photo credit: adi-levinshtein-generations on With large portions of our workforce under utilized, demoralized or simply out of work, it strains credulity to say that we are suffering talent shortages.

photo credit: adi-levinshtein-generations on
With large portions of our workforce under utilized, demoralized or simply out of work, it strains credulity to say that we are suffering talent shortages.

Way back in the mid 90s, I noticed that there was a potential crisis. When the ‘older generation’ moved on, there wouldn’t be enough of the ‘younger generation’ to fill the holes. I kicked that dead horse until my shoes wore out. Then, I bought new shoes and started kicking the horse all over again.

McKinsey picked up on the topic during the dot come surge. They called it the “War for Talent”. An industry was born.

Today, lots of people are tossing the idea around. The War for Talent is called that today because no one has developed a better way of describing the problem. As it is with many problems that are good for driving consulting revenue, there is little agreement on what the war is, who is fighting it, whether they are winning and where the prisoners of war are held.

With large portions of our workforce under utilized, demoralized or simply out of work, it strains credulity to say that we are suffering talent shortages. When viewed from the perspective of the vast treasure of human capital on the planet, talk of talent shortages seems elitist bordering on racist. It’s hard to imagine that the people flying this particular flag would be willing to sit down with the over-40 refugees in Silicon Valley who are ready to work and can’t find a job. They want to work at some of the very places that claim talent shortages.

I’d love the video of the finely coiffed consultant in a navy blue suit telling the pocket protector wearing ex contract coder that she is unfit for work.

But, the high end consulting crowd stays secure and insulated in the boardroom. First class tickets, airport lounges, private jet time and good tailors make it easy to see the employers perspective, And, telling them what they want to hear is the fine art of staying employed. It may even actually look like talent shortages from that rarified perspective.

In a market characterized by scarcity, several things happen. Prices (or wages in this case) rise. Quality specifications decline because in a shortage you harvest what you can get. Rationing happens when shortages get severe. Stealing and grey-market behavior expands.

That’s not happening.

Much of the so-called talent shortage is really a lack of workers who are willing to take a pay cut. That’s why H1B immigrants are so desirable. This legalized form of indentured servitude delivers a worker whose options are restricted and whose compensation is built around the promise of further opportunity.

It turns out that the major symptom of a really large surplus is a complaint about quality. People do not complain about quality in a shortage. They take what they can get.

A recent edition of IEEE’s Spectrum, the magazine of the engineering profession disclosed startling statistics:

“The Georgetown study estimates that nearly two-thirds of the STEM job openings in the United States, or about 180 000 jobs per year, will require bachelor’s degrees. Now, if you apply the Commerce Department’s definition of STEM to the NSF’s annual count of science and engineering bachelor’s degrees, that means about 252 000 STEM graduates emerged in 2009. So even if all the STEM openings were entry-level positions and even if only new STEM bachelor’s holders could compete for them, that still leaves 70 000 graduates unable to get a job in their chosen field.”

So what’s going on.

There are several factors at work

  • Technology is moving faster than workforces can absorb it.
    This means that today’s workforce is out of synch within two or three years. Employers want the technical edge but don’t want to pay for training that has a three year life span.
  • Markets are decaying.
    As technology disrupts major segments of the economy, lots of skills are being discarded. You simply don’t need buggy makers when the automotive industry is cooking along.
  • The downturn is five years old and not getting better.
    People whose houses are still underwater (25%) are not energetic players. They are victims who are suffering from a screwing.
  • Global competition is hard
    After decades of easy pickings, western companies are having to work really hard to make their numbers. It turns out that the monolithic western company is a bad idea. Markets are local.
  • Recruiting is local.
    Only 1% of American employees are interested in moving for their jobs. That means you can’t fix local problems by flying people in. That approach (see global competition) doesn’t work.
  • STEM Jobs Don’t Require STEM Degrees
    “Of the 7.6 million STEM workers counted by the Commerce Department, only 3.3 million possess STEM degrees. Viewed another way, about 15 million U.S. residents hold at least a bachelor’s degree in a STEM discipline, but three-fourths of them—11.4 million—work outside of STEM.”

In other words, there will always be a shortage of competent professionals who are willing to work for less.

The real problem is that we have no meaningful idea about how to harness technology that is moving this fast. It’s so lopsided today that employees routinely poses tools that dwarf those they use at work. No one has figured out the ROI calculation when we are this far along the curve of Moore’s Law.

There isn’t a demographic crisis. There is a big technology absorption problem. Solving the right problem is critical to our long term interests.

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