Transferable Skills with the Biggest Payoff

Everyone understands that improved skills are the key to higher income. But perhaps you’re wondering which skills carry the most clout. To make this comparison, I’m going to focus on the transferable skills in the taxonomy used by the O*NET database.

To identify the most lucrative transferable skills, I used the statistical procedure known as correlation, which measures how closely one characteristic varies along with another characteristic.

For example, when cigarette smoking first became popular, doctors noticed that heavy smokers were more often afflicted with certain diseases. Long before researchers were able to pinpoint the mechanisms by which the smoke caused harmful biological processes, they were able to demonstrate a statistical correlation between these two factors. To be sure, sometimes correlations are misleading. Some doctors once believed that there was a connection between polio and ice cream because the disease struck most often during the summer, when the most ice cream was eaten. Eventually the polio virus was discovered, and swimming was found to be an excellent way to acquire it.

Nevertheless, correlations often indicate a cause-and-effect relationship. And when it comes to the relationship between skills and employability, any employer can tell you that this is a real relationship, not like polio and ice cream. Employers look for highly skilled workers and pay them premium salaries.

So computing the correlations between the 35 O*NET skills and the occupations in the American workforce can be a useful indication of which skills have the highest value in the job market. A perfect correlation would be 1.0, meaning that any difference in skill levels between any two occupations is accompanied by a commensurate increase in the wages paid by those occupations. It would also mean that the difference goes in the same direction: higher pay when there’s higher skill. If skill increases were linked to wage decreases, the correlation would be a negative number. If no relationship existed between the two factors, just random variation, the correlation would be zero.

The following table shows, from highest to lowest, the correlations between each of the 35 O*NET skills and the median wages paid in the 747 occupations that are included in both the O*NET database and the salary surveys of the Department of Labor.

Correlations Between O*NET Skills and Occupational Wages

Skill	Definition	Correlation
Judgment and Decision Making	Weighing the relative costs and benefits of a potential action.	0.8
Complex Problem Solving	Identifying complex problems, reviewing the options, and implementing solutions.	0.7
Active Learning	Working with new material or information to grasp its implications.	0.7
Reading Comprehension	Understanding written sentences and paragraphs in work-related documents.	0.7
Critical Thinking	Using logic and analysis to identify the strengths and weaknesses of different approaches.	0.7
Time Management	Managing one’s own time and the time of others.	0.7
Systems Evaluation	Looking at many indicators of system performance and taking into account their accuracy.	0.7
Monitoring	Assessing how well one is doing when learning or doing something.	0.7
Active Listening	Listening to what other people are saying and asking questions as appropriate.	0.6
Writing	Communicating effectively with others in writing as indicated by the needs of the audience.	0.6
Systems Analysis	Determining how a system should work and how changes will affect outcomes.	0.6
Operations Analysis	Analyzing needs and product requirements to create a design.	0.6
Speaking	Talking to others to effectively convey information.	0.6
Science	Using scientific methods to solve problems.	0.6
Instructing	Teaching others how to do something.	0.6
Management of Personnel Resources	Motivating, developing, and directing people as they work; identifying the best people for the job.	0.6
Persuasion	Persuading others to approach things differently.	0.6
Coordination	Adjusting actions in relation to others’ actions.	0.6
Learning Strategies	Using multiple approaches when learning or teaching new things.	0.6
Social Perceptiveness	Being aware of others’ reactions and understanding why they react the way they do.	0.5
Mathematics	Using mathematics to solve problems.	0.5
Negotiation	Bringing others together and trying to reconcile differences.	0.5
Management of Financial Resources	Determining how money will be spent to get the work done and accounting for these expenditures.	0.5
Management of Material Resources	Obtaining and seeing to the appropriate use of equipment, facilities, and materials needed to do certain work.	0.4
Service Orientation	Actively looking for ways to help people.	0.4
Programming	Writing computer programs for various purposes.	0.4
Technology Design	Generating or adapting equipment and technology to serve user needs.	0.3
Quality Control Analysis	Evaluating the quality or performance of products, services, or processes.	0.0
Operation Monitoring	Watching gauges, dials, or other indicators to make sure a machine is working properly.	–0.1
Installation	Installing equipment, machines, wiring, or programs to meet specifications.	–0.1
Troubleshooting	Determining what is causing an operating error and deciding what to do about it.	–0.1
Equipment Selection	Determining the kind of tools and equipment needed to do a job.	–0.1
Operation and Control	Controlling operations of equipment or systems.	–0.2
Repairing	Repairing machines or systems, using the needed tools.	–0.2
Equipment Maintenance	Performing routine maintenance and determining when and what kind of maintenance is needed.	–0.2

Sources: O*NET database, release 16.0; May 2010 Occupational Employment Statistics survey. Tabulation produced by the author.

I’ll acknowledge that transferable skills are harder to learn than many job-specific skills such as Excel. You can’t take a four-week course in critical thinking and expect to boost your proficiency from zero to a level that employers want. On the other hand, critical thinking is something we all have been learning since childhood (even though certain benighted politicians are trying to keep it out of the classroom), so nobody starts from a zero level of proficiency.