College Costs Are Still Rising: What’s That Mean for Businesses?

My nephew is in the final throes of deciding where he will matriculate. I remember, vaguely, being 17 and deciding on colleges, and it was a much different process back then. I loosely decided where I wanted to go geographically. I had a very vague idea of what I might want to pursue. Now, over 20 years from my graduation, I can see the spark of my current career, but I wasn’t blessed with knowing what I wanted from the start. Admittedly, I don’t know many in the compensation profession who knew as young kids that they intended a career in comp.

At a recent work event, speaker Kirsi Hall talked about the impact of the rising cost of college on American businesses. Her point, as college becomes priced increasingly out of range for working families, is that in the not-too-distant future, students may begin to enter the workforce prior to attending college. The idea is that while working, they’d identify their future interests and only go to college once they became more certain.

PayScale’s College ROI Report puts an exclamation point on the discussion. Six of the schools that made it to the top 10 were engineering schools, places where students are fairly decided on a career trajectory before signing on. The study also found that those who come from lower-income households never quite catch up with those who start in higher-income brackets; they are both less likely to become top earners and less likely to become executives in organizations, facts which may be related. As money continues to polarize the U.S., it seems likely to expect to see more workers seeking to join the workforce before earning a four-year college degree.

Impact of Rising Education Costs on Employers

The question becomes, can we expect employees to learn critical business skills prior to coming to our organizations, or are we now on the hook for training them ourselves? What are other organizations doing to prepare?

  • Conduct an audit of critical skills. Identify the skills you have in abundance and those that may be lacking. In a recent skills report, PayScale found that the skills employees are most likely to be lacking aren’t what you would expect. Figure out what skills you can train within your organization and which may need external training. Identify potential talent to train with the missing skills.
  • Develop relationships with local colleges. Some companies are partnering with local colleges to make sure the necessary skills are being taught, trained, or introduced. This can work especially well in more rural areas where students may be more likely to stay local when they enter the workforce. Some organizations are even creating a more formal relationship by creating joint training programs.
  • Consider targeting people automated or obsoleted out. With improvements to machine learning and other automation technologies, parts of the workforce are finding themselves in jobs that have become automated. Others are finding themselves in jobs that have become obsolete, such as coal-mining where the costs of other energy sources have all but halted demand for coal. Both groups are great targets for training programs to provide the workforce with newer, more relevant skills.

Your organization may need to become its own expert in learning and development. Do you have the right people in your learning, training, and development functions to help your organization meet the demands of tomorrow’s workplace?

Tell Us What You Think

Are you prepared to train workers who lack critical business skills? We want to hear from you. Tell us your story in the comments.