What Skills Gap?

Is there really a skills gap? I can almost see you shaking your head and rolling your eyes. Some recent research by field economist Peter Cappelli, with the US Bureau of Labor Statistics, indicates that much of the data supporting skill gaps may be faulty. His report, published by the US Department of Labor, proposes that there is little empirical evidence to confirm the existence of an actual skill gap or skill shortage. Cappelli indicates that most reports of skill gaps are unsubstantiated anecdotal reports from employers themselves.

I don’t know that I agree with him. I think time will reveal the true story. Nevertheless, if you are a company struggling with finding candidates for your top positions, a skill gap or skill shortage seems very real. It takes three times longer to hire for a difficult-to-fill position. This is true, even among employers who reported the vacancy was absolutely critical. A couple of general observations come to mind when I think about this issue.

The first is location…location…location. It’s true. If you are trying to get someone to relocate to International Falls, MN, you are going to be hard pressed. It’s a small town of less than 7000 residents. The average winter temperature is 2 degrees Fahrenheit and residents struggle with about 65 inches of snow. You probably won’t get many takers there. No matter how much you are willing to pay.

Zierick Manufacturing Corporation, a small family business in Mount Kisco, New York, also has a location issue. Zierick has trouble finding tool and dye makers. Parents in this college town don’t want their babies to grow up to be factory workers. That’s why they send them to college to be engineers. But alas, the company does not need engineers. Zierick needs tool and dye makers. This is called a skills mismatch. And Zierick is hurting.

Research backs up the claim that some industries have a more difficult time than others. A new report from the NC Workforce Development Boards and their Labor & Economic Analysis Division, confirms what we in the recruiting industry have known all along. Employers in Education, Construction, and Healthcare have the most difficulty finding skilled workers.

Are You To Blame?

Companies moan about a skill gap, but this may just be a perception problem. A 2011 survey revealed that employee tenure has suffered a widespread and substantial decline. This is particularly true among larger firms. It is no longer a norm for employees to stay with a company for many years.

Employees zigzag their way up the career ladder, moving from company to company. This results in a domino effect as employees leave and new hires are onboarded. There will be more frequent openings and increased recruiting to fill them. Yes, companies are recruiting more, but not due to a skills gap. It is just a new norm we must learn to accept.

Your promotional practices may also contribute to the perception of a skills gap. How? It’s all about turnover and how you fill vacancies. Due to the availability of skilled workers seeking career advancement with other companies, there has been an overall decline in promotion-from-within policies. When an employee who worked his way up within your company leaves unexpectedly, it may be difficult to find an internal candidate who is ready for advancement.

That’s why I advise companies to have someone “on the bench.” You should continually challenge your employees and provide opportunities for them to grow. Be sure to have several talented individuals within your organization being mentored and groomed for a promotion. If you promote someone, it means the opening you have to fill is at a junior level. That’s much easier. You don’t want to be trying to snag one of those zigzaggers. That’s going to take longer and cost you more money!

Do You Expect Too Much?

Employers surveyed indicated a variety of reasons for their hiring difficulties. 44 percent of industry-wide employers indicated candidates’ lack of experience as the top reason for their difficulty in filling a position. This was true even when hiring for entry-level or junior positions straight out of college. If candidates can’t get placed in an appropriate position due only to a lack of experience, this contributes to a mismatch situation where candidates with good qualifications are forced into a situation where they are shamefully under-employed.

Companies may be hesitant to hire a new grad. New grads require some mentoring and will need to develop soft skills more experienced candidates already have. Many companies feel the new recruit will just use them for resume fodder. They’ll gain some experience and soon move on. This does happen. But it happens throughout your organization and will happen no matter how good the fit and how amazing your company perks.

As previously discussed, most employees will zigzag through several companies during their careers. This is the new norm. Consider it your civic duty to mentor a few of them along the way. You’ll likely benefit from some new hires who were trained by another employer, so it will even itself out in the end.

Some of your hiring difficulty may be because you are just too picky! Let me explain. When a company has numerous applications they often run screening software (ATS or Applicant Tracking Software) to narrow down the applicant pool. This is a strategy the company hopes will filter out all but the top candidates.

Unfortunately, many candidates who have excellent qualifications but didn’t put the proper keywords on their resume, are left out. Or, perhaps the candidate has four years of experience instead of the arbitrary five you listed. Be cautious when using ATS. If you find you don’t have enough candidates take a second look at the ones your ATS rejected.

An interesting aside here is that when companies run ATS they often raise the standard. They are hoping to snatch up a candidate whose credentials are way above the actual job requirements. Sometimes employers tack on so many extra requirements that finding a match is rare. 67 percent of hiring managers have indicated they don’t think they should settle for a candidate who lacks the perfect qualifications. This doesn’t represent a true skills gap — it’s just being too picky!

Lack of Adequate Recruiting

So why do companies perceive there is a skill gap? Reliable research indicates it is likely due to a decline in the effort spent on recruiting. The overall presence of vacancies in the workforce and the length of time it takes to fill them does not automatically point to a skill shortage. A growing company will be motivated to fill a position quickly, while one that is in a maintenance mode will prolong the process. That’s the “every day delayed is a dollar saved” approach.

Many companies list positions on their company website, and that’s the end of it. They depend on the wonders of the web to magically draw qualified candidates to their door. It’s just not that simple. Other companies go a step further and use social media to attract candidates. They list their openings on LinkedIn and on various professional job boards. This helps, but many employers are overwhelmed by the quantity of applicants and are disappointed by their quality.

There are government Workforce Career Centers in every state. These centers are funded by unemployment taxes and they specialize in job placement and training. It is free to list your opening there, but there is limited candidate screening involved. These state facilities must pass along all applicants who indicate they meet the minimum qualifications. Again, this may overwhelm your human resource department with an excess quantity and no ranking as to the quality represented.

Many employers recruit at colleges or organized job fairs. This can work well for non-critical or entry level positions. Most large organizations have an internship program for students nearing graduation. This gives students or new grads some work experience and allows you the opportunity evaluate their abilities and cultural fit. Many interns go on to be hired by the company they interned with.

Along these lines, some employers are rediscovering the benefits of apprenticeship programs. In recent years, there has been a 50 percent decline in apprenticeship programs. There are costs associated with employer-sponsored apprenticeship programs, but they can offer a generous return on investment (ROI). No one knows your needs like you do. Perhaps internships or apprenticeship programs would give you “someone on the bench” ready to step in when a vacancy appears. It is likely that apprenticeship programs will gain momentum in the near future. These programs are a sure way to fill a skills gap.

Hiring Difficulties

So is there really a skills gap or skill shortage? Current research indicates this may not be the correct term to use. Perhaps it would be more accurate to term the problem as a “hiring difficulty” and address it accordingly. We know some positions are harder to fill than others. This may be due to location, perceived desirability of the industry and many other factors.

Candidates with the skills required to fill jobs in education, construction, healthcare, and even manufacturing are increasingly difficult to find. I have noted some common recruiting strategies above. Is there anything else you can do to place candidates in your hard-to-fill positions?

Have you thought about using a professional recruiter? A professional recruiter won’t cost you anything at all until you hire a candidate they introduce. Recruiters think of their fee as an investment, rather than an expense.

At my company, we have built a database of almost a million candidates who may be interested in your position. Most of them are currently employed, so they won’t be perusing your website. But, if they knew about your opening, perhaps they would be interested. Where else are you going to find this kind of talent?

A major advantage of using a professional recruiter is that we are able to screen candidates and provide you with top talent that has been fully-vetted. Recruiting companies vary, but most will present you with a small selection of candidates. Thus, you avoid the problem of excess quantity and questionable quality that is so common when you use other recruiting methods.

Labor analysts continue to argue about the existence of a generalized skill gap across the country. Regardless of their conclusions, employers still find some jobs are extremely difficult to fill. If you encounter hiring difficulties, sometimes a professional recruiter is your best bet. Remember personnel are both your greatest expense and your biggest asset. An investment made in securing top notch talent is never wasted.

Here’s wishing you luck in finding the best of the best!