In a new report, economists at the Center on Education and the Workforce at Georgetown University found that the ability to communicate at a high level is the No. 1 job competency for all occupations, including science, technology, engineering, and mathematics workers, and can boost earnings by 20 percent. The study, Workplace Basics: The Competencies Employers Want, examined nearly 1,000 occupations to better understand the competencies associated with specific jobs and how employees can increase earnings when certain competencies are used at a high level.
Most workers know that education and experience often lead to increases in pay, but the less tangible components of high-paying jobs require key competencies, or knowledge areas, skills, and abilities, in addition to education and experience. The ability to communicate well, lead a team, or understand digital technology are examples of such competencies.
“The right mix of education and competencies for an occupation can lead to high economic rewards,” says Megan L. Fasules, Ph.D., co-author of the report and an assistant research professor and research economist at CEW. For example, a one-quartile increase in the proficiency with which workers use communication is associated with an average earnings premium of 20 percent, and those professionals most proficient in problem-solving and complex thinking get a 19 percent earnings boost, according to the report.
Conversely, depending on the occupation, workers with lower levels of formal education who use in-demand competencies most intensively may earn more than workers who have higher levels of formal education and are less adept at job competencies.
For the report, CEW researchers analyzed data from the Occupational Information Network, an annually updated database managed by the U.S. Department of Labor that tracks job requirements. The data are compiled through surveys of workers in each occupation. The CEW researchers narrowed the job data into nine broad occupation categories and 19 major competencies.
The report notes the median annual earnings for STEM occupations is $81,600, the most for all the occupations studied. Although high levels of education are typically required for STEM workers — 73 percent of all workers in STEM fields have bachelor’s degrees or higher — those that also master the key competencies associated with their jobs can boost earnings significantly.
However, some competencies do increase earnings more than others. “Workers need to focus not just on college degrees but on the knowledge, skills, and abilities they need to reach high earnings,” says Anthony P. Carnevale, Ph.D., the report’s lead author and a research professor and the director of CEW.
In addition to communication, STEM jobs require mastery of digital technology, mathematics and computer science, and engineering and physical sciences. For STEM, the more technical competencies bring a premium to job applicants, although communication is still essential. “Employers expect students to come out of postsecondary education with all the competencies they need,” Fasules says. In the past, employers would be more willing to provide training to workers who lack some of the competencies to be successful, she adds, “Which is why there is a disconnect between education and the labor market right now.”
According to the report, surveys have revealed that less than half of all employers think recent college graduates are proficient in such key competencies as oral and written skills. “Students are trying to figure out, even in the technical majors, how to get those competencies,” Fasules says. Another factor job seekers must consider is how to include job competencies on resumes. Some, like critical thinking skills, can be difficult to highlight and would have to be emphasized in interviews, she says.
The report’s longer view of shifts in occupational competencies shows a move away from physical labor to more cognitive occupations over the last 50 years. To meet these needs more jobs are requiring bachelor’s degrees and above. The data also reveal a trend toward a job market that requires multiple competencies at a higher level of use for specific positions.
One of the report’s most surprising findings, according to Fasules, is that sales and customer service was one of the top competencies across all occupations. In the past, sales and customer service would appear to be related only to sales occupations. The fact that sales and customer service competency is popping up in other occupations depicts how the current job market requires employees to possess vast amounts of abilities that may not seem specific to an occupation.
The report notes, “the economic value of competencies is complicated. Still, knowing the labor-market value of specific competencies can empower students and workers by helping them determine which knowledge, skills, and abilities to develop as they pursue career success — regardless of the economic climate.”
Fasules notes that recessions typically force accelerated change in the labor market. During the Great Recession, between 2007 and 2009, employers required more secondary education. This latest recession may require workers to possess numerous competencies at a higher level, as noted in the study. The COVID-19 pandemic has left job seekers with one of the worst job markets in decades. To be successful, employees clearly will have to acquire additional competencies associated with an occupation in addition to the necessary education and experience.