Even with unemployment hovering around 9%,
companies are grousing that they can't find skilled workers, and filling a job
can take months of hunting.
Employers are quick to lay blame. Schools aren't
giving kids the right kind of training. The government isn't letting in enough
high-skill immigrants. The list goes on and on.
But I believe that the real culprits are the
employers themselves.
With an abundance of workers to choose from,
employers are demanding more of job candidates than ever before. They want
prospective workers to be able to fill a role right away, without any training
or ramp-up time.
In other words, to get a job, you have to have that
job already. It's
a Catch-22 situation for workers—and it's hurting companies and the economy.
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.
There are plenty of ways to get workers up to
speed without investing too much time and money, such as putting new employees
on extended probationary periods and relying more on internal hires, who know
the ropes better than outsiders would.
It's a fundamental change from business as usual.
But the way we're doing things now just isn't working.
The Big Myths
The perceptions about a lack of skilled workers
are pervasive. The staffing company ManpowerGroup, for instance, reports that
52% of U.S.
employers surveyed say they have difficulty filling positions because of talent
shortages.
But the problem is an illusion.
Some of the complaints about skill shortages boil
down to the fact that employers can't get candidates to accept jobs at the
wages offered. That's an affordability problem, not a skill shortage. A real shortage means not being able
to find appropriate candidates at market-clearing wages. We wouldn't say there
is a shortage of diamonds when they are incredibly expensive; we can buy all we
want at the prevailing prices.
The real problem, then, is more appropriately an
inflexibility problem. Finding candidates to fit jobs is not like finding
pistons to fit engines, where the requirements are precise and can't be varied.
Jobs can be organized in many different ways so that candidates who have very
different credentials can do them successfully.
Only about 10% of the people in IT jobs during
the Silicon Valley tech boom of the 1990s, for
example, had IT-related degrees. While it might be great to have a Ph.D.
graduate read your electrical meter, almost anyone with a little training could
do the job pretty well.
A Training Shortage
And make no mistake: 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. Despite employers' complaints about the education system,
college students are pursuing more vocationally oriented course work than ever
before, with degrees in highly specialized fields like pharmaceutical marketing
and retail logistics.
Unfortunately, American companies don't seem to
do training anymore. Data are hard to come by, but we know that apprenticeship
programs have largely disappeared, along with management-training programs. And
the amount of training that the average new hire gets in the first year or so
could be measured in hours and counted on the fingers of one hand. Much of that
includes what vendors do when they bring in new equipment: "Here's how to
work this copier."
The shortage of opportunities to learn on the job
helps explain the phenomenon of people queueing up for unpaid internships, in
some cases even paying to
get access to a situation where they can work free to get access to valuable
on-the-job experience.
Companies in other countries do things
differently. In Europe, for instance, training
is often mandated, and apprenticeships and other programs that help provide
work experience are part of the infrastructure.
The result: European countries aren't having
skill-shortage complaints at the same level as in the U.S., and the nations that have the most
established apprenticeship programs—the Scandinavian nations, Germany and Switzerland—have low unemployment.
Employers here at home rightly point to a
significant constraint that they face in training workers: They train them and
make the investment, but then someone else offers them more money and hires
them away.
The Way Forward
That is a real problem. What's the answer?
We aren't going to get European-style
apprenticeships in the U.S.
They require too much cooperation among employers and bigger investments in
infrastructure than any government entity is willing to provide. We're also not
going to go back to the lifetime-employment models that made years-long
training programs possible.
But I'm also convinced that some of the problem
we're up against is simply a failure of imagination. Here are three ways in
which employees can get the skills they need without the employer having to
invest in a lot of upfront training.
Work with education providers: If job candidates don't have
the skills you need, make them go to school before you hire them.
Community colleges in many states, especially North Carolina, have
proved to be good partners with employers by tailoring very applied course work
to the specific needs of the employer. Candidates qualify to be hired once they
complete the courses—which they pay for themselves, at least in part. For
instance, a manufacturer might require that prospective job candidates first
pass a course on quality control or using certain machine tools.
Going back to school isn't just for new hires,
either; it also works for internal candidates. In this setup, the employer pays
the tuition costs through tuition reimbursement. But the employees make the
bigger investment by spending their own time, almost always off work, learning
the material.
Bring back aspects of apprenticeship: In this arrangement,
apprentices are paid less while they are mastering their craft—so employers
aren't paying for training and a
big salary at the same time. Accounting firms, law firms and
professional-services firms have long operated this way, and have made lots of
money off their young associates.
Of course, a full apprenticeship model—with
testing and credentials associated with different stages of experience—wouldn't
work in all industries. But a simpler setup would: Companies could give their
new workers a longer probationary period—with lower pay—until they get up to
speed on the requirements of the job.
Promote from within: Employees have useful knowledge
that no outsider could have and should make great candidates for filling jobs
higher up. In recent years, however, an incredible two-thirds of all vacancies,
even in large companies, have been filled by hiring from the outside, according
to data from Taleo Corp., a talent-management company. That figure has dropped
somewhat lately because of market conditions. But a generation ago, the number
was close to 10%, as internal promotions and transfers were used to fill
virtually all positions.
These days, many companies simply don't believe
their own workers have the necessary skills to take on new roles. But, once
again, many workers could step
into those jobs with a bit of training.
And there's one on-the-job education strategy
that doesn't cost companies a dime: Organize work so that employees are given
projects that help them learn new skills. For example, a marketing manager may
not know how to compute the return on marketing programs but might learn that
skill while working on a team project with colleagues from the finance
department.
Pursuing options like these vastly expands the
supply of talent that employers can tap, making it both cheaper and easier to
fill jobs. Of course, it's also much better for society. It helps build the
supply of human capital in the economy, as well as opening the pathway for more
people to get jobs.
It's an important instance where company
self-interest and societal interest just happen to coincide.
Dr. Cappelli is the George W. Taylor professor of
management at the University of Pennsylvania's Wharton School
and director of Wharton's Center for Human Resources. He can be reached at reports@wsj.com.
