Unlocking Experience-Based Job Progressions for Millions of Workers

By McKinsey & Company, Federal Reserve Bank of Atlanta, National Urban League, and Markle Foundation – Published June 2, 2021 by McKinsey & Company –  Subscribe to the WFMonitor eNewsletter

The McKinsey Global Institute surveyed the job histories of 29 million people, four million of whom without a four-year college degree, and examined more than 800 occupations to map possible quality career paths for nondegree, adult workers. This report builds on previous labor market research from Rework America Alliance, Opportunity@Work, Brookings Institution, Burning Glass Technologies, Emsi, and the Federal Reserve Banks of Cleveland and Philadelphia

Experience-Based Job Progression
Based on an analysis of existing research on the value of labor market skills, McKinsey found that “unemployed workers from low-wage jobs have acquired the experience needed to make them eligible for good, viable jobs in the near term – and that over time, these workers can progress in their careers from good, viable jobs to full participation in the ever-changing digital economy’s labor market.” 

To bridge low-wage workers to higher-paying, quality career paths, McKinsey identified “Gateway Occupations” that are accessible to low-wage workers and act as stepping stones to low risk, automation-resilient positions offering salaries greater than $42,000 (referred to as “Target Occupations”). Gateway Occupations require similar skills as low-wage entry-level jobs (referred to as “Origin Occupations”) and, through on-the-job experience, individuals can leverage skills gained from Origin Occupations to Gateway and then Target Occupations. For example, workers who enter the labor market as food servers gain interpersonal and communication skills that are conferrable to a training and development specialist position (Gateway) and then to a sales manager position (Target). By building on skills from previous work experience, nondegree individuals can competently fill livable-wage occupations without having to invest in a four-year degree. For employers in specific industries, tracking competencies gained from work experience can expand their hiring pool and increase workforce diversity. 

Quantifying Nondegree Career Pathways in the U.S Labor Market
In addition to Gateway Occupations, McKinsey defines “Historical Adjacencies” and “mid-wage Origin” occupations as opportunities for entry-level workers to build skills and transition to Target occupations. Mid-wage Origin jobs are a subset of Origin jobs that are on the higher end of the pay range and “can provide a step up from a low-wage Origin position.” Although mid-wage Origins do not act as a “springboard” to Targets like Gateways do, they offer more financial support than low-wage Origins. Historical Adjacencies are jobs accessible to workers without a four-year degree and can provide annual salaries greater than $42,000. However, Historical Adjacencies do not traditionally “unlock progressions to Targets.” 

By analyzing O*NET data, McKinsey quantified Gateway, Historical Adjacency, and mid-wage Origin occupations available to nondegree workers in the U.S. labor market: 

  • First and best are Gateways. Gateways make up 34% of all good, viable jobs tracked by McKinsey.
  • Next are Historical Adjacencies. Historical Adjacencies make up 14% of all good, viable jobs. These jobs do not require a four-year degree and can give workers foundational experience for a career path. However, Historical Adjacencies have not been significantly proven to be springboards to Targets. Historical Adjacency include occupations such as pipe fitters and steamfitters, plumbers, and heating and air-conditioning mechanics and installers.
  • Last are mid-wage Origins. 52% of good, viable jobs, mid-wage Origins do not connect workers to higher-wage positions or provide wages on par with Gateways and Historical Adjacencies. These roles offer modest wage increases to low-wage Origins, with median annual incomes from $37,000 to $42,000. Production, planning, and expediting clerks and telecommunications-equipment installers and repairers are positions included within the mid-wage Origins subgroup. Such positions are accessible to workers in Origin job fields related to maintenance or secretarial work. 

Identifying Opportunities for Experience-Based Job Seekers
McKinsey notes two specific Origin-to-Gateway-to-Target job progressions available to experience-based job seekers that are likely to provide economic mobility:

  • Customer Service to IT Roles: According to McKinsey’s historical data set, approximately 11,000 workers who had been customer service representatives transitioned to IT roles requiring sales and customer-facing experience skills. In turn, these roles provide pathways to higher-wage Target occupations such as computer systems analyst, requiring problem-solving, business, and IT skills. 
  • Food Service to Business Roles:  Based on the 7,000 job transitions of food servers from Emsi’s 2019 U.S. workforce transitions data set, it is likely individuals in this occupation can move into business roles such as advertising sales agents, financial-service sales agents, or sales representatives for services. Customer service and sales skills built from food service experience can provide a foundation for the development of broader business and account management skills. For example, experience-based skills such as selling techniques, research, account management, and general leadership and management can be built on entry-level food server skill requirements. 

Across all occupations, “some of the largest Gateways (by volume of transitions in from Origins) create many options for employment.” Top Gateway positions in industries like healthcare and social assistance, information, and accommodation and food services have cross-sector relevance that “allows workers to mitigate the risk of their career progressions and broadens the types of work available to them.” 

For Origins, “occupations with the best Gateway options, combining both the variety and the accessibility of options, tend to be people-oriented roles, such as customer service representatives, retail salespeople, secretaries, and supervisors – along side a few Origin roles with specialized technical skills, such as bookkeeping clerks.” Experience-based skills like project and people management required for these positions cannot be learned instantly or in a classroom, making them valuable on the labor market. Job seekers with these skills can qualify for Gateway positions such as HR managers, real estate sales agents, and business-operations specialists. 

Predicted Job Growth for 2021
Two industries in which viable jobs are most likely to see significant growth are healthcare and industrials (comprising manufacturing and construction). Although both industries are likely to see job growth for roles not requiring a bachelor’s degree, there are also likely to be barriers related to job access and advancement. 

In the healthcare industry, “roles such as registered nurses, licensed vocational nurses, and dental hygienists to other good jobs such as medical technicians and paramedics and healthcare support workers” are expected to see increased demand from employers. However, these roles “require a great deal of job-specific preparation,” posing financial barriers to access. For example, allied health roles “require extensive training and certification – and thus time and money.” 

In industrials, in addition to current growth projections, “a major federal-infrastructure or climate-spending program could massively boost growth in good, viable industrial jobs – ranging from first-line supervisors and those in construction trades to operating engineers and industrial-machinery mechanics.” Also, jobs accessible to entry-level workers in construction trades such as plumbing, pipe fitting, and welding, are expected to continue to be in demand and offer quality wages. In the long-term however, demand for viable industrial positions available to low-wage job seekers is difficult to predict. Historically, it is an industry that has produced few Gateway occupations. 

Cross-sector digital roles are occupations that are projected to experience growth in 2021. Roles such as software-quality-assurance engineers and testers and telecommunications-engineering specialists that are accessible to experience-based job seekers are expected to see significant growth. “Demand exists for these roles not merely in the information sector but also across many other sectors, including healthcare and industrials.” Despite not requiring a four-year degree, anticipated barriers for these roles include: time required for training, funds for purchasing hardware, access to reliable internet, and employer’s not being aware that nondegree workers can competently fill IT positions.  

Expanding Access to Gateways
Across Gateway jobs, significant racial equity and gender gaps exist. To close these gaps, institutions that support job seekers should: 

  • Devote time and resources to understanding systemic barriers to achieving higher levels of representation (for example, the proximity of jobs to diverse neighborhoods and transportation)—and use the findings to inform actions. 
  • Focus on addressing racial and gender barriers, particularly in progressions into the 77 Gateway occupations, so that Black, Latinx, and female job seekers are able to transition to Gateways at least in the same proportion as they are employed in the Origins.
  • Support training providers in identifying, prioritizing, and making available the targeted training interventions that would allow more job seekers to access Gateways and other good, viable jobs. 
  • Help employers adjust to their hiring practices for Gateways and other good, viable jobs to draw on a wider talent pool that includes experience-based job seekers from Origin positions. 

Providing Continuous, Hands-On Support to Job Seekers
Although identifying quality Gateway occupations and nondegree pathways is a good starting point for helping job seekers, it does not answer labor market questions such as: Which jobs will return during the pandemic recovery? How quickly will new job opportunities need to be filled by employers? To face these challenges, job seekers need support to adapt to changes in the economy and be prepared for a prolonged pandemic recovery. 

“In scenarios analyzed to date by McKinsey and Oxford Economics, employment might not recover to pre-COVID-19 levels until 2022 in the optimistic case or until as late as 2024 in the case considered to be most likely by employers; the outlooks are similar to those from analyses by Moody’s and other research leaders.” In every possible economic scenario, it is necessary for workforce development organizations and higher education to help job seekers navigate the complexities of the labor market during the recovery. By tracking labor demand, salary increases, and accessibility from Origins, organizations can guide job seekers to job opportunities with high probabilities of employment. 

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