Social Skills: The New Employment Requirement?

As of August 2015, employment statistics revealed that US manufacturing growth is drastically slowing, reaching its most sluggish rate in the past two years. Since unemployment is actually decreasing, there are questions about the origins of these slow employment numbers. Some economists theorize that decreasing unemployment does not accurately reflect an increase in people finding employment; rather, it reflects more people ceasing to look for positions. In support of this, the number of people looking for a job has decreased drastically, now at its lowest point in 38 years. The labor force participation rate has held steady at 62.6 percent for the last three months, down from 62.9 percent in May, the lowest point since October 1977, when the rate was 62.4 percent. The job market is changing, and a different skill set is becoming necessary. In a new paper authored by David J. Deming, he argues that the new essential résumé component is social skills.

Deming theorizes that, as manufacturing and other jobs have become more easily automated, the human ability to empathize and to be an effective “team player” has become more essential. Deming creates a team model to explain how workers with these skill sets can effectively trade their responsibilities so they individually and collectively achieve more. Deming conceptualizes that employees with good social skills decrease the overall cost of this trade, allowing workers to achieve more easily.

Using data from the 1980-2012 Occupational Information Network (O*NET), Deming analyzes four variables of a job: routine intensity, non-routine analytical task intensity, social skill intensity, and service intensity. His model supports his original theories, finding that routine jobs are in decline. Additionally, and possibly more alarming, is his finding that non-routine, analytical jobs show much slower growth than jobs focusing more on social skills. Between 1980 and 2012, the number of social task jobs grew 24 percent, while non-routine, analytical jobs grew only 11 percent.

Non-routine, analytical jobs even showed a small decline in 2000. These non-routine, analytical jobs might include math-based and related S.T.E.M. field jobs, if these positions are in decline. Notably, Deming’s study could be impactful for education policymakers, who are encouraging more students to pursue these fields. Furthermore, Deming finds that the demand for social skilled jobs does not only occur in high paying industries but is present across the entire wage distribution and accounts for almost all job growth since 1980. While social skills are needed across the entire wage distribution, positions that require high math skills, but low social skills, are the worst performing since 1980. Employment in this sector has actually declined in all but the highest paying categories.

Employers are already beginning to complain about the social skills of their new potential employees: millennials. Furthermore, most recent employment advice implies that, to be successful in your job hunt, you must network, revealing that social skills are essential for even obtaining a position. It is possible that the decline in routine positions helped give rise to the “sharing economy,” which is reflected in the rise of companies like Uber, Lyft, and AirBnB, companies that allow for piecemeal, non-routine work for those with an entrepreneurial mindset. Separate job projections forecast that 47 percent of all employment could be computerized over the next two decades. If these forecasts hold, the impact of Deming’s model will be even greater for the future workforce.

 

Article Source: The Growing Importance of Social Skills in the Labor Market, David J. Deming, National Bureau of Economic Research, Working Paper, August 2015.

Featured Photo: cc/(Kompania Piwowarska)