Ask a CEO what worries him or her most and they may sum it up in one word: people. As the U.S. economy continues its recovery, corporate leaders have serious concerns about the American workforce.
Mark Ferguson, CEO of CareerBuilder, admits he has concerns and his presentation at the 2015 SHRM (Society of Human Resource Managers) Conference made it clear he isn’t the only one.
A survey, conducted by Harris Poll on behalf of CareerBuilder, asked a nationwide pool of corporate leaders what workforce challenges were keeping them up at night. The gap between skills needed for positions and the actual skills possessed by current employees or candidates was a common theme.
CEOs are worried about an aging workforce — approximately 44 million people are now 65 or older, a number that’s projected by the Census Bureau to double by 2050. The flip side of that concern: Younger people entering the workforce may lack the occupational skills necessary to fill in the gaps left by retiring Boomers.
According to the CareerBuilder/Harris Poll survey, almost half of U.S. CEOs identified “lack of skilled candidates” as their top recruitment challenge. And being unable to find candidates with the right skills isn’t just inconvenient…it can cost a company a lot of money. In fact, the survey found that “one in six companies loses $25,000 or more per open position due to extended vacancies.” That’s a multi-billion dollar problem for American companies.
At a time when the U.S. is slowly recovering from a long period of recession in which millions of workers lost their jobs, it may seem strange that companies can’t find people with the skills they need as they begin to hire again. However, as James Bessen pointed out in the Harvard Business Review, it’s not that companies can’t find people willing to work. They just can’t find people with the skills necessary for the jobs they need filled today.
“There are not major shortages of workers with basic reading and math skills or of workers with engineering and technical training,” writes Bessen. “If anything, too many workers may be overeducated. Nevertheless, employers still have real difficulties hiring workers with the skills to deal with new technologies.”
Why aren’t workers prepared to deal with new technologies? The answer, according to Bessen, is education and on-the job experience. “New technologies frequently require new skills that schools don’t teach and that labor markets don’t supply.”
An unprepared workforce is a problem. And the answer isn’t likely to come from the academic or business worlds — it’ll have to come from both.
Secondary and higher education systems may find opportunities to create more work-relevant curriculum by partnering with organizations within various industry disciplines.
In addition, companies can improve their own on-the-job training. This can include bolstering formal professional development activities created by the organization or in cooperation with executive education programs from local universities.
Simpler, less resource-heavy options exist, too:
Bridging the skills gap is quickly becoming an imperative, not a luxury, for businesses and academic institutions. Those that make it a priority — the ones willing to commit the honest resources and brainpower to solving the problem rather than waiting for employees to simply get “smarter” — will reap the benefits. Those who don’t may very well end up footnotes in a dusty cautionary tale.