Foundational Skills in the Service Sector

This paper describes the characteristics of American workers employed in key service-sector industries who lack foundational skills, highlights promising practices and interventions to help them upskill, and details key federal and state policy levers that foster economic mobility.

Amanda Bergson-Shilcock
Author(s) Organizational Affiliation
National Skills Coalition
Publication Year
Resource Type
Number of Pages

Approximately forty-eight million Americans are employed in the service sector industries of retail, health and social assistance, and leisure and hospitality. Data from the Organization for Economic Cooperation and Development (OECD) Survey of Adult Skills indicates that:

  • Low skills are prevalent among service sector workers.
  • Most low-skilled workers have at least a high school diploma or equivalent.
  • Nearly two out of three low-skilled workers have children.
  • Most low-skilled workers have been with their employer for at least 3 years.
  • Most low-skilled workers have low earnings.
  • Despite their skill gaps, many workers regularly use reading, writing, and math on the job.
  • Workers with low digital skills are more likely to use computers on the job than those with low literacy skills.
  • A majority of workers are continuing to learn new things on the job.
  • More than 1 in 3 workers regularly teach people on the job.
  • Nearly 1 in 4 low-skilled workers are supervisors.

Many workers actively pursue education and training opportunities:

  • One in ten have participated in a basic skills class in the previous year.
  • 27% have pursued a formal degree or certificate in the previous year.
  • 69% of those in a degree or certificate program are doing so for job-related reasons.

The analysis also identified obstacles that prevent workers from accessing upskilling opportunities:

  • Employers are more likely to financially support workers’ participation in non-formal training than in formal degree or certificate programs.
  • Logistical barriers such as lack of time and money, make it hard for workers to participate in learning opportunities.
  • The costs of the digital technology needed to participate in distance education are prohibitive for many workers.

Small- and medium-sized employers interested in helping employees build skills and advance in their companies have a range of interventions available to them including:

  • Partnering with other firms and education providers to provide training.
  • Providing in-house, on-site training.
  • Providing ancillary services such as peer mentoring, helping employees acquire English language skills or helping them prepare for U.S. citizenship.
  • Matching employee contributions to cover educational costs.

While many of the employer practices can be implemented on a small scale by individual companies, facilitating widespread economic mobility for service-sector workers requires advancing proven policies at the federal and state levels.

At the federal level, policies that foster employee upskilling include:

  • Making sector partnerships America’s way of doing business.
  • Making it easier for workers to navigate career pathways.
  • Fully funding federal investment in adult education.
  • Expanding financial aid to be more responsive to working learners and businesses.
  • Supporting the expansion of work-based learning opportunities.
  • Incentivizing private investment in frontline workers with basic skill needs.

States can support upskilling by:

  • Funding and supporting industry sector partnerships.
  • Advancing effective Integrated Education and Training models.
  • Supporting job-driven financial aid policies.
  • Establishing stackable credential policies that include industry certifications.
  • Supporting businesses in providing work-based learning opportunities.
What the experts say

Foundational Skills in the Service Sector provides good examples of programs and important policy recommendations. The resource does not differentiate between sub-sectors, disseminating assumptions about service works, and narrowing the focus of interested parties to primarily government and employers. Citations are scarce particularly in the programmatic section. Some policy suggestions have value but, other than the need for greater investment in adult education and workforce development, seem unrelated to the arguments in the paper. 

The research described in this resource has value for classroom instructors (e.g. better understanding specific proficiencies service sector workers need on the job and what motivates workers to seek further education) and program managers reaching out to workforce development entities, employers, and support programs. Adult educators will find a bonus in Foundational Skills’ extensive section describing model programs and recommended policies—with many helpful citations. Well-documented partnerships are described as well as programs that employers can undertake on their own.  A “Taking Upskilling to Scale” section describes policies that advocates can promote at the federal and state level such as “Make it easier for workers to navigate career pathways.”

Adult education administrators and lead teachers will find this specific analysis of PIAAC data on the service sector workforce - arguably the largest employer sector of low skilled adults - very useful for both strategic and operational planning. The paper's argument that low skills among America's workforce lowers productivity and is a barrier to personal economic mobility supports adult education advocacy on state and local workforce boards, regional economic development corporations, chambers of commerce, and with specific employers. This paper is a call to action within America's largest and fastest growing industry sector.

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