It is a tragic irony that there are over 3 million open jobs in the U.S. economy today, while over 14 million Americans remain unemployed. Incredibly, a majority of U.S. companies recently surveyed complain that they can’t find qualified people to fill their open roles.
Economists cite several market factors that contribute to this fundamental mismatch of employer needs to applicant skills, but none of them can be quickly reversed. The only effective short-term solution is for companies to stop complaining (and outsourcing) and start training–accept that they themselves need to hire and train partially qualified applicants to become fully qualified, productive employees.
Amidst one of the greatest job crises in recent history, employers are turning away job seekers willing and able to work because they don’t have the exact skills to match their openings. And waiting for those perfect candidates is holding employers back: 52% of organizations recently surveyed by staffing firm ManpowerGroup are having trouble filling positions, and a recent Kauffman Foundation poll of entrepreneurs found that for 40% of those surveyed, “finding qualified people is the biggest obstacle standing in the way of continued growth.”
The recent hiring experience of Cleveland-based Ben Venue Laboratories, which makes drugs for pharmaceutical companies, is a stark example. The New York Times recently reported that the firm reviewed 3,600 job applications this year but found that most candidates lacked appropriate math and communication skills. The company ultimately hired just 47 people for 100 highly coveted manufacturing jobs paying $31,000 a year. With nearly 10% unemployment in the Cleveland area, that’s tragic.
How do we bridge the gap?
In the long term, changes to our national education system could help close this gap. But the fixes currently proposed–improved math and science curriculums, increasing high school vocational training, focused technology skill development to prepare for higher-level and remote work, etc.–will only be effective in improving the talent pool years down the road and, in some cases, decades, from now. For companies that need to successfully compete and grow now, this does no good. They need to help themselves.
As Wharton management professor Peter Cappelli recently wrote in The Wall Street Journal:
Companies need to stop pinning so much of the blame on our nation’s education system. They need to drop the idea of finding perfect candidates and look for people who could do the job with a bit of training and practice.
Con-way Freight of Salt Lake City has put this advice into practice, and gotten its trucking business rolling as a result. In 2010, the company was struggling due to the national shortage of qualified drivers, caused by the combination of a high driver-retirement rate and a high barrier to entry for new, younger drivers (trucking schools charge upwards of $4,000 in tuition for certification training). Recognizing that they couldn’t find and hire qualified people fast enough to meet demand, Con-way Freight took matters into its own hands, starting free driving schools at 75 of its truck yards and guaranteeing a job for anyone who passed the training. This DIY approach to training is paying off. Interviewed by NPR last month, Bob Petrancosta, a vice president at Con-way Freight said, “Over an 18-month period since the effort got started, we have graduated nearly 440 drivers and we have a retention rate of 98 percent.” Their proactive approach allowed the company to fill its jobs and meet customer demand, with the costs of providing free training offset by incremental revenues earned from now operating fully staffed. It’s a formula many businesses would be smart to adopt.
Training for the jobs of the future
The situation is most acute–and the proposed fix most imperative–in filling jobs that didn’t exist until recently. It’s impossible for businesses to blame the education system for not providing workers that are qualified to work in fields like hybrid car design and manufacture, alternative energy, etc. For example, there are 2.3 million open jobs in renewable energy worldwide, according to The United Nations Environment Program.
Again, the short-term answer for these emerging industries with a shallow talent pools is employer-based training. If these employers targeted workers from adjacent industries, they would very likely find that the time and cost of getting new hires up to peak productivity generated a high and fast ROI. It’s a change in how we approach and retrain the core set of skills that already exist: The solar industry could be retraining Detroit autoworkers to manufacture solar panels instead of panel trucks, and car salesmen could be retrained to sell residential solar installations instead of convertibles.
The bottom line
With technology and industries shifting so quickly, our economy’s open positions aren’t necessarily a perfect fit for our unemployed workers. Rather than simply wishing that mismatch away, businesses need to embrace training to reduce it.
Business leaders may complain that training is too expensive or often doesn’t work. But the real cost of operating with unfilled vacancies is lower revenue and slower growth. And by leveraging new training technologies, employers have new opportunities to make training more effective and cost-efficient than ever before.