Training Industry

The Skills Gap Revisited

  • The Skills Gap Revisited

My expedition into the skills gap did not end with the “Is There or Is There Not a Skills Gap?” piece that was posted last month. As I mentioned, I needed to conduct more research in order to possibly find the answer to that question, and I’m still working on it. Unfortunately, I can’t proclaim that I have found THE answer, but I do feel that I have a keener, more comprehensive understanding of the whole skills-gap issue.

 In addition to reading many more articles and opinions about this fairly popular topic these days, I spoke with two leading authorities on the skills gap: Peter Cappelli, a professor of management and director of the Center for Human Resources at the Wharton School, and Martin Scaglione, president of the ACT Workforce Development Division.

Are Companies to Blame?

I’ll begin with Capelli, who is also author of a newly released book, "Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It." In a recent “Room for Debate” opinion section of the New York Times, titled “Does a Skills Gap Contribute to Unemployment,”  Cappelli boldly proclaimed: “If you can't find the right person for the job, chances are you're a bad manager, and maybe a bit too cheap.”

Ah ha! Now there was someone I needed to talk with right away .The next day I’m talking to Cappelli on the phone, and my first question relates to the recent ManpowerGroup Annual Survey.

“Peter, how can you say that there’s no skills gap when this survey states that half of U.S. employers can’t fill critical positions?” I asked.

“All they (the ManpowerGroup) are doing is reporting what employers are telling them,” Cappelli replied. “And all they (employers) know is that they can’t find the people they want, but they don’t know why. They haven’t done any real analysis themselves to figure this out. They have not tried to see that ‘gee, what would happen if we raised wages, what would happen if we trained people.’ They are also not willing to bring someone in who might be slightly less than perfect for a job and get them up to speed. ”

In addition to Cappelli’s book , he wrote two interesting and popular articles that outlined his overall philosophy about the skills gap that were published in the Wall Street Journal  in October 2011, the first was headlined “Why Companies Aren’t Getting the Employees They Need,”  which generated more than 400 comments, and a second article two days later that was subtitled “The Author Follows Up.”

Here’s a short bullet-point version of Cappelli’s point of view about the skills gap based on his book and these articles:

  • Employers are not offering fair, market-value wages for the hiring of new talent.
  • Employers resist training high-skilled, educated job candidates who only need a little training to do the job if only given a chance.
  • Employers have unrealistic standards that they expect job candidates to meet.
  • Employers often use imperfect applicant-tracking software when looking for job candidates.
  • Employers need to promote more from within as opposed to hiring from outside. Many incumbent workers who have very useful first-hand knowledge can step into higher level positions with a little training.
  • Employer expenditures on recruitment activities have fallen considerably in recent years.
  • Employers unjustifiably blame the education system for their inability to find perfect job candidates.

On the same day, shortly after talking with Cappelli, I had a great conversation with Scaglione, who is also an expert on the skills gap.

The Great Mismatch as it Relates to Low, Middle and High-Skilled Jobs

Scaglione described what kind of matches and mismatches American companies and prospective employees are experiencing at the low-skill, middle-skill and high-skill levels of employment.  His first comment, however, was that “our education system, as great as it is in America, is really at a point now where it has not kept up with the needs of the employer.”

“A lot of people would disagree with that statement,” I responded, playing the devil’s advocate and then referring to Capelli’s skills gap philosophy. Plus, I threw in my own personal feelings of skepticism, in general, about the skills gap.

Sobering Stats

Scaglione was referring primarily to the K-12 system. He pointed out that data analyzed from 30 years of ACT test scores to date have indicated that approximately 70 percent of young people coming out of high school are not prepared for success in college.  According to Complete College America, out of the entire population of high school graduates, more than 70 percent pursue some kind of post high school training or education within two years after graduation day. However, most, unfortunately, eventually drop out before earning enough credit to be awarded a degree or certificate. For instance, of those who go on to a community college to further their education, only 30 percent graduate with an associate degree in three years.

Where the Skills Gap Really Resides

It is those people who have not earned the minimum of a two-year degree that Scaglione says constitute a large population of our country who are stuck in low-skilled jobs that do not require any higher education.  Low-skilled jobs that do not require a minimum of a two-year degree represent about 35 percent of all jobs. Middle-skilled jobs that do require a minimum of a two-year degree represent about 45 percent of all jobs. The remaining jobs are high-skilled jobs, requiring a minimum of a four-year degree.

The skills gap is definitely not at the high-skill level. “There are plenty of four-year degree people, and there are plenty of four-year degree jobs,” Scaglione says. “There are plenty of professional-level jobs to match the people coming out of college. In other words, for CPAs, engineers, medical professionals, etc., the demand for those levels of skills is pretty well matched with the supply chain.”

There is, however, “a huge mismatch at the middle-skill level,” Scaglione adds. “There is not enough talent coming through the system to meet the demand for jobs at the middle-skill level, and there is an overabundance of low-skilled workers.”  Therein sits the skills gap problem that screams to be fixed.

I won’t go into solutions for fixing this problem. There are many, and describing them would take a good number of additional blog posts and/or feature articles. There are also other elements that come into play here that I won’t delve deeply into at this time, including that many college graduates are being forced to take on middle-skill jobs, thus sending those who should be filling those jobs into the low-skill arena and further complicating the whole supply and demand of jobs.

Your comments and suggestions, of course, are more than welcome. 

About the Author

George Lorenzo

George Lorenzo is president of Lorenzo Associates, Inc., and writer, editor and publisher of The SOURCE on Community College Issues, Trends & Strategies, a rich information resource dedicated to the postsecondary education sector.  He has more than 25 years experience as a professional education writer, editor, researcher and publisher. 

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