Despite the slight decrease in unemployment and increase in job openings, employers are still struggling to find skilled talent. Although there are promising signs that we are emerging from the recession, this skills gap, which is essentially a gap between the market place’s current skills and the future capabilities of the marketplace necessary for future development, is widening so much so that it is stunting our growth and affecting our economy in a negative way.
So, what is the cause of this skills gap? According to an article
looking at the manufacturing industry in Minnesota, 70 percent of the jobs available to Americans require some sort of extra training, particularly in the fields of nursing, industrial engineering, manufacturing, and production, and yet “one in three jobs is hard to fill because of lack of skills.” Herein lies the gap, but what is the cause? Many think it has something to do with a lack of “soft skills,” which includes skills such as working as a team, work ethic, and attendance: things that are not necessary “taught.” Employers are finding that potential employees are qualified on paper but not trained with appropriate skills. One employer featured in this article, Tim Wenzel, president of Winegar, Inc., said “we hired based on work history, soft skills, and what we perceive as their ability to learn new skills.” So the lack of training in a field does not seem to be the particular problem but perhaps a mismatch of skills between the workforce and the goals of potential companies. If this is the case, industry leaders may find it helpful to communicate needs and goals to those looking to enter into the industry, or particular company. This may even start at the high school or college level.
The major challenge seems to be finding workers with the right skills to assist the economic recovery and bring the long-term unemployment from a deepening hole, yet so far, that challenge has not yet been met. A look at a few numbers can illustrate the crisis. Two reports published by the National Institute of Standards and Technology (NIST) and Mckinsey Center for Government
found that 45 percent of US employers say lack of skills is a common reason for entry-level vacancies, and middle and high skills jobs are experiencing the largest gaps. As a result, these industries are shrinking. The manufacturing industry, for example has shrunk one-third of its size during the last decade, losing approximately 4 million jobs. Within this industry, 67 percent of manufacturing executives surveyed reported a moderate to severe shortage of qualified workers, and 56 percent anticipate a shortage of qualified workers to worsen in the next three to five years, and this is a look at just one industry.
This skills gap not only affects shrinking industries, it also affects our national economy. A recent article published in The Slate Journal-Register
stated that “Federal spending on unemployment benefits was estimated at $99 billion for the federal fiscal year ending on September 30, 2012,” up from the $33 billion from before the 2010 recession, but down from $159 billion during the recession. The problem is that long term employment forces workers to postpone schooling or training needed to learn important job skills. The cost of the gap is huge, and long-term effects have yet to be felt. In this same articles, the author predicts that $10.3 billion will be spent in unemployed insurance claims, $17.6 billion in lost income taxes, and $6.6 billion in lost corporate taxes. As an ominous word of warning, many experts believe that “without an aggressive public and private investment in job retraining, there will be a permanent underclass of workers, trapped in low-skill, low-wage jobs.” So, while no one seems to have the answers to close this gap, the answer may lie in more basic job training programs focused on the changing needs of industries.