For several years running, economic development professionals have cited “finding skilled labor” as their biggest challenge. Consequently, many are getting more actively involved in talent development efforts. But the talent development arena can be very confusing, with seemingly endless ways to get involved. Where should economic development professionals focus their efforts?  

To sort that out, it’s useful to think of talent development as a supply chain, designed to get the right workers with the right skills to the right place at the right time.  In a talent supply chain, “Tier 1” suppliers, those closest to the end customer, are fed by a pipeline of talent at various stages of development, all driven by and aligned with the needs of the end customer. 

Traditionally, talent development efforts have focused on the back end of the supply chain.  During the 1960s and 1970s, they primarily focused on jobseekers facing barriers to employment, which led to the creation of a wide range of second-chance programs.  In the 1980s and 1990s, growing concern about the ability of US workers to compete successfully in global markets shifted the focus to reforming K-12 education. 

Since the Great Recession, there’s been increasing focus on improving the quality of post-secondary education, driven by the need for higher skills to meet global competition in advanced industries, and by the need to replace retiring baby boomers in middle skill jobs. There’s also been a strong push to align post-secondary curricula and programming more closely with employer demand. That’s led to the creation of sector strategies or industry partnerships, which have aggregated demand across a wide range of employers within particular industry sectors to help create pools of career-ready workers.  

However, despite all this progress over the past several decades, there are still weak links in the talent supply chain, particularly those links closest to the end customer.  Very few regions have effective systems in place to meet the immediate skill needs or up-skilling needs of growing businesses, which tend to be small and require outside assistance for training and retraining their workers.  

But providing outside assistance to small growing businesses can be very challenging.  For one thing, they tend to grow in fits and starts, making their demand for skilled workers episodic and often urgent, requiring immediate attention before a window of opportunity closes.  In addition, their demand for new skills often affects only a few employees at a time and requires training that is company specific and often informal.  

The information about skill needs that industry partnerships typically glean from analyzing data sets and gathering information from a sampling of businesses is too generic to be useful for this purpose.  Moreover, industry partnerships have tended to focus on a very narrow range of industries, particularly those that provide large numbers of entry-level jobs for low-skilled workers, or those that are projected to have a large number of vacancies in middle-skill jobs due to the retirement of the baby boom generation.  Meeting the skill needs of growing small businesses, on the other hand, requires going door to door to pinpoint their particular skill needs in real time.  In short, a good ground game.

Similarly, post-secondary education institutions are poorly suited to provide the just-in-time, customized training services that these businesses require once their skill needs have been identified.  What’s emerging in this space looks less like an academic program and more like a boot camp, run by small, highly specialized organizations with deep industry knowledge.  Delivering that kind of customized training is simply too big a stretch for most post-secondary institutions, and a radical departure from their traditional mission, pedagogy, and business model.  

That leaves a big gap at a critical link in the talent supply chain.  Closing that gap is going to require a much stronger ground game on the part of economic development organizations, and radical new approaches to organizing and delivering just-in-time, customized training services to widely dispersed pockets of workers with very different needs.  

So, back to the original question – where should economic development professionals focus their talent development efforts?  There are certainly lots of places all along the talent pipeline where they can, and should, lend their support in addressing barriers, bottlenecks, and breakdowns that can ultimately affect the quality and supply of available talent. But many other organizations are already working on those problems.  

Meanwhile, very little is being done to strengthen the links in the talent supply chain closest to the end customer.  And economic development organizations are uniquely positioned to take that on.  

Moreover, strengthening the links closest to the end customer holds the key to expanding opportunities for individuals further back in the talent pipeline.  The hydraulic effect created by growing and thriving businesses is what draws individuals into and through the pipeline, creating opportunities for advancement that would otherwise not be available, no matter how much education and training they receive along the way.  

But somebody needs to prime the pump.  

Pete Carlson is president of Regional Growth Strategies