Closing the Talent Gap through Public Policy

Closing the Talent Gap through Public PolicyPosted by William (Bill) Eggers and John Hagel III on August 21, 2012

As the U.S. presidential election draws closer and the policy discussions and debate continue at a brisk pace, we’re examining the connection between public policy and talent. The gap between talent supply and demand is growing in this country. By now you know the issues and perhaps have experienced them firsthand: Shortages in skilled workers; a graying workforce; increasing competition for talent on a global scale; and a relatively short shelf-life for technical skills, making it difficult, but imperative, for workers in all types of jobs to keep up. America’s competitive advantage is also slipping. In the past five years, the U.S. has fallen from first to seventh place in the World Economic Forum’s Global Competitiveness Report.

Can a purposeful focus on talent reverse the slide? We think so, but it will mean reframing existing policies in a number of areas. Three major policy issues—education, employment regulation and immigration—are commonly associated with talent development. Three additional policies, however—foreign investment, unemployment insurance and intellectual property—are rarely examined through the talent lens. All of these policies dramatically affect U.S. talent competitiveness.

Deloitte’s new study, Brawn from brains: Talent, policy and the future of American Competitiveness, looks at each of these policies from a talent perspective and offers ideas for reform. For example:

  • Education — The longtime policy emphasis on K–12 and higher education needs to shift to help individuals build the capacity to evolve skills to meet future challenges. Aligning education with careers, encouraging lifelong and peer-to-peer learning and supporting vocational education and apprenticeships are talent-friendly options.
  • Occupation and employment regulation — The country’s formidable occupational licensing policies, which can vary significantly from state to state, may be stifling growth and competition and deserve scrutiny. Laws that penalize employers who provide training to those outside their company (for example, contractors or suppliers) could also be overhauled to encourage more widespread talent development.
  • Immigration — Other countries have been using their immigration policies to attract and retain top global talent. The U.S. could do the same by modifying its visa programs and permanent residency requirements, encouraging foreign graduate students to stay in the U.S. and allowing the private sector more freedom to bring in the talent it needs from abroad.
  • Foreign direct investment — Striking a better balance between security concerns and talent priorities, aggressively promoting the benefits of setting up shop here and encouraging foreign investment around academic research could create an influx of talent and best practices from all over the world.
  • Unemployment insurance — UI laws were created during the New Deal, when the U.S. labor force and industrial structures were vastly different. Talent-savvy reforms include shifting to one-time, lump sum employment benefits, linking unemployment benefits to professional development and subsidizing work (rather than unemployment) during economic downturns.
  • Unemployment insurance — UI laws were created during the New Deal, when the U.S. labor force and industrial structures were vastly different. Talent-savvy reforms include shifting to one-time, lump sum employment benefits, linking unemployment benefits to professional development and subsidizing work (rather than unemployment) during economic downturns.
  • Intellectual property — In the information age, too much IP protection can be as damaging to innovation as too little. At the same time, too little IP protection inhibits a business environment favorable to talent development by failing to reward individuals for their inventions and innovations. The U.S. must work to balance the market of ideas with the speed of the information age. Adopting Creative Commons practices, encouraging open innovation and overhauling patent laws are a few potential reforms.

These six policy areas are just the beginning. Virtually every domain of public policy ranging from the criminal justice system to urban policy, from trade policy to financial regulation, can contribute to or hinder a talent development agenda. If the U.S. is serious about winning the war for talent, our policy choices can provide a decided strategic advantage.


William (Bill) Eggers William (Bill) Eggers is a director for Deloitte Research, Deloitte Services LP and is responsible for research and thought leadership for Deloitte’s Public Sector industry practices. He is the author of numerous books on government reform and has advised dozens of cities, states and foreign countries and trained hundreds of public officials on government restructuring.
John Hagel III John Hagel III is the co-chairman of the Deloitte Center for the Edge. He has nearly 30 years’ experience as a management consultant, author, speaker and entrepreneur and has helped companies improve their performance by effectively applying information technology to reshape business.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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