Why good people can’t find jobs

The U.S. Bureau of Labor Statistics finds in its surveys that there are about 10 people looking for work for every three jobs that are open—more than twice the proportion of job-seekers before the recession.  Yet many employers say there is a labor shortage.  They say they have jobs that they can’t find people to fill.

Peter Cappelli, director of the University of Pennsylvania’s Wharton Center for Human Resources, says that the problem is not unqualified job-seekers.  The problem is bad  hiring practices.

First, he says, when employers advertise for employees, they cast too wide a net.  They get a tidal wave of applications, more than anyone can possibly consider, and so they have to look for reasons to thin out the applications.

Some throw out all applications that use certain buzzwords, or omit certain buzzwords.   Some throw out all applications which indicate that the person is older than a certain cutoff point (even though this is illegal) or that are worded so as not to reveal the person’s age.   Many throw out all applications from people who don’t have the exact skills required, and many throw out all applications from people not currently employed.

Double click to enlarge.

Double click to enlarge.

So if the only person you are willing to hire is someone already doing that exact same job for some other employer, and you don’t want to pay that person a premium wage to lure them away, then, yes, you are going to have trouble filling that post.   I’m exaggerating to make a point, but what I hear from my friends who are looking for work confirms what Cappelli says.  Many employers have arbitrary filtering systems that reject job applications from good people.

Another problem, as Cappelli sees it, is that employers don’t want to hire people they would have to train.  They don’t want to spend the money to train people because they’re not confident that the trainee will stay with them long enough for them to get their investment back.  In fact, the better trained someone is, the better chance the person has of getting a better job elsewhere.

Job-seekers these days spend their own money trying to acquire qualifications they think employers want, but often those qualifications are a mismatch.

According to the theory of how a free-market economy is supposed to work, this isn’t supposed to happen.  According to economic theory, if there is a shortage of workers to fill a certain type of job, then wages for that job will rise until supply equals demand.  The fact that this isn’t happening suggests that theory doesn’t always apply to the real world.

Part of the reason employers are so slow to fill job openings is that the reason they advertise for new workers is merely to appease their over-worked existing staffs.  As long as they are going through the motions, they can tell their exhausted existing workers that they are doing the best they can.

Cappelli has ideas for making things better, including the following:

  • Have employers work with community colleges and vocational high schools to provide training to qualify employees to do specific jobs.  Most American cities and counties want to attract industry and jobs.  This would be a better way to do it than offering tax abatements and other special privileges.
  • Promote from within.   An employer’s best workers are more likely to stay with a company if they have hope of a future within that company.  Taleo Corp., a “talent management” company, reported that, in recent years, two-thirds of all job openings, even in large companies, were filled by hiring from without.  A generation ago, all but 10 percent of openings were filled by promotion or transfer from within.

Cappelli also suggests giving new hires a learner’s wage while they receive on-the-job training.  This could be good, but it offers possibilities for abuse.   Unscrupulous employers could hire cycle after cycle of learners and never give them full pay.  In this age of widespread wage theft, this is a realistic concern.

Click on Why Companies Can’t Find the Employees They Need for an article by Cappelli in the Wall Street Journal.   In fairness to him, his tone is less strident than mine is.

Click on Why Good People Can’t Get Jobs—What You’re Up Against for a review of Cappelli’s book, Why Good People Can’t Get Jobs:  The Skills Gap and What Companies Can Do About It.  I haven’t read the book.

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One Response to “Why good people can’t find jobs”

  1. Generation X - 10 Reasons companies want to hire You | Miguel Mike Matos Says:

    […] Why good people can’t find jobs […]

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