What is 'Skilled Labor'

Skilled labor is a segment of the workforce with specialized know-how, training and experience to carry out more-complex physical or mental tasks than routine job functions. Skilled labor is generally characterized by higher education, expertise levels attained through training and experience, and higher wages. 

BREAKING DOWN 'Skilled Labor'

Skilled labor in an increasingly global competitive world is essential. Developing countries in Asia are rapidly building up their skilled labor pools. Meanwhile, the U.S. and Western European countries, which have dominated economic advancements since the mid-1800s, are paying more attention to preservation and growth of their skilled labor workforce. Corporate America (an informal term for large companies) has extensive formal training programs for both new and existing workers, while small and medium-sized firms may have formal programs, but if not, on-the-job training to build up skills is the norm.

The U.S. Department of Labor (DOL) also provides government-sanctioned programs through the Employment & Training Administration, American Job Center Network and CareerOne Stop, which serves as a directory of local training programs. Some countries in Europe have been on the vanguard of developing skilled labor. Germany is particularly considered a role model with its apprenticeship programs throughout its corporate sector - in auto plants, machine manufacturing facilities, technology hardware and software development offices, banking offices. The U.S. is just beginning to replicate this training model for skilled labor.

The Future of Skilled Labor

With rapid changes in the economy with respect to the growth of knowledge-based jobs, skilled labor of the future may be different from the skilled labor of the past and present. The "rise of the machine" is engendering great debate and a certain level of anxiety among skilled workers, who wonder if they will eventually be replaced on the job by a robot or a computer algorithm. Those who have yet to join the working world wonder what kinds of skills will lead to gainful employment in a new era. High-end manufacturing and many professional services that require specialized knowledge such law, medicine and finance are at this moment under assault from the rise of the machine. Skills in STEM (science, technology, engineering and math) are currently being promoted as the answer to staying competitive in the modern global workforce.

RELATED TERMS
  1. Soft Skills

    Soft skills are the character traits and interpersonal skills ...
  2. Hard Skills

    Hard skills are specific, teachable abilities that can be defined ...
  3. Interpersonal Skills

    Interpersonal skills in the business domain refers to an employee's ...
  4. Underemployment

    Underemployment is a measure of employment and labor utilization ...
  5. Labor Intensive

    Labor intensive refers to a process or industry that requires ...
  6. One-Third Rule

    A rule of thumb that estimates the change in labor productivity ...
Related Articles
  1. Personal Finance

    Most Valuable Career Skills of 2018

    Having the right career skills can make you more competitive and successful, whatever your job or field. Here are those most prized by employers in 2018.
  2. Insights

    Potential Solutions to the Growing Skills Gap

    The modern economy has resulted in a growing skills gap between workers and employers.
  3. Insights

    How Education and Training Affect the Economy

    Education and training benefit not only the worker, but also the employer and the country as a whole.
  4. Personal Finance

    The Top 5 Skills an Investment Banker Needs

    What are the top skills investment bankers need to have? Are i-bankers born or made?
  5. Insights

    What is jobless growth?

    What are the effects that a jobless growth economy has on workers and investors alike. Learn about these effects here.
  6. Personal Finance

    How to Change Careers by Selling Your Skills

    Most people acquire multiple skillsets in their career. Learn how others use their professional skills to change into a new career.
  7. Personal Finance

    The 9 Worst Career Choices Right Now

    These careers are on the way out; here are some alternatives you can switch to.
  8. Personal Finance

    Top Employment Skills For 2013

    With the U.S. employment market seeing slight growth, it is worth considering which skills are the most important for job seekers in 2013.
  9. Personal Finance

    How to Write a Great Investment Banking Resume

    When looking for career opportunities in the investment banking industry, a persuasive resume can give you the edge you need in a competitive market.
  10. Tech

    Robots at Work: 6 Ways to Beat Workplace Automation

    As companies become increasingly automated and human workers are replaced by robots, there are ways to stay relevant in the 21st century.
RELATED FAQS
  1. How do companies measure labor supply in human resources planning?

    Find out how and why a company's human resources department would measure labor supply, and what policies would address a ... Read Answer >>
  2. How are labor demand forecasts made in human resources planning?

    Discover how human resource planning might be used to estimate the correct demand for labor in a given market, both qualitatively ... Read Answer >>
  3. How do companies balance labor supply and demand in human resources planning?

    Find out what it means for a company to balance labor supply and demand, and learn how human resources planning can strategically ... Read Answer >>
  4. What is the key difference between the participation rate and the unemployment rate?

    Learn the key differences between the participation rate and unemployment rate, and how they can provide a clearer picture ... Read Answer >>
  5. How is an economy formed and why does it grow?

    Find out how an economy forms and why it grows, including the role that financial markets play and how productivity increases ... Read Answer >>
Trading Center