Hire power: to close the skills gap, states are teaming up with industries that need, but can't find, qualified workers.

• Author: Queen, Jack
• Position: WORKFORCE DEVELOPMENT - Cover story

The recession officially ended five years ago, but more than 10 million unemployed Americans haven't gotten the memo. Millions more have settled for part-time jobs or have given up the search altogether.

Intuitively, this should mean there aren't enough jobs out there. Yet businesses in sectors such as manufacturing and health care that offer "middle skill" jobs--requiring more than a high school degree but less than a bachelor's--can't find qualified workers.

Even as middle skills jobs sit vacant around the country, their share of the labor market continues to grow. According to the Georgetown Center on Education and the Workforce, they will account for nearly one-third of all jobs by 2020.

Experts call this the skills gap, and it's become a huge missed opportunity for businesses and workers alike.

Recognizing this, many states have turned to industry partnerships as ways to train workers and get economies growing. The strategy: collaborate with businesses to better align workforce skills taught with labor market demands.

Help Wanted

Although some skeptics claim the skills gap doesn't exist--blaming firms for being too lazy or overly scrupulous in their hiring practices--Fred Dedrick of the National Fund for Workforce Solutions disagrees.

"What doubting economists say is, 'If you look at the data, employers could pay more and attract better people.' This is great in economic theory, but it has nothing to do with reality." Although the principle may hold in some cases, Dedrick says, "If you increase wages for jobs like welders, they don't just pop out of the ground." A slew of other factors, socioeconomic to geographic, strongly challenge the notion that the skills gap will fix itself.

The gap also shows up in surveys. Thirty-nine percent of manufacturers reported a severe lack of qualified applicants and 79 percent said they found it difficult to fill skilled positions in a study by Accenture, a management consulting firm. Similarly, the Wall Street Journal found 43 percent of small businesses struggling to expand because of job vacancies.

Dennis Parker has seen the shortage firsthand as an expert on workforce development with Toyota, itself facing a labor shortfall that threatens its ability to expand and even maintain U.S. production. "I travel around the country talking to manufacturers," he says. "From the ground level I have not encountered anyone who's not 'very worried' about their inability to procure skilled technicians."

Toyota has been steadily building plants in the United States since its first one opened 27 years ago. Now, initial cohorts of workers are approaching retirement, and many older plants face a looming mass exodus of workers for whom there are virtually no replacements. Many educational and training institutions simply aren't producing enough workers with the right skills for dynamic, 21st century industries.

"We, by and large, have an education and training system that is not tightly connected to the needs of industry," says Stephen Herzenberg, executive director of the Keystone Research Center. There isn't enough emphasis on multi-skill programs that produce adaptable, problem-solving workers. And many institutions still teach yesterday's skills on obsolete equipment. Some, for instance, teach manufacturing automation without robots or with models so outdated the instruction is useless, he adds.

Passing the Torch

For skilled sectors, this isn't going to cut it. "In today's globally competitive environment, we need multi-skilled, multi-craft workers--not just welders or electricians," says Parker. But this type of worker is a rare commodity: "Even in the worst days of the recession, skilled technicians had their pick of jobs. They'd get snapped up full-time anywhere."

To address the shortage, Toyota reached out to community colleges and developed a training program tailored to modern manufacturing. There are now seven of their...