Four economists from the University of Chicago and Stanford University examined the effect of the improved allocation of talent. They concluded that it explains about twenty-five percent of the total growth in the economy in the last half-century. The GDP per person increased by about 2.5 times over that period.
In 1960 in the United States, 94 percent of doctors and lawyers were white men. By 2010, this dropped to 62 percent. In other highly-skilled occupations, similar changes have occurred during the last fifty years. Given that the innate talent for these professions has unlikely changed over time, the difference in the occupational distribution suggests that a large pool of talented minorities and women in 1960 were not pursuing their comparative advantage.
Get the Highest Return for Talent
The study measures the total productivity effects of the changing allocation of talent over the fifty-year period. They examined the differences in labour market outcomes between black men, black women, white women and white men. They conducted their review through the prism of a Roy model of occupational choice. The model assumes that every person is born with a range of talents across all possible occupations. In an efficient allocation, everyone chooses the profession where he or she obtains the highest return for his or her ability.
I have examined why engineering continues to lag so far behind the other professions regarding gender balance. In 1960, about one percent of engineers were women. Today it is slightly over eleven percent. In Canada, only 18 percent of the new engineering graduates are women. We have a rich database of the behavioural traits to predict success in each role. There is no difference by gender on the career outcomes of women vs. men related to engineering. Our analytics helps an individual choose the occupation where they get the highest return for their talent.
Want an Efficient Economy — Hire the Best Talent
Not utilizing the best talent regardless of gender or race is not only unfair, but it is also economically inefficient. Whichever person was given a position instead of the best-fit talent likely will be worse at the job. As a result, that business is less productive. Given that many other firms are making similar decisions, the economy has unrealized gains.
The U.S. made significant progress reducing barriers for women and people of colour to enter high-skill professions and become managers, over the past half-century. We still have a long way to go when it comes to workplace inclusion related to the full spectrum of human diversity, including race, ethnicity, gender, age, socio-economic status, national origin, sexual orientation, disability and religion. Barriers hurt the individual and the economy.
As more people got the jobs they deserved, the economy has benefitted significantly. This study quantifies the benefits. The researchers found that improved access to high-skill employment for women and minorities accounts for about 25 percent of economic growth from 1960 to 2010.
Access to Education is the Key
The study relies on the assumption that talent is equally distributed across genders and races. Thus the main reasons white men have dominated high-skilled work are the following:
- White men had better access to education
- White men did not face discrimination from employers
- Women and people of colour did not want a high-skilled job
The researchers found that 80% of the gains from 1960 to 2010 from improved educational opportunities for women and people of colour, and 20% from reduced employer discrimination. History has proven the third reason false. Given a chance, white women and people of colour have moved into high-skilled jobs in droves.
More Gains are Possible
The economists estimate that if access to education was fully equal across groups and discrimination were to disappear, US GDP per capita would grow by another 15-20 percent, making everyone better off.
The US still does not allocate talent as well as it should. Thus there is unrealized economic growth. For example:
- fewer than one in five C-suite executives at large publicly traded companies are women
- only 24 of the CEOs at Fortune 500 companies are women, and only three are black
Reducing technical and human capital barriers and helping individuals get the highest return for their talent is a significant source of growth to the economy. The levelling out of changes will slow growth. Two steps you can take today for the good of the economy (and your business) are to put in place bias-free hiring practices and using behavioural DNA analytics to select the best-fit candidate. As an individual, discover the highest and best use of your natural talents and build your talent stack leveraging your behavioural strengths.
Treat Yourself Like Someone You Are Responsible For Helping
This title is Rule #2 in Jordan Peterson’s 12 Rules of Life: An Antidote to Chaos. I know many managers who are great at coaching their staff on how to be successful, yet they are terrible at planning their own career and development.
Strengthen the individual. Start with yourself. Take care of yourself. Define who you are. Refine your personality. Choose your destination and articulate your being.”—Jordan Peterson
Peterson states that it is easier to show sympathy to others, including animals than it is to yourself — there is no greater critic than the self. Take care of yourself in the same way that you would take care of someone else that you love.
So when it comes to career planning, what would you recommend to someone who is not realizing their career potential?
You would likely suggest that they take responsibility for their career and not continue to go with the flow. You would probably say that they should have an assessment of their talent and leverage their strengths, identify something that they like and will be good at — then build a plan to achieve it.
Do it for yourself. We offer a career assessment and personal development using advanced analytics to assist you. Understanding and realizing your career potential is good for you and good for the economy.
Challenge — What's Right For You?
Solution = Leverage Your Talent Stack + Build Your Career Capital
Identify your unique behavioral strengths, build your career capital and leverage your unique talent stack for lifetime success.
- Grow your leadership potential by targeting your critical developmental needs
- Determine your crucial career success factors, allowing for more focused efforts
- Discover your best and most successful career direction
- Find out about your strengths and interests in different career areas
Knowing yourself is the first step to being happy. Moreover, staying happy is an ongoing process of regrounding your long-term goals with your current objectives. When those align, you’re on the path to a job you can adore. Know when to find a better job as your best option may be to fall in love with your job (again) We also offer a personal development plan to help you achieve career success and satisfaction.