Positions go unfilled despite pool of available talent, experts say
It¡¯s become a real job trying to figure out today¡¯s job market.
Consider these colliding trends: U.S. businesses increasingly say they can¡¯t find the skilled workers they need, while millions of skilled workers say they can¡¯t find a job.
Drill down on the subject, and you¡¯ll find a myriad reasons for the disconnect.
Employers often argue that advancing technology has left gaps between work demands and the skills most job seekers possess. Critics say corporations have become overly picky and cost-conscious when recruiting.
Columbus resident Darrell Rathburn is one of the many caught up in this whirlwind.
Even though he has a master¡¯s degree in computer science and decades of experience working for Fortune 500 companies, he quit his job search after two years of looking.
“I decided to throw in the towel and accept the fact that I was involuntarily retired,” he said.
In central Ohio, 68 percent of businesses said they couldn¡¯t fill jobs because they couldn¡¯t find people with the right skills or work experience, according to Community Research Partners a nonprofit economic research group in Columbus.
Yet, about 28,000 workers in Franklin County ¡ª many with education, experience and technical skills ¡ª can¡¯t find a job. Nationally, 8.1 million people are unemployed.
Job-seekers are scratching their heads.
Louise Karl holds a doctorate in biotechnology, has years of lab experience and has had research published in prestigious journals. She¡¯s been looking for full-time work for six years.
“There is no skill shortage,” she said. “I probably know 20 people with Ph.D.s in biology, chemistry, et cetera, and none of them can even get an interview.”
Karl might be on to something.
Some employment experts agree that there is no skill shortage. At least not on the scale that many business and trade groups are claiming.
Businesses have created an “artificial” talent shortage with shortsighted employment practices and inefficient use of the existing work force, said Norman Matloff, computer science professor at the University of California-Davis, in testimony to Congress about technology labor shortages.
The underlying driver is money.
“When a business says shortage, they really mean they are finding it difficult to obtain labor at the wage they are accustomed to paying,” said Richard DeKaser, chief economist at National City Bank.
Ohio businesses are definitely “not willing overall to pay for skills that are in short supply,” said Kathlene Tarsitano, general manager of Express Personnel Services, a staffing and recruiting company in Columbus.
About 23 percent of central Ohio employers said they had difficulty filling jobs because of the pay they were offering, according to Community Re- search Partners.
Industry doesn¡¯t apply the “basic laws of supply and demand to salaries,” said Paul Kostek, former president of the Institute of Electrical and Electronic Engineers.
A company that underpays “will sit around and wonder why they can¡¯t find people and say it must be due to a skill shortage,” he said.
Businesses are trying to lure people with perks other than money, said Stacey Jarret Wagner, managing director of the National Association of Manufacturer¡¯s Center for Workforce Success.
“Small manufacturers often can¡¯t pay ¡®big company¡¯ wages,” she said. So they “offer alternatives such as being a great place to work, flexible hiring practices, or access to training.”
Usually those efforts fall flat, especially if companies bank on retirement accounts and health insurance to lure talent, Tarsitano said. “Workers expect companies to offer those things.”
But employers who offer more generous benefits seem to be avoiding skill shortages altogether. Ohio Health, which runs eight hospitals including Grant Medical Center and Riverside Methodist, launched a program in 2002 to pay 100 percent of nursing-school tuition costs for its full- and parttime employees.
“It¡¯s been a great recruiting tool, especially as the cost of college tuition has risen,” said Jon Joffe, Ohio Health¡¯s vice president of human resources.
Even though Ohio had a shortage of 5,000 nurses last year, Ohio Health hasn¡¯t had trouble filling positions.
Attracting skilled workers “boils down to how you treat employees,” Joffe said. Industries that “don¡¯t develop a reputation for treating people well will always struggle to attract the work force it needs.”
Benefits are only part of the equation. Hiring practices also can exacerbate the skills gap.
Many companies are likely to shy away from older workers, even if someone has the skills they are looking for, said Robert Heneman, human resources expert at Ohio State University.
Older workers command higher salaries, and companies fear they will add to the company¡¯s health-care costs, he said.
It¡¯s treading the fine line of age discrimination, which is illegal, yet some workers say age is the only thing standing between them and a job.
“If (an employer) looks at your resume and gets the idea you are over 40, it¡¯s gone,” Karl said.
Businesses also have grown pickier.
“Companies are very rigid in who they are going to hire, and it¡¯s gotten steadily worse,” Tarsitano said.
“They would rather go with nobody than someone with comparable and transferable skills that they could train. They¡¯ve cut their pool of applicants to none.”
Employers are “seeing black and white, and they aren¡¯t making any consideration of an individual¡¯s potential,” she said. “They¡¯re hung up on this vision of the perfect person.”
Being “smart people who can learn” is no longer enough to get you in the door, Kostek said.
Why? Training budgets have been replaced with a “hit-theground-running attitude,” Heneman said.
Companies spend 50 times more recruiting a candidate than they do training them after they¡¯re hired, according to Deloitte Research. Only 37 percent of central Ohio companies provide general skills training beyond an initial orientation.
“It¡¯s the textbook way to manage talent,” Heneman said. “Companies don¡¯t want to pay to give employees skills they can take to another employer.”
But the gap between jobseekers and employers isn¡¯t all the result of human-resource changes.
“The economy has changed structurally” since 2000, DeKaser said.
Globalization and outsourcing have moved more blue- and white-collar work overseas. India and China have upped competition for U.S. businesses. And companies need fewer people to do more work, because of significant increases in productivity from mechanization and technology, said Bill Lafayette, vice president of economic analysis with the Columbus Chamber.
In 1997, the average American worker produced $70,200 worth of work as a share of gross domestic product. In 2005, it was $82,700.
Businesses say the skill shortage is, in fact, very real, and is caused by many of the same rapid technological advances that boosted worker productivity.
Many unskilled manufacturing jobs have been replaced with jobs requiring advanced math and computer skills, according to the National Association of Manufacturers.
The group said 90 percent of manufacturers are suffering from a shortage of skilled workers such as machinists and technicians, in part because of trouble recruiting young workers to replace skilled retirees.
At a biotechnology conference last fall, Ben Venue Laboratories in Bedford and Amylin Pharmaceuticals in Cincinnati said they had trouble recruiting workers, including senior-level scientists. In the past year, about 50 biotech companies moved to or were formed in Ohio.
The U.S Department of Education estimates only 20 percent of the U.S. population will have the skills needed to perform 60 percent of the jobs in coming years.
Central Ohio employers expect shortages in health care, information technology, architecture, engineering, sales, and business and financial operations in the next year.
Even so, these jobs will only yield a small number of openings every year. Occupations with lower pay and fewer skill requirements will provide significantly more jobs, according to the Ohio Department of Job and Family Services.
For instance, for every one job opening for a network systems data analyst, Ohio will have 20 openings for retail salespeople.
Still, skill shortages do pose a real risk to businesses, and maybe more so in the future, Lafayette said.
“All of the baby boomers are eventually going to go away, and there¡¯s a much smaller group of folks coming through the pipeline to replace them,” he said. “The real shortage hasn¡¯t happened yet.”