Weekly Wrap: Survey Says Shortage of Skilled Workers Not That Bad

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You know that shortage of skilled workers you keep hearing about?

Yes, I’m talking about what we keep getting from companies that say they can’t find people to fill open positions despite 8 percent national unemployment and millions who say they keep looking but can’t get hired — THAT shortage of skilled workers.

Lots of people who watch and analyze this kind of stuff — including people like Dr. Peter Cappelli, who called the notion of worker shortages “an illusion” — have questioned whether we really have a shortage of talent or if it is really just something else, like a lack of investment in training and development by all-too-many businesses.

That’s why this recent study by the Boston Consulting Group and reported in USA Today resonates with a lot of people, because it says that, “manufacturers may have openings they can’t fill, but it’s not because workers aren’t out there. It’s because companies are being too selective about who they hire and are unwilling to pay a competitive wage.”

Only a “mild” skills gap

In other words, maybe we don’t have all that much of a skilled worker shortage, as least in the manufacturing sector, as we thought we did. Excuse me if I don’t seem terribly surprised by that.

Here’s more from the USA Today story:

The report acknowledges a mild skills gap. U.S. manufacturers could use an additional 80,000 to 100,000 highly skilled employees — less than 1 percent of all factory workers and less than 8 percent of highly skilled workers, the study says. Workers in highest demand are welders, machinists and mechanics.

But that’s far less than the deficit of 600,000 skilled workers cited in a survey last summer by Deloitte and the Manufacturing Institute.

“There’s a relatively small skills gap that can be managed,” says BCG senior partner Hal Sirkin.

The study identifies only seven states with significant or severe worker shortages — Alabama, Alaska, Hawaii, Montana, New Mexico, Nevada, and Wyoming. Most have small manufacturing bases, so new manufacturers must draw from sparse worker pools, Sirkin says. Only five of the 50 largest manufacturing centers — Baton Rouge, Charlotte, Miami, San Antonio and Wichita — are seeing a major shortage, the study says.

It says 58 percent of high-skill manufacturing and engineering jobs remain open at least three to six months. But Sirkin says that’s partly because employers are not committed enough to hiring the workers.”

A lack of training by employers

What’s also interesting about this Boston Consulting Group study is that it validates the observation Peter Cappelli made about the real problem right now being the lack of investment in training and development by businesses. As he said in October 2011, “There are plenty of people out there who could step into jobs with just a bit of training — even recent graduates who don’t have much job experience… Unfortunately, American companies don’t seem to do training anymore.”

The BCG’s Hal Sirkin echoes Dr. Cappelli’s point, telling USA Today that:

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Companies have sharply cut back training of entry-level workers. A skills gap, he says, doesn’t exist if manufacturers can train young workers with solid math skills to run computer-controlled machines within a few months.

Rather, he says, manufacturers retrenched in the recession. They’re producing more with fewer workers who are earning less, and doing little training after chopping human resource budgets. While they could use more skilled workers, they won’t bust their budgets to get them and can do without them, Sirkin says.

The study warns there could be a severe shortage by 2020 as Baby Boomers retire and manufacturers bring more production to the U.S. from overseas — if training programs aren’t expanded.”

A failure to invest in training and talent

There’s lots of talk about all the American manufacturing jobs lost to low wage environments in Southeast Asia and elsewhere, and a lot of people are rightly concerned about that because U.S. companies should be able to compete in the manufacturing sector, at least on some level, given the higher quality of products we produce here.

But, the U.S. can’t compete in the manufacturing sector if American companies fail to invest in the training and development needed to bring workers along so that they can produce those higher quality products. And honestly, the Boston Consulting Group study doesn’t come as any great shock because it’s pretty well known and documented that U.S. businesses have scrimped on spending on talent and training since the Great Recession kicked in.

This BCG study should be a wake-up call for American businesses, but why am I not convinced that will be the case? I think Peter Cappelli hit it on the head when he said last October that, “To get America’s job engine revving again, 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.”

He was right about that then, and if anything, he’s even more spot on in his assessment now.

Would you promote this guy?

Of course, there’s a lot more than the lack of investment in worker training in the news this week. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.

  • Age discrimination lawsuit at the Cincinnati EnquirerThis is surely a sign of the times, but age discrimination lawsuits are on the rise these days, including this one filed against the Cincinnati Enquirer by eight newsroom employees and reported in the independent Gannett Blog. (Full disclosure: I worked as an editor for Gannett in Montana and Hawaii in the 1990s). The blog post says that, ” The details about (former Metro Editor Joe) Fenton, a 14-year Enquirer employee, are especially interesting. In fall 2010, the complaint says, Fenton’s annual performance review was delayed eight weeks during a change in top editors at the paper. In mid-November, his supervisor Julie Engebrecht “suddenly informed Fenton that his performance was unsatisfactory.” In the same conversation, however, she acknowledged that he was a “great editor,” the suit says.”
  • The struggles of low-wage workers. It’s still a tough economy for a lot of workers, especially for those on the low-end of the wage scale, as Cindy Krischer Goodman writes in The Miami Herald. “As businesses have struggled to stay afloat, low-wage workers increasingly have endured the consequences. Many have had their hours cut and sometimes are even forced to work off the clock. Others have been stiffed out of pay when businesses abruptly closed. And, some have been subjected to bosses who fire them for taking a day off to care for a sick child or family member. “If you’re a low-wage worker, the deck is stacked against you,” says Noah Warman, a labor lawyer with Sugarman & Susskind in Coral Gables. “Employers want your muscle, not your brain, and you become a cost of doing business. If a business needs to cut corners, this is where they do it.”
  • Would you want to promote this guy? You would think that an open Internal Affairs investigation over allegations of “inappropriate behavior with a female civilian subordinate,” and three lawsuits for physical abuse settled for a total of $109,500, would keep a Philadelphia police inspector from being promoted — but you would be wrong. The Philadelphia Daily News reports on the case of Carl Holmes, and how he is just “the latest in a string of high-ranking Philadelphia police officials who have managed to move up through the ranks despite being the subject of numerous troubling accusations.”

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.


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