February 13, 2024

Introduction

Education and workforce alignment refers to the coordination and harmonization of educational programs and training with the needs of the labor market. It means ensuring the skills and knowledge imparted by educational institutions are in line with the requirements of employers and the job market.

Better alignment helps to reduce skill gaps, enhance employment opportunities, and improve economic well-being. Given the varied interests across students, educational institutions, and employers, improving alignment is a challenge.

Integrating education and workforce systems can better prepare individuals for the demands of the job market. Better information for prospective students and educational institutions about employer demands is also critical to improving alignment and improving Colorado’s labor force.

While Colorado public school districts and higher education institutions have placed growing emphasis on Career and Technical Education programs over the past decade-plus, data suggest that much remains to be done before our state’s education system is truly aligned with the needs of the job market.

Key Findings

In Colorado, there are reasons for both concern and celebration regarding education-to-workforce pathways, with serious implications for both jobseekers and employers. Colorado is rich with potential and substantial efforts are being made to transform that potential into real impact. Adapting an inflexible education system to better align with the rapidly evolving nature of the modern workforce, however, is no easy task. This report details the efforts underway, progress being made, and the areas of unmet need to ensure postsecondary education is well-aligned to Colorado’s future workforce needs.

• By 2031, 73% of Colorado’s jobs will require at least some postsecondary education, and currently 70.7% of Colorado adults currently qualify.^[i] That number includes imported talent—people who attain higher education elsewhere and move to Colorado. At present, only 66.5% of the state’s adult population born in Colorado meets that standard—over 79,000 people short of 73%.

• If Colorado’s current native-born workforce were matched to employers’ future demand, each of the 79,000 additional workers with post-secondary attainment would be earning an extra $27,220 on average, totaling over $2 billion more in wages. This amount of additional earnings would support over 25,000 more jobs, more than double total job growth in 2023. It would add almost $3 billion to the state’s GDP and produce an additional $2 billion in income for all other workers.

• The Education-to-Workforce Alignment Tool is a new model developed by CSI to diagnose the higher education system’s alignment with workforce needs. It measures the direction (oversupply or undersupply) and degree of misalignment between credentials obtained by Colorado higher education graduates and future workforce needs. As part of the statewide effort to improve education alignment, it compliments other data-driven tools that provide information for policy makers, institution leaders, and students.

• The Education-to-Workforce Alignment Tool shows that occupations, including production, life, physical, and social sciences, and transportation and material handling are projected to be overrepresented based on college degree attainment. This means there will likely not be enough jobs in need of that knowledge and skill base by 2031. Conversely, other occupation groups, including business and financial operations, computer and mathematics, and healthcare practitioners, are underrepresented in college output. This means there will be a shortage of people from Colorado higher education institutions to fill those open jobs by 2031.

• Due to a combination of public and private efforts, Colorado’s education-to-employment alignment is trending in the right direction. The class of 2022 graduates is about 56% better aligned with future workforce needs than the 2021 supply (which includes earlier cohorts).

• Recommendations from a 2023 report issued by several Colorado businesses and organizations offers five recommendations to improve education-to-workforce alignment: measure outcomes and direct funding to education training programs that help graduates achieve sustainable careers, create regional talent-development goals and action plans overseen by a workforce intermediary, realign the pathways offered in schools with the needs of employers, streamline and incentivize employer participation in career-connected learning opportunities, and ensure education providers focus on the skills that students and employers need.

Colorado Efforts to Align Education with Workforce

There is much to be acknowledged and commended about Colorado’s attempts to better align its postsecondary education system with workforce demand from the employer’s side. Many efforts are underway, some of which are already making a positive difference.

Last year, the Colorado Commission on Higher Education (CCHE) published its strategic plan, entitled Building Skills for an Evolving Economy. It details the problems for employers, who “struggle to find workers with the skills they need,” and job seekers, who largely “require some form of postsecondary education.”[ii] Closing the gap between these two groups requires systemic alignment to ensure students are on a trajectory toward in-demand, well-paying careers in areas that ease the talent shortages in some of Colorado’s most essential career fields.

The plan aims to promote educational pathways that are economically viable and challenges the state’s institutions of higher education to “guarantee that all education and training leads to a positive return on investment for every Coloradan.”

CCHE also publishes an annual Return on Investment Report, which examines the value proposition of attaining a college education.[iii] Specifically, the report assesses the price, affordability, options, and resultant wage outcomes for collegegoers in Colorado.

These two reports provide important insights, including that:

• Based on 2022 data, Colorado has two job openings for every available worker.
• 4% of Colorado jobs sufficient to support a family of three require some form of postsecondary education.
• Resident undergraduate enrollment in our public institutions of higher education has declined by 19% since 2010–11.

CSI’s Economic Mobility Fellow Tamra Ryan’s report, titled Colorado’s Workforce Woes Should Spell Opportunity for Economic Mobility, found that in early 2023, the labor market had gotten to the tightest point on record, as there were 2.7 jobs for every unemployed person at that time. The resulting loss to the Colorado economy was more than $46 billion in potential GDP.[iv]

In response to these challenging dynamics, the Education to Employment Alliance—comprised of the Colorado Chamber of Commerce, Colorado Inclusive Economy, Colorado Succeeds, Colorado Technology Association, and Colorado Thrives—issued a report in October 2023. The report, Maximizing Human Potential & Economic Mobility for Coloradans, recommends five systematic ways to improve the state’s workforce-development pipeline. Those recommendations are included at end of this report.

While Common Sense Institute has analyzed different data for this report, the theme of enhancing career-connected learning emerged just as strongly in our findings. Therefore, the recommendations in this report echo the call to action made by the Education to Employment Alliance.

In a further demonstration of priority, in 2019, through executive order by Governor Jared Polis, the State of Colorado created the Office of the Future of Work, housed within the Colorado Department of Labor & Employment. Its purpose is to ensure that “Coloradans are equipped with the necessary education, training, skills, and tools to fully participate in the labor force.”[v] The approach of this office is primarily to expand apprenticeships—a learn-while-you-earn model that has proven effective, especially in skilled trade and technical fields.

However, while smart public policies are necessary to create the conditions for improved education-to-workforce pathways, it is incumbent on individual students to make sensible decisions about what areas of study, training, and jobs they pursue. Public policies which advance career-connected learning are only effective if opportunity-seekers are also making informed decisions about job and career choices.

To this end, the state of Colorado partnered with private company Luminance to create a user-friendly tool to help individuals better understand the importance of education and career alignment. This tool, ColoradoFutureJobs.com, provides data, trends, and insights geared toward helping people understand the future labor market and where some gaps might exist. Where there are known unmet talent needs there are career opportunities, and now students can use this resource to inform their education and training pathway.

Finally, in addition to the reports and resources mentioned above, the state legislature and governor have recently taken some definitive steps to improve education-to-workforce alignment. Recognizing that an understanding of some of the sectors in which workforce shortages are pronounced and their impacts on the state’s economy and overall wellbeing is critical, the Colorado General Assembly passed HB23-1246:

“Support In-demand Career Workforce.”[vi] The bill funds apprenticeships in the building and construction trades through the state’s college system and establishes grants to bolster the number of workers in the nursing field—two fields important to Colorado’s current and future workforce needs.

The above makes clear that political, business, and education leaders are prioritizing this issue and working toward solutions. It is commendable and, in many ways, impressive to see this level of coordination across the state, but much work remains to be done. As detailed in this report, there remains a stark misalignment between what the education system is producing and what the workforce truly needs.

This alignment issue has collective implications. Our state’s economic growth and competitiveness is inevitably constrained when employers struggle to find the talent they need. Likewise, individual residents’ financial sustainability and sense of fulfillment will be impacted by how their educational decisions and investments are rewarded—or punished—by the job market.