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Skills Gaps and the Impact on Hiring

The economy gained 151,000 jobs in January while the unemployment rate dropped to 4.9%, the lowest it has been in eight years. Total job openings are nearing record highs, which should be great news for American workers—but that’s not quite the whole story.

The bad news is that many American workers don’t have the skills needed to fill available positions. This discrepancy between available jobs and available skills to fill those jobs is called the skills gap, and it’s creating problems for both workers and employers.

What’s Contributing to the Skills Gap?

The raw numbers surrounding job gains and unemployment seem to indicate a positive job situation. Employers are hiring, the number of unemployed workers is shrinking, and the economy is picking up speed again. But according to new research, those numbers have more to tell us. Among teenage workers, the unemployment rate is 15.7 percent, while the rate for college graduates is just 2.5 percent. This means that employers want skilled workers to fill available jobs, and they’re having trouble finding them.

There are several factors contributing to the skills gap:

      • Employer Expectations—There is a gap between skills possessed by current workers and skill requirements for new hires filling similar positions. For example, while only 19% of current executive secretaries possess a college degree, the majority of new job postings for this position require applicants to have a degree. Increased expectations for applicants may be a result of the recession when qualified workers were plentiful, but now that fewer skilled workers are looking for jobs, employer expectations may be inflated in some cases.
      • Educational Misfires—Some jobs don’t need a college degree. Instead, applicants need vocational training and experience. The economy needs workers in vocational arenas like plumbing, trucking, and electrical, but finding people with the right skills isn’t always easy.
      • Shrinking Number of Apprenticeships—One option for workers looking to gain the skills needed for vocational work is the paid apprenticeship. Unfortunately, available positions aren’t easy to find. The number of apprenticeships has shrunk by 11,000 since 2002, making it more difficult for new workers to gain needed skills while making ends meet.

How Can We Bridge the Skills Gap?

Last year, the Obama administration set aside $175 million to fund new workforce training programs and apprenticeships, but it will take more than federal funding to solve the problem. Bridging the skills gap will require concerted efforts on the part of both employers and workers:

      • Adjust Expectations—The recession created a hiring environment that set the bar extremely high in terms of job requirements. As the skills gap widens and talent becomes harder to find, employers should rethink the skills, education, certifications, and other requirements listed for a position. Employers should differentiate between the essentials and the nice-to-haves, and consider candidates who can be trained.
      • Offer Apprenticeship Programs—Apprenticeship programs give workers the skills needed for vocational jobs while also reducing turnover and increasing productivity. At the end of the program, employers have a highly skilled, loyal worker who knows the company well. It’s a win for both parties.
      • Hire for Potential—In light of the shrinking number of skilled workers, employers must be willing to hire for potential, even if the candidate doesn’t possess the exact qualifications desired. On-the-job training can help companies fill positions when the candidate pool is small.
      • Partner with Schools and Colleges—If young workers can be trained before they leave college, both employers and employees will benefit. Partnership programs that encourage high school and college students to consider internships, training opportunities, and apprenticeships can help young workers prepare to enter the workforce sooner and with more valuable skill sets.

Department of Labor data clearly demonstrates that workers are looking for jobs and companies want to hire. Bridging the gap between workers and job opportunities may require a new approach to hiring, but it can be done—especially if companies are willing to consider alternative approaches to finding the talent they need.New call-to-action