Your Company Doesn’t Have a Skills Gap… It Has a Pathway Gap
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McKinsey Global Institute published an 82-page study this week on what the next decade of American jobs looks like, and the headline number is better than most people expect. Automation could cut demand equal to about 36 million jobs between now and 2035. An aging population, rising incomes, construction, energy, and the tech build-out could create demand for about 41 million. Net that out, and the U.S. economy adds demand worth roughly 5 million jobs over the next decade.
The catch shows up beneath that top-line number. Most of the 36 million jobs affected by automation, about 25 million, stay in the same occupation, just with different day-to-day work. Roughly 11 million workers, about 7% of today’s workforce, may need to move into a different occupation entirely. McKinsey puts a range on that estimate, 6 million to 16 million, depending on how fast AI spreads through the economy.
The pace is what makes this hard, not the total. McKinsey estimates about 770,000 workers a year would need to switch occupational groups, 3.6 times the historical average of 215,000. This morning’s JOLTS report put the quits rate at 1.9%, so workers aren’t even changing employers at a normal pace right now, let alone switching careers at 3.6 times the usual rate.
Only 1 in 7 workers who need to switch, 14%, has what McKinsey calls a direct path: a new occupation with comparable pay and little retraining. 41% face a winding path, and 45% face an unpaved one, meaning no clear route from where they are now to a growing job.
The pressure concentrates in a short list of roles. More than 75% of workers who may need to switch occupations work in office and administrative support, retail and sales, or transportation and logistics. About a third come from just 5 jobs: customer service representatives, retail sales associates, office assistants, cashiers, and warehouse workers. If you manage a contact center or a back office, you already know these people by name.
The gap between the top and bottom of the pay scale is the sharpest split in the whole report. Only 10% of workers paid under $38,000 have a direct path to a growing job, compared to nearly 40% of the top pay group. Lower-wage workers are 7.6 times as likely to need a new occupation altogether.
Credentials are doing more work than they should. 85% of growing jobs require a credential or certification, but only 15% legally require none, meaning 47% attach a credential requirement with no legal basis behind it. Companies wrote those requirements themselves, and companies can rewrite them. Growing occupations also list 68 distinct skills in job postings against 47 for shrinking ones, and 84% require education past high school compared to 45% of jobs in decline.
Demand for specific worker traits has moved fast too. AI fluency now shows up in job postings 11 times more often than it did in 2022. Adaptability is up 5 times, and resilience, curiosity, and a willingness to learn are each up 3 times. Only 3% of workers who switch occupations, about 305,000 people, would need to take a pay cut to do it.
The 47% figure is the one I’d put in front of every hiring manager reading this. Nearly half of all growing jobs list a credential requirement that no law demands, which means the barrier keeping a qualified candidate out of your applicant pool is one your own job posting created. A cashier already brings customer interaction, basic digital skills, and reliability to the table. Whether that counts toward a role you’re trying to fill depends entirely on how you wrote the posting, not on anything the candidate lacks.
The workers with the least bargaining power are absorbing the most change, and the fix on the table here doesn’t require new laws or new training budgets. It requires rewriting your own job descriptions around the skills a role uses, not the credential that’s always been attached to it.
If your hiring process is filtering out people who could do the job because of a requirement nobody can point to a real reason for, talk to us about hiring and we’ll help you find where that’s costing you. And if you’re one of the millions McKinsey says may need a new occupation, see what’s open right now, because the skills you already have may qualify you for more than the job title on your last resume suggests.
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August’s Job Openings Barely Moved, and the Ones That Did Tell the Real Story
The Bureau of Labor Statistics released its August Job Openings and Labor Turnover report this morning, and at the national level, almost nothing changed. Employers had 7.1 million open jobs on the last business day of August, a 4.3% openings rate. Hires held at 5.2 million, a 3.3% rate, and BLS says hires barely moved from July or from a year ago.
Separations told the same steady story. 5.1 million people left their jobs in August, matching July. Of those, 3.1 million quit on their own, a 1.9% quits rate, and 1.6 million were laid off or discharged, a 1.0% rate. Another 363,000 left for other reasons, retirement or a transfer among them.
July’s numbers got revised up across the board: openings up 64,000 to 7.3 million, hires up 92,000 to 5.1 million, quits up 33,000 to 3.1 million, and layoffs up 36,000 to 1.7 million. Year over year, openings rose about 160,000 while hires stayed almost exactly where they were, meaning employers are posting more jobs without hiring any faster than they were a year ago.
The detail tables tell a sharper story than the national number does. Those tables point to openings at the smallest businesses, those with 1 to 9 employees, falling by roughly 335,000 in a single month, more than the entire private sector’s decline, while businesses with 5,000 or more employees kept adding postings. The West region accounted for most of the national drop in openings. Those size-class and regional breakdowns sit deep in BLS’s data tables, and they’re worth watching again once next month’s report confirms whether the pattern holds.
The quits rate is the number I keep coming back to every month, and 1.9% again tells you workers still don’t trust that a better offer is out there. Paired with McKinsey’s finding that switching occupations now needs to happen at 3.6 times the normal pace, the mismatch is stark: the economy needs far more career mobility than it’s currently getting, and the labor market’s most basic confidence signal, the quits rate, hasn’t moved in months.
If you’re hiring, a workforce this reluctant to leave is a workforce you can be deliberate about growing instead of scrambling to replace. If you’re job hunting, plan for a search that takes longer than it used to, and lean on the skills you can prove over the title you used to hold. Our staffing services team works this exact gap every day, matching people whose skills outrun their resume with employers willing to look past the credential and hire the capability.
