Skills Gap 2: Outsourcing - HRExaminer

What happens when a department is outsourced?

Skills Gap 2: Outsourcing

Outsourcing almost always creates the perception of skills gaps.

Like the hiring paradox we covered in the first installment of this series, some of what is experienced as a gap is really a matter of perspective. In a world dominated by gut hunches, perception is reality. The reason we want to dig a little deeper is that when you solve a problem of perception as if it were a problem of supply, the wrong decisions get made.

An abundance of resumes from unqualified or under qualified people always creates the sense that the market is producing badly. It’s a symptom of too much information that can be solved with filtering. It’s one of the untold side effects of the proliferation of job boards and how easy it is to apply for jobs.

(Somewhere down the road, we’ll make the case for making job application processes harder. One of the next frontiers of the Candidate Experience story will be demanding rigor from the application process.)

It’s easy to become immune to stories about layoffs and outsourcing. The numbers are delivered like a drumbeat. They are responsible for a net drop in the national labor participation rate. They seem to happen nationally unless they happen to you.

The truth is that outsourcing is precisely a local phenomenon. Layoffs and downsizings happen in this particular plant in this particular town. The abstract national statistics are just another way of disassociating.

What happens when a department is outsourced?

First of all, let’s get the real context.

80% of the American workforce lives in cities like Sioux City, Iowa. The town has two major industry ecosystems and the services infrastructure (retail, hospitality, health care, government and education). Generally speaking, workers spend their careers in one of the three systems. Virtually no one leaves.

The 10, 20, 50, 100 jobs that used to exist simply go away one day. The people who held those jobs have to find work. Each and everyone of them will want to stay in the neighborhood and make at least the same money. No one leaves the layoff room intending to march right out and get a job that pays less.

That means that the labor market is flooded with resumes from people who are not qualified to do the work after each and every layoff. Hiring managers and recruiters experience the increase in non-qualified resumes as a dilution of the pool.

In a nutshell, a layoff always makes it seem like the labor market has gone to hell for the people trying to build teams.

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