The Hiring Paradox (Skills Gap 1)
It’s much harder to hire people when there is a glut of talent. That’s one of the fundamental reasons that measures like ‘Time to Hire’ are so flawed. Hiring mirrors the economic environment. The hiring process speeds up when the economy is doing well, it slows with the financial environment.
This paradox (I would have bet that the opposite is true) is one of a slew of interesting insights offered by Peter Capelli in “Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It“. It simply takes more time to choose between alternatives when their are more alternatives. When the supply of anything is abundant, the biggest symptoms are often complaints about shortages
Representing the MBA consulting perspective, Capelli believes that employers are to blame for their hiring problems. This view was echoed recently by Paul Krugman and Adam Davidson in the pages of the New York Times. All three rightly note that skills shortages should be accompanied by dramatic increases in wages.
That’s not happening.
Capelli, Krugman and Davidson all point to employers who want to find high skilled workers who are willing to work for low wages. They make the correct case that underpaying is not the same as a skills shortage. Capelli goes further in his critique and recommends older hiring methods that included training.
These are simplistic views of the labor market from folks who think that everyone lives in a big city and that the education system is irredeemably bankrupt. The reality is a good deal more complex. Skills shortages have all sorts of causes.
There is some merit to the idea that the trendy focus on bottom line results has come at the expense of human capital. Training programs that were once mandatory have become as scarce as hen’s teeth. But, the view ignores all sorts of variables from rapidly shifting markets to the relentless logarithmic technology explosion.
Jobs are not what they once were and a return to a better time with better employee development policies is as useful as any nostalgia trip.
The spectrum of skills gaps ranges from low ball compensation and misperceptions of the market to honest to goodness actual shortages of people. Separating the wheat from the chaff on this one requires a thoughtful look at the issues facing your company in the places that your company does business.
Recruiting rule number 1 is that you can always solve your skills shortages with enough money. At that point, it becomes someone else’s problem. Growth in that arena is only possible with an investment of some sort. The question is “Who makes it?”
For a generation, the career coaches of the world have been busy telling job hunters that the investment responsibility is theirs, that companies are no longer paying for real skills development. Most employees understand that their livelihood is contingent on staying current.
So, where does the problem come from?
There are a stack of explanations and the answer is a case dependent combination of them. They are:
- The problem is caused by off shoring and outsourcing
- The education system has failed to keep pace
- Employers don’t know how to hire, manage and develop their people
- The problem is entirely regional
- The technology explosion changes work faster than we can keep up with it
- Actual shortages
Over the next week or so, we’ll dig into the question.
- Skills Don’t Pay the Bills by Adam Davidson
- The Fake Skills Shortage by Paul Krugman
- Unemployment is Up. Why Is It So Hard To Find The Right Hires? by Leigh Buchanan (Inc Magazine review of Capelli)
- If There’s A Gap, Blame It On The Employer by Peter Capelli
- Government and Industry Must Invest by Elaine Chao (The Secretary of Labor offers somewhat predictable advice)
Read the series