The Great Debate: Do We Have a Talent Shortage or a Talent Transformation?

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There have been ongoing debates for a decade or more over whether or not there is a talent shortage.

If there was a real talent shortage, we would have seen much different corporate behavior than we actually do see. If firms genuinely could not find the people they needed, they would have either raised wages to the point that the jobs became highly attractive, or, they would have invested significantly in training.

Neither has happened.

While I have no hard data, my experience (and that of colleagues) seem to agree that there has actually been a cut back in technical training and in internships (that are often used as a way to train or provide experience to younger potential workers.) Salaries are a great predictor of desire and demand, but no one has recorded a large increase in pay for STEM graduates or experienced help.

The supply has obviously been adequate to meet the demands of most organizations.

Yes, in some cases people are working more than they used to because there are staff shortages. But again, these are economic decisions and not supply issues. It really is not quantity that is important, but quality, and the ability of the fewer engineers and scientists who are working to leverage automation and computers to make themselves more productive.

There are many non-practicing engineers in the workforce who have chosen not to be engineers because they can earn more money doing other things. Many scientists eschew corporate life and choose academic life instead. Technicians have become scarce because potential workers realize that the jobs they do are not well paid and they work long hours, sometimes in harsh conditions, with little gratitude.

The New Economy — from hardware to software

What has been happening is a transformation of the workplace. We are shifting from a world where the glory was in hardware  — making, building, and inventing machines and tools  — to one of design and software.

Most firms in the United States and Europe do not make anything directly. They have innovation and design centers, neither of which need or use large numbers of engineers, scientists, or technologists. Apple prints on the back of every iPhone, “Designed by Apple in California. Assembled in China.”

Apple and other firms depend on a rather eclectic group of talent  — people who make up a large portion of what Richard Florida has called the “Creative Class.” These are writers, designers, artists, anthropologists, software programmers, and the like. Silicon Valley is full of these folks.

I belong to group of them called NextNow which is a global network of a few hundred people who are mostly what would be called bohemians. One invented Hypertext, another the term e-learning. Some do research, some write books or make movies, some have a technical background, but it’s not how they earn a living.

Many of these people do not have a college education and are self-taught or they apprenticed with a master or studied something very different from what they do.

The New Worker

The manufacturing portion of work is done more and more by automated tools and software or by robots. It does require engineers and technicians to build these, but far fewer than in the old economy. And, they are aided by all kinds of automation.

For example, architects can work essentially alone these days. Yet, Frank Lloyd Wright had scores of draftsmen drawing plans and clerks and technicians reproducing blueprints as well as apprentices. Today a CAD machine, coupled to building code information and material specifications, does it all. Similar reductions have occurred in almost every field from civil engineering to the semiconductor industry.

Automation has supplemented engineers, reducing the need for them and driving efficiency. Automation is entering the hospital, the surgery, and even the school with the advent of MOOCs that allow education to be distributed from one professor to thousands.

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The new economy growing around us needs and uses a very different type of worker. The new generation of worker has a broader base of skills and knowledge than any previous generation.

It is true that many of them will not have gained this by traditional education (after all, around 66 percent of men who start at a university never finish with a degree.) They will have learned most of it by themselves through the Internet, from television, from travel and social media. They are experimenting, being entrepreneurial, and exploring more than most other generations.

Corporations are not their natural home nor is corporate life their natural lifestyle. They are more likely to pursue self-employment or work for a small firm where the atmosphere is collaborative and there is open communication.

A few larger firms, such as Google and Zappos, are willing to hire people with no degrees but with passion, interest, and life experience. They invest in mentor-based training. They put them into situations where they are forced to learn rapidly. They have large portions of the workforce who have chosen to work as temporary staff or on a contract.

What about that talent shortage?

So, talent shortage or not?

Absolutely not! We have an abundance of talent – wonderful, creative and entrepreneurial folks who are already using their skills to create a new world.

We need to stop thinking about yesterday’s work world and imagine tomorrow’s. We will not need thousands and thousands of engineers, scientists, and technicians.

Most of these young people will do amazing things – like invent more companies like Facebook, Google, Amazon, and Zappos. They will work often in partnership with a robot or a piece of automated software. Our economy has already moved in this way with more of the GDP coming from services than from manufacturing.

Encouraging thousands of young people to pursue a STEM degree, when their hearts are leading them elsewhere, is a tragedy.

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at


18 Comments on “The Great Debate: Do We Have a Talent Shortage or a Talent Transformation?

  1. Kevin…

    What we have is a real shortage of recruiters, hiring managers and executive leaders who are so clueless about identifying, engaging, recruiting, and developing talent – thus is the biggest gap in “professional” HR…and it’s widening every year.

    In recruiting we see it daily as recruiters claim social recruiting expertise because they’re sending out LinkedIn inMails with the word “love” in every sentence (OK, a like hyperbole here) and then they complain because no one gets back to them – and the hiring managers are unimpressed – that there’s a shortage, when in fact pipelining takes time to strategize and build into a flowing talent spigot.

    But who has time when there’s are fire breathing hiring managers and HR leaders (who talk good games about recruiting) ready to hire someone else to support them?

    Hiring Managers want people with “12 out of 10” skills and frankly are blind the their nonexistence as well as the desirability to work at the company – which in many cases is as ubiquitous as there next company out there. Of course there’s the sense of personal superiority (“only an imbecile wouldn’t want to work for ME!”) as well as the fact that the best person lives elsewhere and would love to work for the company if they could telecommute and visit HQ once a month for a few days (sorry – corporate HR command and control policies strictly prohibit this).

    I could continue but I’m sure you see the picture …

    The problem Kevin is not shortage but inflexibility, impatience, and frankly a molten hot lack of intelligence. Inflexibility to the location of employees – especially with all the available collaboration tools – is simply absurd and highlights poor managerial capabilities. Impatience with identifying and securing talent is simply absurd because planning for talent issues should be as much a part of org building as securing capital – and we know how long it takes to secure funding; I simply can’t call a leader a leader if they don’t plan for and understand what is required – for recruiting. Finally, it’s a lack of intelligence (fine, I’ll use “knowledge” instead but it ruins the alliteration) about what engages and attracts talent to situations (notice the word I used) that differentiates the average or worse recruiter, HR professional, hiring manager, and executive leader from those who are superior at planning for and leading talent initiatives. To these people, talent scouting isn’t littered with roadblocks but is in fact an ever changing puzzle.

    Roadblocks are excuses and lead to the belief that there are shortages; pieces of a puzzle lead to critical thinking and recruiting solutions.

    Great article Kevin… ttys

    1. A lack of critical thinking is one of the biggest afflictions affecting corporate America today – both in the leadership and in those led. The inability to question – or, more precisely the reluctance to question – is hobbling progress everywhere.

      1. Why would recruiters, generalists and hiring managers question things when their innate ESP skills are so vastly superior?

    2. ” … a molten hot lack of intelligence.” Lol!

      I’m afraid I agree with much of what you’ve said, Steve.

      Maureen, I also agree with you about critical thinking.

  2. Steve – completely concur. So sick of hearing about the war for and shortage of talent when the above conditions persist. Just curious: does anyone know of a way that the perpetrators of these issues can be rounded up and persuaded to leap into a molten hot pit so there could a just a bit more room for those that prefer critical thinking and common-(business) sense? ~KB @TalentTalks:disqus

  3. Agree with you Kevin. There is no shortage of talent. Companies have jobs open and go months without filling them. If they really had to be filled companies would be hiring — paying more to candidates, training the best candidate that has 10 or 12 required skills, etc.

    I think in a way companies are CYA with openings to give the appearance of having jobs in the U.S. The real hiring frenzy is going on overseas with these companies. One executive (forget which company) said “We ARE hiring employees — just not in the U.S.” That was when they were getting an earful on why companies aren’t being good citizens and why aren’t they hiring people with all the cash they have sitting around.

    I will pose an idea to counter your point that the U.S. has moved from a hardware to software workplace. Yes we have — but some folks think it is to our detriment. Read:

    Experts say that by outsourcing mfg we have given up institutional knowledge of operations that we actually need to innovate. Anyway read the article. The authors are not alone in their thinking,

    No we don’t need to encourage a whole lot of kids to go the STEM route. Software/knowledge work does not create a lot of jobs. Knowledge workers create ideas/designs — they don’t create products ergo not so many jobs created. We don’t need another million engineers.

    The CEO of Manpower has said they have hundreds of job openings for techs, skilled craftsmen, etc. that go begging. Can’t get enough people to fill them. For every engineer opening they have 10+ people apply.

    So I think we are looking at some hype:
    1) there is no shortage of talent
    2) companies float openings partly to CYA — no company wants to stand out as “not hiring in the U.S.” It is a sensitive subject these days.

    3) outsourcing mfg hurts companies on innovation — it cuts cost but sacrifices institutional knowledge for innovation

    4) knowledge work does not create lots of jobs
    5) STEM is overrated

    My 2 cents

    1. Thanks, Jacque. Well said and I agree. I don’t deny that there is learning from building/manufacturing products. It is not about whether or not we should do it. It’s, to your point and mine, about how MANY we really need. We are obsessing over STEM and I am not really sure what the real motivations are for this.

      1. Kevin —-Personally I think that the reason is to continue the American dream — the belief that if every kid goes to college and becomes he/she will have a good career/life. And in addition will have a life better than his/her parents. It continues to feed that belief. And it is being hyped so people will feel good. That’s one reason why I think there not very many REAL job openings —- kind of a smoke screen. (I’m not a conspiracy theorist — just being realistic.)

        Think what the reaction would be if we told people: 1) We probably will never hire engineers in the numbers we have before because they are being hired overseas because that’s where the markets/action is — we are a mature market and fact is we’re likely to stay that way 2) we are services economy now — which by its nature doesn’t need as many engineers 3) kids need to start businesses on their own and insure their own security 4) oh by the way the bulk of the jobs are/will be in the non-tradeable sector (jobs that have to be in the U.S. — nurses, waitstaff, maids, mechanics, etc. —- many of which don’t require college degrees and are lower paid.

        And oh by the way —- we won’t need/have millions of entrepreneurs because many will fail and the rest if successful won’t be hiring thousands of people.

        My concern is we are losing our ability to innovate by outsourcing stuff we THINK we don’t need in the U.S. just to save a few bucks. It is a myth that as long as we keep R&D here we won’t lose the “family jewels”. Wrong!

        And Kevin I disagree on one point —- the main reason for mfg employees not as many as used to be (your example of GE) is not because everything is automated —- (It’s a myth that automation is a HUGE reason why there’s no jobs) —- it’s because of outsourcing. No one wants to admit it — certainly not business.You and I both know that semiconductor mfg has been outsourced for 25 years or so. Long before mfg chips in the U.S. was automated enough to kill large numbers of jobs.

        I’m not being pessimistic — just wish we could be realistic about this.

      2. My guess as to motivations (speaking as someone who taught high school)…

        A bunch of research colleges, companies, meddlers and do-gooders waved lotsa cash under the nose of the guvmint and bingo- STEM!

        I have begun to advocate a return to the “classical canon” of education- strong reading, arithmetic, foundational science, music, art, and history. I’d add in some computer skills because you need them.

        This comes at a time when people are seriously re-considering the value of college and whether it’s priced itself into oblivion, student debt, and so forth. This is just another way public education under-serves the youth of this country. With a well-rounded, thoughtful (read: pre-WW II style) high school education, we could return to the apprenticeships and have well-educated kids that have the creativity we need along with the advantage of being young enough to be trained easily and well.

  4. Here is the article’s (below link) main premise:

    “The prevailing view of the past 25 years has been that the U.S. can thrive
    as a center of innovation and leave the manufacturing of the products it
    invents and designs to others. Nothing could be further from the truth.

    This logic is predicated on utterly false assumptions about the divisibility
    of R&D and manufacturing and basic competitive dynamics.

    In many cases, R&D and manufacturing are tightly intertwined. Unless you
    know how to manufacture a product, you often cannot design it. And, to
    understand how to manufacture it, you have to have manufacturing competencies
    and experience. The notion that you can design a product in the serene world of
    the R&D laboratory without any knowledge of the rough and tumble world of
    production is ridiculous.

    To innovate, you need great two-way feedback. You need to transfer knowledge
    from R&D into production, but you also need to move knowledge from
    production back to R&D. The act of production creates knowledge about the
    process and the product design.”

    So outsourcing mfg prevents future innovation.

    1. This is exactly what I’ve been trying to say to people for a long time. Thank you, Jacque, for summing it up so nicely.

  5. A few interesting points, but the overarching premise that the economy can be built primarily by a “creative class” because, among other reasons, all design and manufacturing tasks can be automated anyway, are completely baseless (BTW, what is a CAD *machine*?)

    No doubt that media darlings Facebook, Google, Amazon, and Zappos, which are also the aspiration and the model for many young workers, play an important role in innovation and disrupting stale business models. But their contribution to employment and to the GDP is still not that significant. In comparison, the automotive industry employs 1.6% of the US workforce and produces 2.3% of the GDP. See a chart here:

    1. Joe,

      Two points I’d like to make.

      1. GDP of services in the U.S. is about 64% of the total, while manufacturing is about 31% and shrinking. Manufacturing is a declining activity.

      2. I did not say that manufacturing or that engineering were not important, My point is that fewer engineers and technical people are needed to do what needs to be done because of automation and to a small degree outsourcing. For example, in 1960 GM employed over 600,000 people to build 2 million vehicles. Today is has 200,000 building 9 million! And all of that is due to robots and automation.

      Our economy is a service economy and it needs workers of all types but more and more those with liberal arts and broader skill sets. There is also a growing class of entrepreneurial workers who self-learn whatever they need to (including engineering and other technical skills) to do whatever they want to do. They do not need a technical college education to do this. What they need is curiosity, general knowledge, and the ability to learn fast.

      1. @ Kevin. Of course our economy is predominantly a services economy. You are also correct in pointing out the efficiencies gained through automation (which is why the growth in the economy is not reflected in the level of unemployment). Nonetheless, these improvements did not come thanks to liberal arts college dropouts.

        I also agree with your point about the need for a diverse set of skills, open mind and creativity. I disagree, however, with dismissing STEM education under that false premise that it’s all automated anyway. We need a blend of product and services industries that will allow the US economy to expand and be sustainably competitive.

  6. I concur with Steve: “is not shortage but inflexibility, impatience, and frankly a molten hot lack of intelligence.”

  7. Seminal post which really has one thinking. I concur the “war for talent” is less a supply issue and more an issue of ‘Employability’….. the lack of Industry readiness of Talent… I also agree with Steve that the problem in part is much to do with apathetic, indifferent approach of the hiring community at large….. Please also Read …

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