Got skills?

In 10 years, available jobs could outnumber workers by 6.7 million, according to a new analysis by the nonprofit Employment Policy Foundation in Washington. By 2030, the gap could widen to 35 million.

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Shortages are already visible in certain occupations - nursing, for example - but across the board, employers could start to feel a pinch in the next few years. Whether they need people with basic literacy and computer skills or a flair for management, they may just find that they're competing for a piece of a shrinking pie.

Some of the explanation is pure demographics. As baby boomers start to transition out of the labor market, even if they work beyond traditional retirement age, there simply aren't as many younger workers to replace them.

The gap is wider when one takes into account the education level needed for the types of jobs being created. There will be 30.7 million job openings for people with at least a two-year college degree in the next 10 years, the EPF estimates. But only 23.3 million people are expected to earn those degrees.

"If the economy really starts to heat up ... companies are going to start scrambling," says Michael Zey, futurist and professor of management at Montclair State University in Mt. Freedom, N.J. "The first thing they'll try to do is get back some workers that they let go, but many of those people have already taken career turns.... Companies are being very shortsighted at this point."

When it comes to bridging the skills gap, some people have become visionary out of necessity. For more than a decade, Holyoke, Mass., has been facing the paradox that could soon land on others' doorsteps: Employers struggle to fill job openings while residents unqualified for the positions sit idle.

The city of 42,000 has hired workers from surrounding towns for professional and manufacturing jobs, partly because of a lack of English proficiency among some of the Latinos who make up nearly half of Holyoke's population.

Ask Bob Fowler about the skills gap in Holyoke and the first thing he'll tell you is that it's not a matter of people having any less of a work ethic now than when the "Paper City" first built up its blocks of factories along the Connecticut River in the 19th century.

It's technology.

As chairman and chief executive officer of Hampden Papers Inc., Mr. Fowler employs 160 people to create specialty paper products - a tradition handed down from his great grandfather, George Fowler, who cofounded the company in 1880. (The present-day Fowler, white beard and all, bears a striking resemblance to the man in the black-and-white photo on the wall.)

For new hires, a higher bar

But the changes inside the factory verge on revolutionary. To illustrate, Fowler displays a scuffed-up square flint stone with beveled edges - heavy, but small enough to hold in one palm. For nearly a century, machines swung these stones over the paper as it rolled through, buffing a wax coating until it shined.

The machines moved slowly enough that an operator could monitor four or five at once. It was almost as simple as pushing a green button at the beginning of the shift and a red button at the end.

When new immigrants arrived, "you could find someone [on staff] who spoke their language and give them instructions for their entire career in about an hour," Fowler says. "I don't mean to demean it, because learning a machine like this was really an art. But you didn't need complex mathematical and linguistic skills to make a union wage and put your kids through college."

The company "got out of the stone age" in 1973, he says, installing faster and more complicated machines. Employees needed more training, and their mistakes got costlier. If something is set up improperly, "you can make enough bad paper in an eight-hour shift to stretch from here to Boston and back again," Fowler says.

As job requirements changed, he was determined not to leave any employees behind. For seven years, an in-house teacher offered English and math classes on company time. Now, Hampden reimburses for academic courses that employees opt to take on their own.

Making his way through the plant's ground floor, Fowler talks over the rhythmic whir of a giant laminator about how he wanted to require an associate's degree for the people who operate it. The union blocked that move, but some of the operators have earned their degrees anyway. On a nearby machine, two employees pace back and forth, scrutinizing rolls of gold paper and periodically reaching a finger up to an attached touch-screen computer.

Fowler looks beyond his own company, too. He participates in local workforce-development initiatives and advocates for everything from education reform to more government funding for training. He worries about all the people still being left behind. One day a young Latino came in and asked the receptionist if he could take an application home. She asked him to fill it out in an adjacent room, because the company uses the form as a literacy screen. When he came out, two hours later, he left it with her and scurried out. He had written only his name. Fowler heard the story when he happened by the receptionist's desk and noticed she had been crying.

A management-skills deficiency

Such skills gaps are showing up nationwide - and at all levels of hiring and employment. About 60 percent of employers test job applicants in some form, and 38 percent are deficient in basic reading and math, according to the American Management Association. At the management level, the AMA also reports shortcomings in conceptual skills, communication, and problem solving.

That's of particular concern, because by 2013, the EPF report says, nearly 40 percent of US jobs will be professional or managerial.

"When I speak to audiences of senior executives, I ask how many companies are experiencing difficulty right now in filling critical positions, and between 70 and 80 percent of the hands go up," says Roger Herman, lead author of "Impending Crisis: Too Many Jobs, Too Few People" and CEO of the Herman Group consulting firm in Greensboro, N.C.

But with some executives struggling to keep their companies afloat in a rocky economy, it's not easy to get them to think strategically about the future workforce crunch.

Training and development of employees are often the first areas to be cut, and companies rarely measure how that might be hurting their bottom line, according to a recent study by Accenture, a New York consulting firm.

It's also difficult to project more than a few years ahead. No one knows for sure if technological advances will create more jobs than they make obsolete. And, of course, if the economy unexpectedly nosedives, a labor shortage won't be the problem.

But barring such dramatic events, closing the skills gap will require a combination of educational gains, more immigration, increased productivity, and higher participation in the workforce, the EPF report concludes.

Everyone's standard of living is on the line. One measure is the growth in per capita personal income (all income divided by the total population). Currently it's about $31,000. By 2033, that could double to $63,000 after adjusting for inflation, the EPF forecasts. But if a labor and skills gap persists, it might reach only $50,000.

A call for more immigration may raise eyebrows, because this period of higher unemployment has caused resentment to rise. But to say that immigrants are "taking jobs" is misleading, Dr. Zey says. "We're not filling them."

At the same time, he says, it's important to change cultural attitudes in the US that discourage people from learning math and technical skills - areas in which firms have sought special visas for foreign employees. "You have to correct the system, not just go for a global brain drain," Zey says.

To attract and retain workers and develop their skills, experts say firms will probably turn to a range of solutions including more on-the-job training and mentoring, better child-care assistance, a return to incentives such as signing bonuses, and more openness to hiring people with disabilities.

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