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What skills gap?

Sept. 27, 2013
Our annual engineering-salary survey this year coincides, by chance, with national debates about ObamaCare (officially the Patient Protection and the Affordable Care Act) and its impact on hiring. On the employment front, the biggest complaint about the Act centers on incentives to hire part timers instead of full-time workers. These incentives prompted some frank assessments from Bob Funk, owner of Express Employment Services, America’s fifth-largest employment agency. He recently told the Wall Street Journal that ObamaCare has been a boon for his business but that it is “terrible for the country. I see that firsthand every day... Firms are just very reluctant to hire full-time workers.”

But Funk went on to say that the primary jobs problem is that of too many workers are unemployable because of their attitudes, behaviors, or lack of basic work skills. Consequently, his agency accepts only about one in six people who apply.

Now contrast these remarks with the findings of Peter Cappelli, director of The Wharton School’s Center for Human Resources. He says the idea that employers can’t find workers with adequate skills is a myth.

Cappelli claims that the more you look at the evidence backing this up, the more it tends to fall apart. He cites a large 2011 survey by the ManpowerGroup, a multinational employment search firm that tracked positions that were the hardest to fill globally. One finding was that some areas thought of as having a skills gap (including production operator and sales rep) were those where required skills were largely learned on the job. Thus, one interpretation of the widely chronicled skills gap merely reflects an inability of employers to pirate away employees from other firms.

Cappelli puts a lot of the blame for the skills gap myth on employers themselves. “When I hear stories about the difficulty in finding applicants, I always ask employers if they have tried raising wages, which in many cases have not gone up in years,” Cappelli says. “The response is virtually always that they believe their wages are high enough. But — and it’s a big but — this doesn’t reflect a skill shortage. It simply means employers are not paying market wage.”

That brings us back to our engineering-salary survey. One of its underlying findings was that many engineers think they are underpaid. You might be tempted to see that attitude as ordinary grousing. But a review of the Manpower study shows they might indeed have a point.

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