Does the "Skills Gap" in Employment Truly Exist?

Does the "Skills Gap" in Employment Truly Exist?

According to many employers, one major factor explaining why the unemployment rate is still achingly high is not that there aren't enough jobs for those who want them -- it's that job hunters don't have the skills necessary to fill the vacant positions that exist. This fairly new phenomenon has been labeled the "skills gap," and it's been getting a lot of press.

Does a skills gap really exist? From what I can tell, no -- that is, there is no more of a mismatch of skills between job applicants and the positions for which they are vying than there has ever been. There is a problem, however, and companies are at least partly to blame.

A work force short on skills
Shortly after Labor Day, CNBC reported the results of a survey that painted a sorry picture of the knowledge and skill level of the U.S. workforce, at least according to 500 company executives who participated in the poll. Only 8% indicated that there is no skills gap, and the majority of those who believed in its existence ticked off several ways in which workers are lacking.

Besides being deficient in technical, leadership, and computer skills, these executives also bemoaned the fact that job applicants come up short in "soft skills" such as critical thinking and communication. The biggest portion of the respondents, 44%, saw this latter issue as their biggest concern.

Repackaged, and given a new label
The idea of a skills gap isn't new. A paper published in 2009 by the American Society for Training & Development noted that, as far back as 2006, the ASTD had been warning of a discrepancy between the positions available in various industries and the skill level of those applying to fill them. The paper noted that a survey conducted in 2008 showed both high school and college graduates to be ill-prepared for the workaday world, and that half of the employers polled acknowledged having to provide "readiness training" to new employees.

What's wrong with giving new hires a little training? One thing that is becoming clear is that employers don't want to expend any time or expense doing on-the-job training, or even onboarding. Instead, according to an article in The Wall Street Journal from October 2011, companies blame schools for not adequately preparing students for the workplace.

But, as the author of the article notes, employers have a plethora of job candidates from which to select, which tends to make them choosier. In other words, why choose a high school graduate when you can hire someone with a college degree, and pay them the same wages?

Unequal pay for skilled work?
Evidence of wage stagnation is real, which lends credence to the notion that employers simply don't want to pay up for the skill levels they feel they need.

Fellow Fool Sean Williams noted recently that underemployment, the growth of part-time work over full-time employment, and a lack of wage growth have all taken their toll on Americans. Indeed, the U. S. Census Bureau, in its latest report about Income, Poverty, and Health Insurance Statistics for States and Local Areas, states clearly that incomes were lower in 2012 than they were in 2007.

An exaggerated problem
While experts like Anthony Carnevale of Georgetown University's Center on Education and the Workforce agree that some mismatch of skills to jobs exists, Carnevale also feels that the extent of the problem is overblown. He notes that one barometer used by those espousing the importance of the skill gap is online job postings, but points out that filtering out old postings drops the supposed three to four million jobs going unfilled each month to a little over two million.

Statistical information also belies the importance of the skills gap. For instance, the unemployment rate for all of 2006 and most of 2007 was comfortably below 5%, yet employers feel that the situation now is at crisis levels. Surely, the financial crisis and ensuing recession had more to do with the current unemployment problem than some phenomenon whereby American workers suddenly lost accumulated workplace skills.

What can be done?
Most executives participating in the survey above thought that company training programs would go a long way to help match workers with jobs, but balked at paying for them.

In a bid to save costs, many companies cut training and apprenticeship programs over the past few years and are reluctant to start them up again. One big fear is that newly trained employees will leave for competitors that do not provide training. It is notable, however, that those companies that do train employees are much less apt to gripe about a skills gap.

Much of the problem, at least as far as executives see it, seems to stem more from employers who don't want to provide on-the-job training, rather than a true dearth of knowledge in the pool of job candidates. Therefore, companies themselves will be instrumental in tackling this issue.

This will cost money, but partnerships with entities like the Skills2Compete Coalition in Indiana -- which is pushing for adult training for in-demand middle-skills jobs such as plumbers - could make those dollars go further. An investment in employees will help companies maintain competitiveness in the long run, which will be a boon to workers, employers, and the economy, as well.

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