and at the same time, there has also been an acceleration of employer investments in technology and automation during the pandemic, which is fundamentally changing the nature of work, and has led to a more urgent need for those new skills. That's led to a surplus of job openings, nearly 11 million, with a paucity of employees to fill them, roughly 8.5 million.

Michael Horn:

This has significant implications for higher education, for many reasons. Among them, number one people want to switch jobs and careers, two, the nature of work is changing, and three, as we stare down a shrinking population of high school graduates in many regions of the country starting in 2025, many institutions are looking at likely enrollment declines and the need to better serve working adults. And the answer for all three is more education and novel up-skilling and re-skilling solutions.

Jeff Selingo:

Yes. So, to help explain these issues and just what is going on in the economy today and what it means for higher education, we have Rachel Romer Carlson, a second time guest on Future You and founder and CEO of Guild Education, which operates as a payment platform and helps employers pay for their education, and of course we need to say here Michael, that you serve as a senior strategist to Guild.

Michael Horn:

Yep, Jeff and I'm looking forward to us getting to ask Rachel the questions during this time together as opposed to her asking and grilling me.

Jeff Selingo:

Yes and we also have Ben Casselman from the New York Times, who writes about economics in other business issues, and who is really one of my favorite people to follow on twitter, because of his ability to explain what's happening to people like me who haven't taken an economics course since my freshman year of college. So Michael, lets get started with Ben and Rachel and welcome them to Future You.

Michael Horn:

So Ben, it's been a strange moment for the US economy. The jobs market hasn't come back perhaps as fast as people had expected, there are a lot of job openings for which employers are actively searching and saying they are having trouble filling roles, and you appeared of course in the podcast The Daily about five months ago and basically said, hopefully we'll know more in six months about what's going to explain a bunch of paradoxes like this in the economy. So we're perhaps not yet at that milestone, but set the scene a little bit for us. What do we know and not know so far about what's going on? What are the big, outstanding questions and mysteries with this rebound so far, specifically as it pertains to jobs and working adults?

Ben Casselman:

Can I get another six months? So, look, I think it's interesting that you sort of frame it as the jobs rebound has not been as strong as we might have hoped, because in one sense that's true. If we think back to that moment in the spring when we were starting to see vaccinations and we had this idea that the fall was going to be this sort of miraculous return to normal, and kids were back in schools and we are all back in our offices, it is sort of disappointing relative to that.

Ben Casselman:

In another sense, it's an amazing jobs recovery that we have seen. If you think back to any moment of last year, if I had told you that the unemployment rate would be as low as it is now. We lost 22 million jobs in a two month period in the spring of 2020, we've regained more than three quarters of those to date. So, in one sense, we've actually seen a pretty remarkable jobs rebound. Now, we've seen a slow down recently that I think we can point to Delta pretty clearly as being a part of, so let's set that aside.

Ben Casselman:

There is still this issue that you're referring, to that there are a ton of jobs out there and employers are having trouble filling them, and I think that's a real thing. We've heard these complaints from employers in the past, where I think we've been a little bit dismissive of them. This is a moment where I think genuinely, employers are having a difficult time finding workers. The initial explanation a lot of people pointed to were these unemployment benefits, I think we now, this is where, really I was talking on The Daily a few months ago, were were saying this was going to be the big test. We've kind of run that test, and I think we know pretty conclusively that whatever role the unemployment benefits were playing, it was not a huge one. That was not the dominant force that was keeping people out.

Ben Casselman:

So then what do we have? I think we have, some of this is the still immediate coronavirus related stuff, people who are either reluctant to return to work, maybe they've got kids at home who are unvaccinated, maybe they've got parents, people with conditions where they are particularly vulnerable, maybe they've got childcare issues. I think anybody who's got kids right now knows that childcare has not returned to normal, even if the schools are nominally reopened. So that's part of it.

Ben Casselman:

I do think that there's, and we can get into this more, I do think there has been some sort of reset for a lot of people, where that time away from work or from the day to day office has caused them to rethink their priorities, the way they approach work, and they also have the means, in many cases, not all cases, to hold out a little bit and to say, "I'm not going to go back to exactly that job that I had before." And so, that is one tension that we are seeing, where there's a bit of a standoff between workers and employers, and it's going to take some time to see how that plays itself out.

Jeff Selingo:

So, Rachel, you work with a lot of large employers, Walmart, Target, Chipotle, Disney and others, and particularly with their front line workers. So what are you hearing and learning from your employers? Is it matching some of what Ben is saying?

Rachel Romer:

It aligns really closely. I share a similar view to Ben's on this, which is, I think it's pretty remarkable how quickly things have come back. But what I'm hearing and seeing on the front line is that mix of still COVID related impacts, particularly for women who aren't coming back because of childcare crises, or just because at any given moment, your kid's school could shut down, and then you have to be back at home. And for most of the economy, work from home is not a reality, they work on the job.

Rachel Romer:

Boomers, think we still see a massive population of Boomers who haven't come back into the workforce, and it's unclear if that's COVID related or related to a re-shifting in their expectations of how they want to live their life, or just a skill shift of now they're not totally sure what the job is they want to go back to, but they are not sure they have the skills for another role. But, I think it's been pretty remarkable broadly.

Rachel Romer:

I think what we're seeing in terms of the frontline specifically, is the focus on, I call it the three Ps. What is their package? What is the purpose of the work? And what are the pathways? I think package has changed, in that a $15 an hour wage has basically become a commodity, the same that healthcare benefits had slowly become a commodity over the first 15 years of the 21st century. I think that's awesome for workers, and I think that means companies now have to figure out, "Okay, what's our differentiator?" That's where purpose comes in, we know that Gen Z and Millennials are thinking very differently about the purpose of the workforce and their work on a day to day basis. And then lastly, pathways. We know that Millennial and Gen Z want faster pathways than their parents did, in terms of their career and they want to know that they're constantly learning and constantly growing. And in my work, I have a front row seat to see how much of a differentiator that's become for companies who are willing to offer pathways for their employees.

Jeff Selingo:

So, Ben I want to lean into that a little bit, because you had mentioned this idea of this passion as well about what people really want to do. We've seen a lot of stories about how people just don't want a job that pays above minimum wage, they really want to do something about what they're passionate about. If they're going to work, or something that allows them to grow, through some sort of clear career pathway. So, what have you seen in the data, Ben, that suggests that maybe this is a broader phenomenon, more than something that's just anecdotal?

Ben Casselman:

I confess, I sort of approach this with a little bit of skepticism, in that I think workers have always wanted a lot of these things, they haven't always had the leverage to get them, and I'll talk about that in a second. I also think, look, younger workers have almost always wanted pathways, they want meaning in their work. If you go back and read stories from the era when the Baby Boomers were entering the labor force, there are all of these stories from then that are about how the Baby Boomers, now that they're entering the workforce, they just want everything now, now, now, and you could almost find, replace Baby Boomer, replace with Gen Z. So I have some caution about this.

Ben Casselman:

I do think that, for a variety of reasons, the experience of the pandemic has given a lot of people a moment to re-evaluate. So we're seeing that white collar workers who are saying, "I don't want to go back to sitting in traffic or crowding onto a crowded subway car every day, to go and sit at a desk and do work that actually, I could be doing at my kitchen table." We're seeing that, in a lot of frontline workers who are saying, "I'm not going back to a job where I'm getting called an hour before my shift to say, show up or I'm getting sent home after two hours when it's slow. And all of a sudden I'm not getting the paycheck I was expecting." We're definitely seeing that stuff, and I think we are seeing that a lot of people actually were able to build up a little bit of savings during the pandemic. This is certainly not universally true, but a combination of reduced spending during the pandemic, government benefits in some cases, people who are lucky enough to own homes or have stock portfolios, have seen those go up. And that just given people a little bit of flexibility to say, "I'm not going to take the first job that comes along. I'm not going to agree to a job that I don't want to do."

Ben Casselman:

And whether they're demanding meaning or they're demanding pathways or they're just demanding better benefits or better flexibility or better pay, the key thing is, is that workers have some leverage right now, in a way that they frankly haven't in a long time. And companies, because they're having a difficult time hiring, are being forced to adapt to that in one way or another. Whether that lasts, whether that moment of leverage sticks around, I think is really an open question, but it's here right now and workers sense it.

Jeff Selingo:

So I want to dig a little deeper on that choice, Rachel, because employers have choice too. To attract potential employees, they can offer perks and benefits, such as paying for their employees' educations, or they could use those dollars and perhaps offer higher salaries. So one argument might be that you could take those dollars and pay everyone higher salaries, and they could choose most efficiently where to spend them, whether that's on more education, childcare, food or whatnot, and everyone would benefit as opposed to those who just choose to sign up, for example, for the education benefit and take advantage of that benefit, specifically. So, let's focus specifically on education. Why do the employers you work with choose to offer the dollars earmarked for education in essence, and have their employees choose from your learning market place of academic providers?

Rachel Romer:

At the macro level, I think we have to be careful not to let employers off the hook on a zero sum argument. Fortune America is doing better than it's ever been doing, and their budgets are pretty frothy and I think there's room for increased wages and differentiated benefits. So, increased wages lift the floor, we all know that, I believe in them, I imagine most of us on this call do. And we're seeing that. What differentiated investments in your employees do is lift the ceiling for workers.

Rachel Romer:

And so for example, in the case of targeted learning and development programs or specific education programs, I'm a believer that the four and 40 is dead, where we go to school for four years and then we work for 40, and I think our labor data tells us we're now in an every four, where the average frontline worker is going to have to be learning new technical skills in some of form or fashion every four to five years. Well, that means that at most, you maybe at 25% of your population intensely re-skilling or up-skilling every year. So, that's a very differentiated, specific benefit, applied to people at a point in time. And benefits almost, I hate the word perk, because we don't call healthcare a perk and healthcare was designed to invest in your body, when your body was the unit of production. L&D on the job is investing in your mind, in a knowledge economy where your mind is the unit of production. So, I think we got to move out of that.

Rachel Romer:

Yes, ping pong tables and kombucha are perks, and I can shame my friends in tech for creating that nonsense. But for employees in the front line, these have to be core investments in the total rewards package, but they also need to be part of the pathway of saying, this isn't just a dead end $15 an hour job. And I think that's the part of the conversation that's missing, is we need to be talking about the second wage and how do you get to the second wage. And the way you get to the second wage is by lifting the ceiling, not just lifting the floor.

Jeff Selingo:

So, Ben I want to tee off what Rachel just said, and I'm curious your take on it. Because part of the implication of that every four years rhythm, is that the nature of work is dramatically changing. We're seeing investments in technology and automation in the workforce, and that's changing the nature of jobs themselves. And I'm curious what you're seeing in data, in terms of how that's impacted across different industries, the impact on individuals' needed skillsets to do these jobs, and is that causing employers to think more serious and strategically about education and up-skilling as that needed investment.

Ben Casselman:

Yeah, so I think it's really interesting, I think the pandemic has accelerated a lot of trends that were already in place, and then it's also potentially created some new trends. So, we know for example, that on the consumer demand side there's been a huge shift towards shopping online. That was something that was already taking place, that's going to shift what we need in terms of work, in terms of how many employees we needed in malls versus in warehouses. That was already taking place, it's just happening faster. The shift towards working from home has created a need for all sorts of technologies that come along with that, and that's going to change the demand for skills. But again, pushing along something that was already happening.

Ben Casselman:

We've also seen a couple of other things. We've seen companies that made adjustments directly in response to the pandemic, that they probably would not have made otherwise, but may now keep around. We saw hotels eliminate daily maid services and a lot of them are saying, "We may not go back to that." We've seen, you go to a restaurant now and you scan your phone for a QR code and you look at menu that way, and maybe even order that way. Some of that may edge back as we get back to normal life, but some of that is probably going to stick around.

Ben Casselman:

We also know that historically, companies have used recessions as an opportunity to automate. It's awkward to fire a bunch of your workers and replace them with robots, but if you're firing a bunch of workers because it's a recession, then when you bring things back, you bring back more robots, more automation. It's also difficult to shut down your production lines in the middle of a busy season, but if you're going to be idle for a while anyway, it's an opportunity to bring in new technologies. So, I think we're seeing all of those things, and in many cases exacerbated by the labor challenges that they're facing.

Ben Casselman:

What we'd like to say is, "Okay, what that's going to result in is companies going and really investing heavily investing in their workforces, investing in training, investing in education." We're obviously seeing some anecdotal stories of that, Amazon was doing a lot in this, even before the pandemic and they've announced even more during it. Walmart and Target, we're seeing some announcements. I don't know that we're seeing yet, a lot of wide spread evidence that companies are really investing heavily in serious training, credentialing. Over a long period of time, we've seen a decline in spending at the corporate level on training and up-skilling, and I don't think we've a seen a lot of evidence yet that that's reversing in any kind of whole scale way. Maybe it will.

Jeff Selingo:

So, Rachel, I want to bring this back to higher education a bit, because almost every day, I'm speaking to a college president or I'm speaking to people who sit on college boards. And I will tell you, they seem really confused right now about what's going on with the employer market and where they fit in, where higher education fits in. Because historically, as we know, employers had these benefits programs that were pretty unstructured, from which employees could choose where to spend their dollars wherever they found useful. This is how I got my graduate degree, they basically gave me a blank check every year and I went and shopped around and found a college willing to take it, and that's how I got my degree. So, they would just advertise their continuing education programs and whatnot, directly to working adults. We see this in airports, we see this on the subways in different cities.

Jeff Selingo:

So, when I talk to them and I mention things like Guild, they're not quite sure what Guild and it's ilk represent, and how as institutions, they should engage. So, what's different about employers that work with a Guild type entity and what happens to the academic programs in institutions, for example, that don't have a partnership with someone like Guild?

Rachel Romer:

I think what has changed most since Guild and the other organizations that do similar work to us came onto the scene, is that we have helped both the student have a more structured decision making process about where and how they go to school, that isn't primarily dictated by the Google and Facebook ad, because we know that's the number one driver of the decision. If you're going to a top 100 school, what drives your decision is the US News and World Reports, and if you're not what dictates your decision is either the community brand you're most aware of, and that's more common for the first two years of college, and beyond that, whoever serves you the best Google and Facebook ad. And to be clear, that means whoever paid the most.

Rachel Romer:

So that's how we've handled the distribution of education to working adults, up until this point in America, and our view is that we can empower students with a structured decision making process that starts with, "What skills do you have today? Where do you want to take your career? What skills do you need to get to that point in your career?" And then back into the education. So it's what we call career first conversation, rather than a program first conversation, where people say, "I think I should get an MBA," or, "I think I should get a Masters in Comms." That then matches to what employers want, because employers think much more about skills and competencies today, and they think about what do we need our workforce either to gain for themselves, and that's the re-skilling value proposition that we offer employers, is they're using us as their re-skilling partner.

Rachel Romer:

The other is they're using us as a talent partner, where they're saying, "Hey, we actually don't care what our employees are learning, we care that they're learning so that they stay with us for three, four, five years and pursuing their goals." And a great example of that, I actually really like this, Taco Bell's talent philosophy, this is their talent philosophy is, "Start with us or stay with us." And their point is, if we're your first job when you're 16, and we can help you then pay for your first couple of years of college, and then you become a nurse, awesome. Or if you want to become a manager of a Taco Bell or a Chipotle for example, believe it or not, they are so many $100,000 jobs running restaurants around the country people, just don't know that. And if that's the career path you want, you want to be a manager of a restaurant and lead a $2 million [inaudible 00:20:52], we've got a pathway for you on that too.

Rachel Romer:

That's the conversation that's happening, and what higher wd has to decide is how they want to plug into that workforce skills and competency conversation. But I think this game of selling really expensive masters degrees, based on the name of the degree and the brand of the school, I think that's reaching the end of its era.

Jeff Selingo:

Well, we've seen a lot of stories about student debt in terms of that too, so it's an issue that we've talked a lot about on Future You as well. So, Ben we've been obviously talking a lot about employers and traditional employers here, but you've also written about how US entrepreneurship during the pandemic has seen somewhat of a resurgence. And I'm just wondering what is happening and who is driving that? I'm curious about this because we have seen colleges and universities offer many more undergraduate courses, programs, extra curricular activities, that all promise to cultivate that entrepreneurial mindset and develop skills needed in this start up world. But the problem, as I talk with college leaders about this, is that it's usually the engineering and business students who are interested, because they think of the Silicon Valley garage, and not the dozens and dozens of other majors on campuses. So, I think they're really interested, again from our listeners who are lead colleges ans universities, about what's happening right now with US entrepreneurship and who is driving it?

Ben Casselman:

Yeah, I mean, so I think it's worth going back a little bit before the pandemic here, which is that before the pandemic, we were in the US, in a decades long startup slump. The rate of entrepreneurship in this country had been declining since certainly around 2000, potentially back to the 80s, depending on how you measure it. That's very surprising to a lot of people, we think about this as this era of startups, we hear about the Facebooks and the Googles and think that this is a time when everybody's starting a company, but it's very much the opposite.

Ben Casselman:

And there are real risks to the economy that come from that. There are a lot of economists who have been looking at this and saying this is part of a general sclerosis in the economy, people actually changing jobs less often, moving less often, a less flexible economy. And so, in that context, seeing a lot of these programs at colleges and universities to encourage entrepreneurship, encourage that entrepreneurial mindset, I think are really interesting.

Ben Casselman:

What I haven't seen is a lot of evidence that they're particularly successful. And we don't have a great understanding of why it is that entrepreneurship had been declining for so long in this country, but most of the evidence is that it was not that there weren't people who were interested in starting companies. It was a risky endeavor. We've seen health insurance being tied to your employer makes it difficult to go and leave a job, two income households make it difficult to pick up and move across the country.

Jeff Selingo:

Student debt, I would imagine, right?

Ben Casselman:

Student debt is clearly a factor, in the wake of the last recession, of course, debt levels and declining housing values made it difficult to borrow money in order to start companies. There are lots different factors here, demographic change. None of those are things that are going to be changed by an undergraduate program, an entrepreneurship or in a startup club at your school. That doesn't mean that those programs have no value to them, but it's now clear that that is what is going to drive that larger change.

Ben Casselman:

Now, we have seen in the pandemic, a real surge in startup activity. Some of that may be just very short term stuff, you lose your job or you're at home, it's a lot easier to Google how to start a company when you're at home, without your boss looking over your shoulder. So, definitely, if not, my boss is listening, I'm not doing that as we speak.

Jeff Selingo:

You're going to start one of those newsletters, right? Like everyone is.

Ben Casselman:

That's right, in a leaf of sub stack. If you look through the list of the most common names in startups in the past year, there are lots of things around sanitization and face masks and things like that. But there's also evidence that actually, when people were given some financial resources and they were given some time, that they did actually take the opportunity to start businesses, some of those directly related to the pandemic, but a lot of them not. And so, that is a suggestion, if we can do some of those things, if we could make sure that people had the resources that they needed, the flexibility that they needed, de-stigmatizing in a way, that that would actually encourage this much more, than I think at an undergraduate level program or club would.

Jeff Selingo:

Yeah. And, I think a lot of that is marketing around, to try to attract students, especially students whose parents think they need some sort job coming out of college, and being an entrepreneur is not a bad one. Go ahead, Michael.

Michael Horn:

Well, I was going to say, maybe a good way to switch is we wrap up here, which, Rachel, so if that's what higher ed maybe can't impact, what can they do better to better serve working adults from what you're learning out there in the data, and all those students that you're seeing be served by the partners that you work with? Whether it's from student support's perspective, or perhaps offering more certificates for learning or prior work that recognize skills, but can also stack into a degree in the long run. What are you learning from the menu of things that they ought to be doing, that would make the most impact for working adult learners?

Rachel Romer:

Yeah, so one ties back to that skills and competencies conversation. I feel like, 10 years ago when I was in graduate school at Stanford School of Ed, they were talking more about skills and competencies than the business school where I was doing my joint degree. Today, I hear more employers talk about skills and competencies than I do the average. The bar has lifted. So we need to keep lifting the bar in higher ed, where all of higher ed is adopting skills and competency frameworks for how we measure outcomes.

Rachel Romer:

That also means we need to have nuanced, uncomfortable conversations. I'll give an interesting one. At one of employer partners, the most common reason why students take a break between one semester and don't enroll the next, which we might historically call a dropout, is because they get a promotion. Is that a bad thing? If somebody two and half years into college is getting a promotion into a salaried role, over $60K on average. Well, when we report that data to higher ed, or when the higher ed media wants to cover that, they call it a dropout. I don't know what I should call that. I think I should call it a success story that hasn't finished yet. The student's gotten the economic outcome they want, but they probably want to come back to that university, but they don't really want that university to slam them with dropout emails for the next year, they want to have a lifelong learning partner.

Rachel Romer:

So, we've got to re-write this paradigm. I get it that the economic model for non profit and public higher ed works really nicely when it's a four year degree and you only acquire the student once. I don't know if that's going to work for today;s learner wants, and that means we need to change the conversation in Washington, and we need to change the conversation of elite higher ed, and those of us went to elite higher ed probably need to check ourselves.

Michael Horn:

It's a good set of thoughts as we wrap us here. And just Ben, Rachel, thank you much for joining us, and we'll be right back on Future You.

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Jeff Selingo:

Welcome back to Future You, after a revealing conversation with Rachel Carlson of Guild and Ben Casselman of the New York Times. Michael, Rachel concluded that segment there with a nice shot at those who went to elite higher Eed needing to check themselves. What's your take as a graduate of one of those elite institutions?

Michael Horn:

Oh, come on Jeff, can't we call it a selective institution or something? But ...

Jeff Selingo:

Oh a highly rejective institution, as some people call it.

Michael Horn:

Yeah, exactly. Exactly, exactly, so. But look, probably no secret that I don't disagree with Rachel there. I do think her point is an important one given, as you know Jeff, a lot of the policy makers who think about higher education aren't really familiar with the institutions where most students enroll, community colleges or regional comprehensive universities. And it's one of the reasons I think, that the First Lady, Dr. Jill Biden, gets such attention because of her understanding of those systems. But on the flip side, I think it is something that more and more people are certainly aware of, and increasingly so.

Michael Horn:

So, the central question I think, Jeff, that she's asking, is how do we measure outcomes? And I personally think it's really tricky, because, and it touches on something I've been speaking about and I'm actually working on a piece about right now. The metrics that institutions are accountable for, are really what I would call supply side metrics, there are things that are relatively easy to count, given how institutions are set up. And so, these are things like graduation rates and term to term retention for full time students, because it's a lot harder for part time students' inputs, your faculty credentials and things of those nature.

Michael Horn:

But it's a lot trickier to measure things from the demand side, meaning based on any individual learner that comes to you, what does progress and success look like for them, given their goals and circumstances and how do we measure that? And the example Rachel cited that someone pausing their enrollment because they got a promotion, we've talked about that one before. And when I set up the Educational Quality Outcomes Standards Board, for example, we created a way for institutions like community colleges to measure other things like promotions or placements or salary increases, because a lot of community college presidents for years, have railed against these traditional metrics because they say that they are seeing exactly what Rachel described. Now, I think the trick here is that we have to be careful about letting institutions and organizations off the hook too easily, that if someone drops out but doesn't get the underlying economic outcome that they were looking for and then what do we say around that.

Michael Horn:

Now look, Guild is in a unique vantage point, because they can see what happens on both sides of the marketplace, the institutional and the employer side. But all too often I think in higher ed, those workforce outcomes are kept separate from the educational output, and so I think it's something that we've got to fix and really understand, what's the job to be done of the learner, why are they coming to school, and what's the appropriate measurement to see if they have achieved that desired progress. And I don't personally know anyone who has figured out how to measure it from the demand side, but I think it's something work wrestling with, because institutions naturally align themselves to their incentives around measurement. So, Rachel obviously talked about that from us switching the program first conversation to a career first conversation, and then picking the program, but I actually think it's even more fundamental than that. Let's understand the progress that an individual is seeking and then figure out, is it even a learning outcome or a learning program that we want, or it is something entirely different.

Michael Horn:

But that focus on data is tough, and maybe here's a good place to turn to you because Jeff, Rachel talked about the four and 40 turning to the every four, but Ben simultaneously talked about the data showing that we've been in a period where people are actually moving between jobs less often, and they're actually more likely to stay close to home and so forth. And so I'm just curious how you square these, at least at a high level, trends that are seemingly different, and how do you think about the implications for institutions. Because I know Ben's point about how companies have cut back on training over the last several years, you could say, "Well yeah, sure but the data is by definition, it's a lagging indicator and the really smart strategic companies like Amazon and Walmart, they're the ones making the changes for their strategic advantage, so you don't see it in the data at large, but that doesn't mean its not important."

Michael Horn:

I guess the fact that folks are moving less often between employers, and you square that with the gig economy that we're both in and the need to constantly up-skill and re-skill, it has me tied up in knots. I'm a little confused. What's your take?

Jeff Selingo:

Well first, Michael, I have to say that my crystal ball is sometimes cloudy about the future of higher education, but it's mostly cloudy on this one. I expected, with schools openings, expiring unemployment benefits and the Delta variant declining, that all those things will help boost labor force participation this fall, but evidence seems to suggest labor shortages might be deepening. Again, I haven't taken an economics course since college, but the Wall Street Journal recently surveyed 52 economists and nearly half of them predicted that participation in the labor force would never return to it's pre-pandemic level. In other words, this change is permanent.

Jeff Selingo:

So to begin to untie your knot, I'd say that the data are a lagging indicator, and that's never good for higher education, when the data are really lagging behind. And here's why, because historically, it has taken higher education institutions way too long in my opinion, to design new academic programs to address the changing labor force. Let's take data analytics for instance, which is a really hot field, and in many ways every job now is a data job. But job postings looking for skills analyzing data for example, grew almost 50% between 2017 and 2019, but the growth in new certificates and new academic programs in that area is really lagging, especially for those people who don't want to major in it, but just want to get skill sets in data analytics. And I think it's because higher ed is trying to address this market through it's legacy means. And what I do I mean by that? Things like entire academic programs, degrees and things like that, which just take forever to get going. So if the labor market is shifting permanently, as we seem to think it is during COVID, so too, will how higher education has to address it.

Jeff Selingo:

Now, I know there's going to be some listeners out there who are going to write in and saying that higher ed's job is not to follow the whims of the workforce, and I'm not suggesting here that colleges and universities change wholesale and get rid of the core programs, because, "They're no longer needed." We know from countless surveys out there that soft skills are in high demand, which are often provided by the core disciplines at any college or university, so we definitely do not want to get rid of those.

Jeff Selingo:

But what I'm suggesting here is really something different, that institutions keep up in other ways that are different than how they might have addressed this in the past, and I want to out throw two ideas here. One is an example from Dominican University in California and Make School, which formed a partnership a few years ago around computer science, where Make School's students went to Dominican to get the liberal arts background that they needed, and then Dominican student went to Make School to get computer science background that they needed. Mary Marcy, the former president of Dominican was on the podcast a couple of years ago, and she told us it would have taken years and more than a million dollars to start a computer science program.

Jeff Selingo:

So, here's a way where a partnership really helps. So, number one, let's stop thinking we have to solve these problems in higher Eed on our own. Partnerships, I think are key to keeping up with Rachel's prediction that this labor force is much more dynamic than the numbers have suggested until now. Colleges just can't do this by themselves. Second, we really need to stop thinking in legacy terms, especially around legacy degrees. We've heard so often on this podcast that skills are the coin of the realm in the future job market. So who provides those skills? How do we measure those skills? And most important, how do we track them?

Jeff Selingo:

I wrote recently in my newsletter about Pocket at ASU, which is a new app that they're launching, this spring that they're launching, in the spring of '22, which allows learners to track their learning in their pocket. It's a digital wallet and portfolio for the lifelong learner. I think the problem with this new way of thinking, especially around skills, is that the infrastructure still needs to be built there. And I think that the institutions that build that infrastructure are really going to win this decade, if they think in terms of skills, new credentials and tracking that learning going forward.

Michael Horn:

Yeah, it's a bold statement Jeff, and I think directionally, it's really the thing that higher ed is wrestling right now, as it comes out its legacy past and what the organization would have it do. But, last question from me on this which is, Rachel talked about the how, for the 18 year old, US news or that proxy, is how they rank their colleges, and for working adult it's all about the Google ads, she said. So you've thought a lot about this dynamic of recruiting students and the notion that there are buyers and sellers in higher ed, for example, and I wonder if you might illuminate the point a bit more and let us know whether you agree with Rachel or how you might describe the current dynamic.

Jeff Selingo:

Yeah. So, Michael, I'm going to push back here, because I don't think it's the higher ed brands that spend the most on Google and Facebook that are winning the day. So for one, whenever we get a peek at the OPM business models, and we're talking about this with Phil Hill on an episode this fall, online programs spend a ton on marketing. Indeed, it's why colleges and universities often partner with OPMs, because they know how to market higher ed programs. But yet, even as they achieve scale at an institution, you'd think their marketing costs might go down per student and they don't, they just keep rising. So if they were winning on Google or Facebook or LinkedIn, where there's also a lot of higher ed advertising, you would assume, I think, that their costs would be going down as they grow and get known, and that does bot seem to be really happening, at least in that market. And I understand that's just a piece of the market, but I think it's an example of what's happening out there.

Jeff Selingo:

Second, I think increasingly, learners are choosing based on cost and not just brand or what they see advertised on Google and Facebook. I was at a dinner with some presidents in Pennsylvania a couple of weeks ago, and one of them mentioned that they had a very successful degree completion program until an out of state player came in and undercut them on cost per credit. Now, this local institution had the brand, they were known in this marketplace, but this outside player had the price advantage and almost overnight, the advantage of this local institution disappeared, because they couldn't compete on price.

Jeff Selingo:

Rachel also talked about that more structured model for the distribution of education. And while I love her model, this idea of a career first conversation, where you back into education after knowing what skills and jobs you want, I'm really skeptical that the education industry can ever be that efficient, to be honest with you. I'm thinking of this right now, on the undergraduate level, because I'm writing a piece about all the friction in applying to college as a high school student. There were more than 11 million applications filed to colleges last year by high school students, even though there were only a couple of million high school graduates. They are filing so many more applications than they ever did before, and you would think, if we're moving toward a more efficient system, they could actually file fewer of them. There's so much friction in the undergraduate market, and I'm writing about a pilot the Common App did on direct admissions to reduce that friction.

Jeff Selingo:

But it reminds me of conversations we've had about other [inaudible 00:40:15] issues, whether it's improving access to health care or getting people to save for retirement. We thought putting technology in the hands of people to make healthcare decisions or auto enrolling them in 401K plans would work, but it's not that simple. The rules are complicated because there are so many stakeholders who benefit from the way the rules are set today, and that's definitely true at all levels of higher education. We know better ways to run undergraduate admissions, for example. We know better ways to pay for college or give adults up-skilling and re-skilling, but these are just huge ships to turn around and I don't think it's going to happen as easily as we want, when there are so many players with so much at stake in the current system.

Jeff Selingo:

So with that, we're coming to the end of another episode of Future You, and we are asking for audience questions, and we've gotten some great ones. And remember, if you send us your audience question through social media or other means, we will send you this great Tervis tumbler that we have with the Future You logo. And this week's question comes from Kim Bock at the University of Northern Iowa, Michael. And her question is that there are many views on the important of choosing a major when applying to college, versus applying to college as undeclared or exploratory. Students are given different information by parents, high school counselors and college, and similarly there's disagreement about this topic within institutions of higher education, are student more at risk, for example, if they enter college as undecided. So what are your thoughts and experiences about this, about whether to apply to college picking a major or applying as exploratory?

Michael Horn:

Yeah, Jeff, when I see such violent disagreements on both sides of an issue, I tend to think that we have the categories wrong, so that there's truth on both sides, but we need to divide the world a little bit differently. And the way I'd say it is, from the jobs to be done, choosing college angle, there are certain students who went enter with a very clear understanding of what they want out of college experience, and the specific skills and credentials, they're ready for that career first conversation that Rachel talked about, in other words. And for them, coming in with a major and an institution that knows how to serve them well by starting them in that clear major or that guided pathway, absolutely they're right, and you want to match that supply and demand.

Michael Horn:

But for certain students, they're genuinely unsure. I had no idea what I wanted when I went into college, from a major and course to study perspective. And there, you want a very different program design, where you put exploration not in a willy nilly 1000 flower bloom kind of way, but an intentional set of explorations that frankly might not look like courses. They might be more experiential in nature I think, to get people [inaudible 00:43:03] and a sense of, what do you actually like? Where's your strengths? Where's your passions? And then you can declare and go deep. But fundamentally, that's a very different program design and maybe a different type of institution that should be set up for that. And so sorting that and better matching the demand and the supply would be my advice, rather than saying to all learners, "Oh, you have to declare a major," or, "You all shouldn't," or to all institutions, "You have to go all guided pathways," or, "You should go all choice, choice, choice." What are your takes?

Jeff Selingo:

Yeah. I have a lot of thoughts on this, and I think there's two external factors playing a big role these days in this. One is parents who are really concerned about the cost and value and the ROI of college. And I see so much in the conversations I've been having since the book came out, with parents and counselors and students, a real push by parents to have that ROI in degree, and it's why we're seeing so many parents say, "We're not going to pay for college unless you pick a major, and by the way we really want you to pick a major that's going to have a great career outcome." So, I think there's a lot of pressure on students because of the cost of college.

Jeff Selingo:

The second one, though, is also strategic, and I saw this again while reporting the book, is that there is that belief that you have to have a major chosen in order to have a shot to get in some of these colleges. So for example, especially at capacity controlled institutions, where you want to major in computer science or engineering, the only shot you have of getting into that program is applying as a freshman, especially at big, public universities. Or there's sometimes a strategy on the other side, where you say, "Well, I am going to only get into this selective college by saying I'm going to major in the humanities, and then I'm going to have a shot to transfer later on, into the program that I really want." So I think that there's a lot of strategic thinking around this, and I wish that institutions would be more transparent about how they do admissions in these programs, because I think that's one reason that students feel forced to pick a major on the way in the door, is because of the way they think admissions might be run at that institution.

Michael Horn:

Jeff, that's a great place to leave it, because I think transparency or the lack thereof, undergirds a lot of these issues right now. And what my answer neglected is the parent's job to be done in all of this, and I think it's an important consideration, but the lack of transparency, I think in many cases, breeds that lack of trust. And then a lot of different narratives result from there, that can sometimes cause good behavior and sometimes cause aberrant behavior, if you will. And that's not just with Kim's question, but it cuts through all of the conversations we've had today on Future You, around the changing nature of the job market and how higher ed should and shouldn't respond to that. So, I think it's a great way for us to cap off this episode and this revealing conversation with Ben Casselman and Rachel Carlson of Guild. So huge thanks to them, thanks to Kim and thanks to all of you, our listeners. We'll see you next time.