Editor's note: This is part one of a two-part series on the skills gap. This piece digs into the phenomenon's causes, while "7 actions employers can take to address the skills gap" looks at possible solutions.
How do you match the right talent with the right job? Employers are scrambling to answer that question.
This phenomenon — an inability to find skilled people for open jobs — is frequently referred to as the "skills gap," and while some debate its existence, U.S. Bureau of Labor Statistics (BLS) data seems to support the idea that available workers just don't have the skills employers are looking for today. That, however, is where the commonality ends.
Regions experience the skills shortage differently, as do industries. The gap appears to be worst in the San Francisco Bay Area, Washington, D.C. and Austin, Texas, according to BLS data.
The U.S. cities with the largest overall skills gaps
The amount of skills which employers need but local job candidates do not possess in adequate quantities
The amount of in-demand skills of which local job candidates possess in amounts that exceed demand
As far as industries go, the hardest-hit segments according to BLS are: construction; arts, entertainment and recreation; and retail trade. And in different regions and different industries, the gap is caused by different problems, meaning those groups will need individualized solutions.
Is the skills gap real?
A disconnect between the unemployment rate (currently hovering at 4.1%, so with some flexibility still) and the actual experience in the labor market has some questioning whether the skills gap actually exists or is an imagined barrier created by employers contending with a shifting business environment. But Richard Wahlquist, president and CEO of the American Staffing Association, says otherwise, as does Brett Underhill, global talent acquisition leader at LinkedIn.
“This rate suggests that there is still a lot of slack in the U.S. when it comes to the availability of talent. But that has not proven to be the case. Something is very different about this post-recessionary American labor market,” Wahlquist said in an emailed comment to HR Dive.
According to recent BLS data, 6.3 million jobs remain unfilled and even the best recruiters are struggling to fill those roles despite millions of people who “are willing and able to work” across industry, job and geographic lines, Wahlquist said — a rather “disturbing trend” for recruiters nationwide.
“The skills gap is a reality in today’s economy,” Underhill said. Finding not only the right people but the people with the correct skills is a serious challenge for anyone on the talent hunt today.
“The consensus opinion is that there is a growing, and some would say dire, disparity between the skills that the unemployed job seekers possess, and the skills and expertise that employers need,” Wahlquist said.
Some of the causes of the skills gap, however, may be self-inflicted.
It’s not just a lack of technical skills that leaves employers without a strong applicant pool. Sometimes, it’s about the mindset recruiters bring to the process, Deborah Munster, executive director of Diversity Best Practices, told HR Dive. A company may cry "skills gap" when, in reality, they aren’t actively tapping or retaining all sources of talent available to them — and unconscious bias may be one of the first roadblocks to truly opening up the recruiting process.
It’s natural for any recruiter to hire people they feel comfortable with, but that bias can seriously stifle a company’s attempt to broaden their net, especially during a talent shortage, Munster said. No matter how highly an HR exec may think of their front-line managers, the unfortunate truth is that bias most often appears within managerial processes.
“What I think our research has shown is that the retention rate and the desire to stay is lowest for women of color, as they did not feel they had equal access to advancement,” Munster said. “If you think about the time you spend getting diverse people in the door, and how you could lose them...that’s a lot of money to let go.”
Emotional intelligence and people skills — also known as soft skills — are increasingly important in a global environment. While employers may consider a lack of technical knowledge as the driving force of their skills deficit, a lack of solid managerial skills can make all other existing skill gaps even worse.
“The skill set to be able to manage in a diverse environment I think is very much lacking in the workplace,” Munster said. So recruiters may have to change the rubric for what it means to be a top employee. Cultural competency, for example, is harder to teach than technical know-how.
But employers may feel skittish about an open diversity and inclusion policy, Munster noted.
“To be completely honest, diversity has a negative connotation that people perceive...to some folks it can be seen as a zero-sum game,” she said. Other employees may believe they didn’t get the same opportunities or attention, or that they could even lose their job. “I think companies that open themselves to engaging really need to understand those barriers and perception in the organization,” Munster added.
Either way, many employers have recognized diversity as both their Achilles’ heel and a potential solution regarding the skills gap. Multiple studies have pointed to business improving when diversity and inclusion are made a priority.
“Employers should make inclusive recruitment an integral part of the company’s DNA to cultivate their workforce,” Underhill said. “If you’re finding that your typical recruitment and hiring tactics aren’t getting results, give them a scrub.”
While some part of the skills gap may be caused by internal forces, others are almost certainly coming from outside the workplace. Technology is evolving faster than employees can reskill and the opioid crisis has removed a large segment of working-age adults from the workforce. Additionally, while some of the pressure from the baby boomer backup is finally being relieved, that shift is causing different problems, as 10,000 boomers retire each day.
Between the opioid crisis and relaxed marijuana laws, employers are reporting that they’re having trouble finding candidates who can pass a drug test. Both are big factors contributing to the skills gap, according to Kathryn Russo, a principal at Jackson Lewis, but they’re having different types of impacts.
“I think the opioid crisis, to some extent, is … geographic,” she said. Russo testified in a congressional hearing last month, telling lawmakers about the workplace implications of drug addiction. Another witness, the CEO of a West Virginia company, testified about just how taxing the epidemic has been in her region. Unable to find sober, qualified applicants, she’s taken to hiring workers with addictions and is trying to help them, Russo explained; the company can’t afford to exclude those applicants.
Employers in rural areas are often starting out with a smaller applicant pool than those elsewhere, Russo said. Couple that with the opioid crisis and it’s easy to understand how employers are struggling.
For Russo’s clients, however, the influx of laws legalizing marijuana has been the bigger issue, especially in states that have legalized the drug for recreational use.
And while not every client has expressed this concern, “some are finding it difficult to find applicants who can pass a pre-employment drug test,” she said. For employers who aren’t doing safety-sensitive work, some have opted to scrap pre-employment testing for marijuana. But those in construction and healthcare, for example, often don’t have that option. “Those employers are still going to test, including for marijuana,” Russo said, even if it means difficulty finding qualified applicants.
Medical marijuana poses challenges of its own, Russo said, but it’s a narrower problem. “You have to know the state law,” she said, and if there are certain protections, employers often must perform an individualized assessment each time the issue arises and decide whether it’s possible to hire that person. “It doesn’t necessarily impact the applicant pool, but it’s another obstacle that employers have to deal with,” Russo said.
An aging workforce
Many employees from the baby boomer generation have been delaying retirement, so while employers coping with an aging workforce may not have a dire staffing need at the moment, they’re still facing a serious skills gap within their workplaces.
Employers faced with these “reluctant retirees” have to determine whether these workers are, as Raymond Lee, CEO of Careerminds, puts it, playing to win or “playing to stay.” An employee who is invested is providing valuable contributions to their team; they could be 70 years old and they’re just killing it at work, Lee said.
But those who are “playing to stay” have checked out and are just punching a clock and keeping their heads down. They’ve possibly delayed retirement because of a financial reason or because they’re scared of what life without work might look like.
The resulting problem, however, is sometimes the same. Millennials have been in the workforce for more than 10 years now and are ready for additional responsibility. And if they aren't offered that opportunity, these workplaces will soon face a retention problem. Lee's company, an outplacement and career transition firm, helps HR departments create programs that get employees thinking about what they want to do next.
It’s important to enable movement within an organization, Lee said. Sometimes the answer is phased retirement – allowing workers to ask for part-time schedules, contracted work or reassignment without fear of reprisal.
In utilities, for example, long-tenured employees often aren’t trained in the digital tracking companies are using now. There is, of course, the option to upskill, but for workers who perhaps don’t want to undertake education that will last as long as they’re planning to remain in the workforce, an opportunity to shift into another role may make sense.
Similarly, if employees can no longer meet the physical demands of a job, employers can make clear that administrative roles are available, like the health care industry has done for nurses, for example, Lee said. This can all be part of broader retirement coaching efforts, he noted.
Where do we go from here?
Once you've identified the problems creating your own particular skills gap, you can begin looking for solutions. Experts have suggested solutions that range from thinking outside the box about candidate credentials to upskilling your current employees, among other things. For part two of this series, which addresses these solutions, see "7 actions employers can take to address the skills gap."