Many of our clients, most of whom are engaged in manufacturing and distribution, struggle with issues of employment, wage-competitiveness, off-shoring, and the like. Thus, we use this blog from time to time to discuss other (non-software) topics of interest to employers, including this post, and the one that precedes it. We may be all about software at PSSI, but we’re just as much about addressing customers’ needs, from the on-topic to the sometimes off-topic. If it helps improve the productivity of our industrial base — and especially our customers’ — then we want you to know about it!
[This is a follow up article to our prior post about Rolls Royce, and its penchant for creating and keeping jobs in HIGH-wage countries, contrary to the many stories we’ve all heard about off-shoring of jobs. Rolls has worked to keep both jobs and intellectual property in the U.S. and Europe by hiring local workers, but has decried the lack of skilled labor available. Below, we highlight a longer article in the WSJ that touches on the myths and realities of finding skilled workers.]
Those who follow employment trends and the current disastrously high unemployment rate in the U.S. of 9%+ officially, and much higher unofficially, may be interested in the thoughts of Dr. Peter Cappelli of the Wharton School of Business, who shared his thoughts in the October 24th edition of the Wall Street Journal.
Cappelli states that the problem companies are having finding skilled labor is a failure not of government or schools, but of businesses themselves. In his article Cappelli makes the claim that perceptions about a lack of skilled labor are pervasive, but wrong. The problem, he says, is an illusion. Rather, many times it boils down to the fact that “employers can’t get candidates to accept the jobs at the wages offered.” Cappelli opines that this is an affordability problem, not a skill shortage. A real shortage, he states, means “not being able to find appropriate candidates at market-clearing wages.”
He goes on to say that there are plenty of folks out there who could step into jobs with just a bit of training, including recent grads without much experience. Despite employers’ complaints, college students are pursuing more vocationally oriented course work than ever before, but American companies don’t seem to do training any more. Unlike in Europe, apprenticeship programs have largely disappeared, he states. And the training given to an average new U.S. hire these days can be measured in hours, not days, weeks or months.
Employers will argue that they train workers, only then to have another employer hire them away for higher wages. Cappelli puts forth a way forward that includes:
- Working with education providers, like community colleges, to be partners in the process
- Bringing back aspects of apprenticeship with graduated wages over time
- Promoting from within: Two-thirds of all vacancies in recent years, states Cappelli, have been filled by hiring from the outside, apparently wasting valuable in-house resources
Cappelli believes his prescription provides for both the self-interest of employers as well as the interest of society as a whole – and that the answer lies within.
[PostScript: Cappelli received, he says, “an avalanche of reader response” to his article. For his follow-up comments and the full text of the article, go here.]