Are Skills Really That Scarce?

August 30, 2012

by Joanne Sammer

Is the skills gap for real?
It depends on who you ask.
In his book, "Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It," Peter Cappelli, a professor of management and director of the Center for Human Resources at the Wharton School of the University of Pennsylvania, suggests that there are plenty of skilled workers available. The problem is that companies have made it harder than necessary for themselves to find and hire these individuals. Interestingly, Cappelli, an HR expert, points to the finance department for causing at least some of the problem.
In a recent Wharton podcast, Cappelli notes that companies have no one to blame but themselves if they cannot find skilled employees. After all, companies control everything about the hiring process. “They set the rate of pay, which helps determine how attractive the job is, and then they handle the selection part where they look at the applicants and sort them out,” he says. Yet, despite high unemployment and a large pool of potential employees, companies are not satisfied enough with these applicants to hire people.
Cappelli lays some of the blame on finance, more specifically, companies’ accounting systems. He notes that these systems can tell the cost to employ someone but they do not adequately measure the value of the contributions someone would make by filling that position. “In most companies, given their accounting systems, it actually looks like they’re saving money by keeping positions vacant,” he says. “If you think that’s the story, then you’re obviously in no rush to hire.”
Adding to the problem is that companies are unwilling to invest in training new employees. Instead, they are looking for people who already have the desired experience and skills. “Everybody wants somebody with three to five years’ experience,” says Cappelli. “What they’re really after are the skills that you can’t learn in a classroom, that you can only learn by doing the job itself.” He once again points to accounting systems that do not provide companies with information on how much it would cost to train someone based on their existing skill set. “[Employers] have no idea whether they’re actually saving money by trying to chase these people who already have jobs and hire them,” says Cappelli.
Cappelli notes that part of this reluctance to train employees stems from concerns that employees will simply take those newfound skills to another employer. “There are ways that you can train and recoup the benefits of it,” he notes. He points to the apprenticeships of the past and to the training received by doctors, accountants and consultants. The employers in those professions have long ago figured out how to profit from these employees’ efforts as they are being trained on the job, even though they frequently leave once they have the requisite experience and skills. “Almost any employer could do something like this, but there’s just a kind of knee-jerk reaction that says, ‘We’re not going to do it at all,’” he says.