The Hidden Job Market is Alive, But the Skills Gap Is As Well

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Last week I wrote about matching the number of job openings to the number of unemployed people by industry.

The numbers were arresting. I used data from the Economic Policy Institute’s Heidi Shierholz.

In her article, Unemployed Workers Still Far Outnumber Job Openings in Every Major Sector, Shierholz provided this graph showing the Job-Seekers ratio from December 2000 through April 2013 based on data from the BLS Job Openings and Labor Turnover Survey (JOLTS) and Current Population Survey:not-enough-jobs-to-go-around-june-2013

Finding the hidden job market

This is an incredible view of the last 13 years. The Jobs-to-Seekers ratio in December 2000 was 1 to 1.1 — pretty much full employment. The unemployment rate that month was 3.9 percent, which means that even people who didn’t want to work were working.

As I read the data, though, it looks a little odd. The CPS (Current Population Survey) and the JOLTS Survey together show that in April while there were 3,737,000 reported job openings, 4,425,000 workers were hired and 4,279,000 workers were separated for a net employment increase of 146,000.

This means that 688,000 more workers were hired than there were job openings. Even if these April hires were from the March job openings (3,875,000), there were still 550,000 more hires than openings.

So the hidden job market must be alive and well if we’re hiring more than half-a-million more workers than there are reported openings.

The skills gap? Maybe it’s real

Think about that. And think about the reported skills shortages. And think about the difference between structural and cyclical unemployment (which I wrote about here).

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The reason our unemployment rate continues to stay at an unacceptable and economy-stopping 7 percent plus may not be so related to the lack of new job creation – we appear to be filling more than the reported number of job openings every month! – but to the scarcity of specific skills and talent. So maybe the skills gap is real and the 9 million plus workers who are unemployed will stay that way until they acquire new skills or further lower their job targets.

Either way, that’s not good news for employers with openings they can’t fill, workers who can’t find jobs for the skills they have, or our economy which can’t get out of second gear.

The hidden job market is very much alive. Too bad that’s not good news.

This originally appeared on China Gorman’s blog at ChinaGorman.com

China Gorman is a successful global business executive in the competitive Human Capital Management (HCM) sector. She is a sought-after consultant, speaker and writer bringing the CEO perspective to the challenges of building cultures of humanity for top performance and innovation, and strengthening the business impact of Human Resources.

Well known for her tenure as CEO of the Great Place to Work Institute, COO and interim CEO of the Society for Human Resource Management (SHRM), and President of Lee Hecht Harrison, China works with HCM organizations all over the world to enhance their brands and their go-to-market strategies. Additionally, she serves on the Executive Committee of the Board of Jobs for America’s Graduates as well as the Advisory Boards of Elevated Careers, the Workforce Institute at Kronos, and WorldBlu. Addtionally, she chairs the Globoforce WorkHuman Advisory Board and the Universum North America Board. China is the author of the popular blog Data Point Tuesday, and is published and frequently quoted in media properties like Fortune, TLNT, Huffington Post, Inc., Fast Company, U.S. News & World Report and many others.

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3 Comments on “The Hidden Job Market is Alive, But the Skills Gap Is As Well

  1. Your numbers are flawed. Anything the government tells us is a lie, at least totally wrong. They do not know how many jobs there are nor how many people are unemployed. But even if we take your numbers, showing a hidden job market. It is hidden because the government numbers are bogus. Your point that the skills gap is true is mistaken or at least not all that big. Read “Why Good People Cannot Get Jobs”: and what companies can do about it.” In it the author says that it is mostly the companies’ faults for not hiring. They expect too much. I would add they do not know what they actually need. Almost every high tech job out there requires 3-5 years experience, so how does someone with a recent college get these jobs. Even an internship will not give you 3-5 years. Also, read “Peopleware” about software teams and productivity. It compared those programmers with 2 years vs 10+ years and found the same results. I know that most of what you learn about a job will be learned in the 6 months to a year. In other words, experience is overrated.

  2. Great points, especially about the part about the skills shortages. We need to start ingraining both soft skills and measurable/quantifiable skills into professionals at a younger age so there won’t be a scarcity of them. When we do so, no matter how high the unemployment rate is, most professionals will be able to use these skills to land jobs, start their own businesses, invest in ideas, and be more well-rounded individuals.

    1. Soft skills, and also job-searching skills are hugely important and assets that will be with you for a long time. Totally agree these need to be taught to more professionals, and soon-to-be professionals!

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