Are Employers Contributing to America’s Skills Gap?

There is, it seems, a skills gap in this country.

Even as the national unemployment rate lingers above 8 percent — 12.5 million people — tens of thousands of jobs are going unfilled as employers contend that they just can’t find qualified candidates. Applicants need to get more education, more skills, more experience, according to hiring managers.

But the problem may not lay with the job-seekers alone, according to “Why Good People Can’t Get Jobs”, a recently released book by Peter Cappelli, a management professor at the Wharton School. Companies’ own expectations and practices, Cappelli argues, contribute to the rift between employers and would-be employees.

First of all, employers may be setting their sights too high, or rather, too precisely. They are looking for candidates whose experience and qualifications indicate they would be able to start contributing right away, with little training or ramp-up time, Cappelli says. It is an understandable impulse, he writes, but in a rapidly evolving labor market, skill sets are changing so often that an exact match can be hard to find.

In fact, the number of apprenticeship and internal training programs has declined significantly over the decades, Cappelli contends. In part, employers don’t want to shoulder the cost of such efforts. Many also worry that after they spend the time and money to get a new worker up to speed, the newly qualified employee will be hired away but another company.

“In short, a huge part of the so-called skills gap actually springs from weak employer efforts to promote internal training for either current employees or future hires,” Cappelli argues.

Then there’s the matter of money. Employers who don’t use available compensation data to properly benchmark jobs want to hire applicants who are willing to work for whatever wage the company wants to pay. When no one will take the job at that rate, they conclude not that the offered pay is too low, but that there is a shortage of available labor.

“This doesn’t reflect a skill shortage,” Cappelli writes. “It simply means that employers are not paying the market wage.”

Automated application software can also exacerbate the perception of a skills gap, he says. Many such programs match applicants’ against an often lengthy and detailed list of required qualifications. The problem, Cappelli writes, is that these systems can end up filtering out candidates who are missing only a trivial requirement or those who simply didn’t use the right wording in describing past experience.

“Woe to the applicant, however able, whose experiences and credentials don’t form a perfect match with what the software is looking for,” he writes.

So what solutions does Cappelli propose?

Policies trying to address the purported skills gap should, he suggests, look at ways to implement and improve training programs. Rather than expecting schools to take up the burden of teaching skills best learned on the job, employers should look at developing programs in which they split the costs with community colleges, employer associations, and even the potential employees themselves.

“It makes no sense for the employers, as consumers of skills, to remain an arm’s-length distance from the schools that produce those skills,” Cappelli writes.