As a part of its ongoing efforts to understand local labor market and economic issues that low- and moderate-income people face, the Atlanta Fed's community and economic development group has held listening sessions in Atlanta, Jacksonville, Nashville, Birmingham, Miami, and New Orleans over the last six months. The sessions with professionals in the field have focused on issues of employment, labor market opportunities for low- and moderate-income workers, and job training across the Southeast.1 Workforce and community development organizations expressed concern about soft skills deficiencies and the difficulty that presents in finding work for unemployed workers and workers who have been out of the labor market for long periods of time. While there is consensus that there is a need for soft skill development, there is less agreement on what those skills entail.

Workforce training providers across the Southeast helped delineate the types of soft skills that employers request and helped create a better categorization of the skills. They can generally be divided into two categories: essential and workplace skills. These two sets of skills are both highly valued, but they imply different interventions.

Essential skills are those necessary to be hired and hold onto a job. These include showing up for work on time, keeping to a work schedule, dressing appropriately, having a good work ethic, and staying sober at work. Atlanta Fed President Dennis Lockhart called these "prerequisites for employment" at the Transforming U.S. Workforce Development Policies for the 21st Century conference held last October. Addressing essential skill deficiencies requires a number of interventions, few of which are related to actual skill development. They may include developing services (ranging from health care, child care, and transportation) to helping create stability and reliability for workers from economically disadvantaged neighborhoods.

Many of the essential skills interventions are human services oriented—creating community support that can help workers focus on their jobs and less on the many challenges they face at home. These community services may be coupled with an "introduction to the workplace" training program, which typically includes workplace norms, expectations of employees, and some basic skill development. However, a program alone is not likely to address the many challenges these residents face related to employability. In The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy, William Julius Wilson notes that the obstacles poor workers face are difficult to discuss comprehensively because they are related to race, economic disadvantage, inequality, and the social pathologies associated with these dynamics. Comprehensive educational, community, and intensive human service interventions are likely the best strategy to address essential skill development.

Workplace skills help make workers valuable to their employers and create the basis for continued employability and advancement. Stakeholders in the District have identified basic numeracy, reading skills, computer literacy, creativity, and adaptability as key workplace-focused soft skills. These observations largely fall in line with work from the research community. In the influential Teaching the New Basic Skills: Principles for Educating Children to Thrive in a Changing EconomyOff-site link, Richard J. Murnane and Frank Levy suggest that the critical workplace skills, or using their term, the "new basic skills," include:

  • The ability to read at the ninth-grade level or higher
  • The ability to do math at the ninth-grade level or higher
  • The ability to solve problems that are not structured and where different hypotheses must be tested
  • The ability to work with people of different backgrounds in group settings
  • The ability to communicate effectively both in writing and orally
  • The ability to use computers to perform basic functions, such as word processing.2

Teaching workplace skills is difficult, but teaching essential skills may pose more of a multilayered challenge. Workers without strong workplace skills are likely to find themselves in positions that have limited opportunity for career growth or advancement, pay low wages, and are likely to be eliminated due to changes in the economy.

Workforce development organizations, community development groups, and state and local governments across the Southeast are working to create programs and policies that support employment and growth for low-wage workers. Developing strong soft skills in the labor force may lead to robust local economic conditions and better labor market outcomes for workers. And considering the different types of soft skill challenges—either essential or workplace skills—may help direct community development organizations toward the most effective interventions for certain populations.

By Stuart Andreason, CED adviser, human capital and workforce development

Participate in Webinar Series on Soft Skills
The issue of developing soft skills in job seekers will be explored in a three-part webinar series hosted by the St. Louis Fed this spring. The series is focused on initiatives at various life stages that cultivate the soft skills demanded by employers. RegistrationOff-site link is now open for the first webinar scheduled for March 5, which will focus on early childhood efforts. Subsequent webinars scheduled for April 16 and May 7 will focus on initiatives at the K–12 level and in higher education, respectively.


1 The Southeast refers to the six states that make up the Sixth Federal Reserve District: Alabama, Florida, and Georgia and parts of Mississippi, Louisiana, and Tennessee.

2 This list is derived from Murnane and Levy's abstract of the book available in the link above.