How Effective Is Retraining After a Layoff?

"Every time someone’s laid off now, they need to start over,” says Gary Burtless, a labor economist with the Brookings Institute. And that’s exactly what thousands of unemployed workers are doing.

But as a recent Wall Street Journal article pointed out, “retraining offers no quick fix,” while retraining may improve unemployed workers' long-term prospects, many are struggling to find work in the short term. High unemployment and even higher underemployment has created a deep pool of workers competing for the positions available. For many workers, training opens doors — but it doesn't necessarily shorten the job search. Although industries like health care and education are still growing and hiring, millions of workers are training to enter these fields. Applications keep piling up.

Labor Department figures show there was one job opening for every 5.4 unemployed workers seeking work in January. That compares with about one opening for every two job seekers before the recession.

Jobs and growth expert Tom Gimbel explains that what is happening now is no different than 100 years ago when workers who forged horseshoes had to learn to make tires. Gimbel, who is also CEO of Chicago-based staffing and recruiting firm Lasalle Network, sees the elimination of many jobs, including semi-skilled and professional jobs, due to automation and efficiencies. That means that re-training itself isn’t the solution. In many cases, a successful job search will end only with re-education.

“People who have never been without a job in their lives are finding themselves unemployed,” writes Joe Watson in his new book, "Where the Jobs are Now."  Watson suggests that workers seeking job security in the future should look at industries such as health care, biotechnology, education, green energy, government and information technology. 

Demand is growing for accounting jobs too. The job site Indeed.com currently has nearly 125,000 job postings in the accounting industry, an increase of 10% over February. But the jobs in highest demand are at tax professionals, financial analysts, and compliance officers. The starting salaries are good and apparently rising again after dropping or stalling in 2009. But careers and experience in these jobs are not something you acquire in the short-term. Many require a minimum of a two-year degree. Some require post-graduate training.  

Another industry that is growing and paying off is engineering. A new report from the National Association of Colleges and Employers finds that eight of the top 10 best-paid majors are in engineering, with petroleum engineering topping off the list at $86,220. Not only do engineering majors earn the most, but the field is expected to grow at a fast clip over the next eight years with 178,300 jobs added by 2018. Biomedical engineering jobs are expected to increase by an astounding 72%–the top-growing field.

Even specialized, in-demand graduates like engineering majors are finding it difficult to find employment in this economy. National Association of Colleges and Employers found that only 42% of engineering majors found jobs in 2009, versus 70% in 2007.

Recent college graduates have been hit hard in the current recession. So far things are not looking good for liberal arts majors. Their annual unemployment rate in 2009 was 9.1%, the highest it has been since 1982. And the average starting salary decreased 11% since last year.

While it’s easy to get overwhelmed with all the doom-and-gloom, training and education in the right industries is bound to pay off. Between today and 2020, it is expected that 74 percent of all jobs created in America will be high-paying jobs for high-skilled workers. While there will be a need for 123 million of those talented people, only 50 million Americans will qualify.  

That forecast is the reason why my co-author and I selected “The Future’s So Bright that I Gotta Wear Shades” as the opening title chapter in our book, "The Coming Job Boom." The unemployment road ahead is filled with opportunity for those who have the foresight to see what is coming and willing to do something about it.