Despite the recruiting and HR industries’ best efforts, the often bemoaned skills shortage seems to be getting worse, according to The Society for Human Resource Management’s (SHRM) New Talent Landscape report. After surveying more than 3,000 US-based HR pros, SHRM found that 68 percent of them were struggling to fill full-time regular positions. That’s an 18 percent increase from 2013, when only 50 percent of HR pros reported difficulty.
Jen Schramm, manager of SHRM’s workforce trends and forecasting program, says the increase may be a problem of both supply of and demand for talent.
“Just a few years ago, we were in the middle of a recovery that was considered by many to be a jobless recovery,” Schramm says. “There weren’t was many positions open in 2013 compared to now.”
Now that the economy has recovered further and more employers are looking to hire, it makes sense that more HR pros would report difficulties in filling roles. Some of these very same HR pros may have had no difficulties in 2013 simply because they weren’t hiring.
The supply side, however, is where we see the impact of the skills shortage plaguing many organizations in a variety of industries. During the recession, many baby boomers who had planned on retiring decided not to. The economy was too precarious at the time. Now, however, these same baby boomers are starting to leave the workforce by the thousands every day. Employers must replace them as they go, but the new supply of labor isn’t quite up to snuff — simply because these younger workers have not been in the game for as long as their baby boomer counterparts have.
“The new entrants to the workforce won’t necessarily have the same level of experience as those who might be leaving those jobs, for obvious reasons,” Schramm says. “They haven’t been working as long.”
According to the HR pros SHRM surveyed, today’s labor pool is lacking in both basic and applied skills.
At the basic level, HR pros say today’s candidates fall short in the following areas:
- writing in English;
- basic computer skills;
- spoken English language;
- reading comprehension;
- and mathematics.
As for applied skills, HR pros believe today’s candidates could stand to improve in these areas:
- critical thinking/problem-solving;
- professionalism/work ethic;
- written communications;
- and teamwork/collaboration.
Many of the HR pros surveyed said they believe training and development programs could help close the skills gap, with 42 percent saying that training existing employees is an effective tactic and 40 percent saying that expanding training programs for new hires could work as well.
Unfortunately, this solution isn’t as simple as it seems on the surface.
You Can’t Train Without a Budget — and Many HR Pros Don’t Have Them
“HR pros see training as a potential way to alleviate [the skills shortage], but it’s not uncommon for HR pros to not have training budgets or to have stagnant budgets that haven’t increased over the last few years,” Schramm says.
According to SHRM’s report, 31 percent of HR pros say their organizations do not have training budgets. Of those pros who do have budgets, a half of them say their budgets have not increased in the last year, and 11 percent say their budgets have actually decreased. Training programs won’t make much of a difference if HR pros don’t have enough money to run them effectively.
Schramm believes these attenuated training budgets may be the legacy of the Great Recession. Because the boomers were putting off retirement, employers had less of a need to train new employees, so many organizations cut training programs in an effort to control costs. Unfortunately, as the economy recovered and the boomers began leaving, training remained on the back burner.
“For a lot of millennials, they have been in the workforce for a long time and have never seen organizations make major investments in their training and development,” Schramm says. “I think this study is kind of showing how [the lack of investment in training] may be creating the problems we’re having with recruiting, and now organizations have to rethink their strategies because they are really struggling to fill important roles.”
And then there are those smaller organizations that would have lacked training budgets regardless of whether or not the recession had happened. These organizations still need qualified talent, but they aren’t suffering because they never undid the cuts to their training budgets. They’re suffering because they simply can’t afford to train new employees.
The ‘Public Option’
These smaller organizations — and even some of the larger ones — would do well to take advantage of the community programs that might be available to help them train their staff or find people who are already trained. Local educational institutions and the public workforce system, for example, could be boons to employers that are struggling to fill open roles.
The public workforce system is, according to the U.S. Department of Labor, “a network of federal, state, and local offices that function to support economic expansion and develop the talent of our nation’s workforce.” If your average HR pro is anything like me — a man who writes about this sort of thing for a living — they’re either totally unaware of the so-called “public workforce,” or their understanding of it is limited at best.
In fact, that does seem to be the case: 43 percent of the HR pros surveyed by SHRM said their organizations had not made use of the public workforce system. That’s a serious problem, because this untapped vein could be a major blessing for companies struggling with the skills gap — especially those smaller organizations that couldn’t increase their training budgets if they wanted to.
But as was the case with in-house training, so too is the case with utilizing the public workforce: It’s not as simple a solution as it seems.
Give and You Shall Receive
While the government offices, community leaders, and educational institutions involved in the public workforce system may be trying their hardest to build a better workforce, there seems to be what Schramm calls a “mismatch” between the training these agents provide and the skills that employers need.
“One of the reasons [behind the skills shortage] HR pros identified in the survey was that the local talent market was not producing enough work-ready or qualified applicants,” Schramm says.
For example, the health care and social assistance industry is having a particularly hard time finding talent, according to SHRM’s report. In part, this is because many health care positions require certifications — certifications that the local labor pool lacks for many health care organizations. This suggests that the individuals participating in educational and training programs in preparation to join the workforce aren’t receiving enough information about where demand is and what they need to learn in order to be competitive on the job market.
“This is a really expensive mistake to make, that mismatch, because people put in time, effort, and lots of money to get educations,” Schramm says. “You want them to get [educations] in areas where they’ll be able to find work.”
It would be easy to blame the public workforce system, but that’s not entirely accurate. The public workforce system is struggling in part because many organizations are unaware of it. Without the guidance of these organizations, the public workforce system can’t possibly know exactly what skills employers need. But even this doesn’t give us the full picture.
A huge part of the problem is that the 41 percent organizations that do make use of the public workforce system aren’t making use of it in smart ways. Thirty-five percent of these organizations use the system to post job openings and 24 percent participate in local job fairs, but job fairs and job advertisements are not long-term solutions to closing the skills gap. These are just ways to find talent in the short term.
An abysmally small 5 percent of the organizations that make use of the public workforce participate in workforce investment boards, and an even smaller 3 percent use the system to meet the training needs of their employees.
With so few employers actually investing time, money, and energy in the public workforce, it’s no wonder that the skills gap continues to thwart HR pros left and right. Here we have a network of people ready to train tomorrow’s talent — but they cant do it without the help of the companies that need that talent.