By David Smith
Graziadio School of Business and Management
Labor economists use the word “churn” to describe the process by which jobs are reallocated in light of a changing economic environment. Today, we live in an era of unprecedented labor-market churn, highlighted by the fact that about one-half of jobs held by Americans did not exist 25 years ago. This trend is likely to accelerate, as some projections suggest that more than 75 percent of jobs that today’s students will fill do not currently exist.
The greatest hockey player of our generation, Wayne Gretzky, said the following: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” If Mr. Gretzky would allow me the privilege of applying this piece of wisdom to higher education, I would offer, “A good university prepares students for the current job market. A great university prepares students for the jobs of the future.” At Pepperdine, we aim to be a great university, nothing less. In this context, part of our aim is to prepare students to be mobile in their career paths.
I grew up in the state of Michigan, and when I graduated high school in the 1980s, the pathway to a secure future was clear: get a high school diploma, find a job with one of the “Big Three” automakers, and retire with benefits 30 years later. Not too long after I graduated, this pathway was washed out by a global economic environment, which brought heightened competition to American automakers.
The growth of technology and innovation has raised our productivity, increased overall wages, and improved our standard of living over the past several decades. But it has also created a labor market where individuals need more advanced skills. Manufacturing has gone through the transformation that agriculture experienced 100 years ago: tremendous productivity gains, but at the expense of jobs. In the decade of 2000-2010 alone, approximately one-third of all manufacturing jobs in America disappeared.
The current generation of millennials not only faces a job market in a state of flux, but a labor market that still bears scars from the Great Recession of 2008. There are some silver linings as the slow economic recovery continues. In Pepperdine’s locale, Los Angeles County is projected this year to (finally) achieve employment levels past its pre-recession levels. More broadly, the U.S. Department of Labor projects that U.S. employment is expected to increase about 11 percent, or add nearly 16 million jobs, between now and 2022.
This is encouraging, but a grey cloud lingers. According to the U.S. Bureau of Labor Statistics, for those aged 25-34, the length in which they stay on the job is nearly 20 percent higher in 2012 than in 2008— rising from 2.7 to 3.2 years—the largest spread among age groups by far. In addition, a recent report from Towers Watson shows four in 10 employees said they would need to leave their organization in order to advance their careers. Given these dynamics, it is more important than ever to exert ownership over one’s career.
Taking career ownership is even timelier given that even as hiring increases, too few positions include the potential for significant wage growth. The so-called “career ladder,” under which previous generations of workers were hired and then regularly ascended through the company, is missing the bottom rungs. As my colleague Dr. Bernice Ledbetter, practitioner faculty of organizational theory and management, puts it: “Career mobility is a top priority for millennials, ranking even higher than salaries. However, the modern reality for many millennials is limited internal job mobility, stagnant wages, and career drift.”
I believe Pepperdine University, and the Graziadio Business School in particular, can play a unique role to aid those who seek upward career mobility. Graduate-level education such as a master of business administration (MBA) plays an important role in helping professionals move up the ladder. According to the 2014 Graduate Management Admissions Council Prospective Students Survey, the number one reason people were considering an MBA was to “improve job opportunities.” Almost everyone involved in the career mobility debate agrees that education is key to greater employment opportunities and personal wage growth.
A Pepperdine University Graziadio School of Business and Management study illustrates the need for quality business education. The study, conducted in October 2014 based on nearly 700 private business owners, shows a whopping 87 percent of businesses report that they need to train new hires. Pepperdine can bridge the gap by imparting needed skills before graduation. Our students learn how to tackle real-world, real-time business challenges, providing valuable experience employers want. A key differentiator for this Christian university is Pepperdine’s emphasis on values-centered leadership that inspires professionals to make decisions within a values-driven framework.
The fact is those who acquire leadership skills along with functional skills have better longer-term job prospects. A recent study from the Center for Creative Leadership identified 10 skills valued by current leaders. There was a significant spread between the number one skill–leading people–and other important skills such as strategic planning, resourcefulness, and demonstrating composure.
I conclude with another piece of wisdom from another hockey legend, Luc Robitaille. At a recent Dean’s Executive Leadership Series speaking engagement held by the Graziadio School, the current Los Angeles Kings president of business operations brought the point home: “There is a structure in leadership and we aim to build a team based on character. It’s all about winning with the right people.”