Skilled Workers Shortage in the U.S.: Who’s to Blame?

Investing in employee development and encouraging talent mobility are two ways employers can address what some suggest is a “false skills shortage” in America

Peter Cappelli’s Wall Street Journal piece about “Why Companies Aren’t Getting the Employees They Need” drummed up a lot of fervent replies to the author and exposed the frustration associated with the chronic under-employment in the U.S. economy.

In the article (and a couple of follow-ups, including one in Human Resource Executive), Cappelli argues that the perception of a shortage of skilled workers in the U.S. is mere illusion. It’s not the fault of the national education system, but instead of employers and their hiring practices and failure to invest properly in employee skills and alignment.

Cornerstone’s recent survey, conducted with Harris Interactive, most notably found that employee churn could cost U.S. businesses up to $2 trillion next year. But beyond this startling problem with retention, our survey highlighted some other interesting underlying conditions that underscore some of Cappelli’s theories about the “false skills shortage” in America.

The first issue Cappelli points out is that U.S. employees don’t have the skills because employers don’t train them anymore. Apprenticeship and management training programs have disappeared, he writes, and on-the-job training is rare as well.

This certainly is supported by the data we pulled from the Harris survey, which found:

• Only 23% indicated that they are provided with tools, resources and/or a development plan to help them improve their performance; and

• A scant 7% indicated that they had been assigned a personal development plan to help improve upon their own performance (as an outcome of a performance review process).

Cappelli goes on to note that employers get nervous about making large investments in employee skill or career development when another company is likely to swoop in with better wages and hire them away. This is a justifiably disconcerting notion to employers and may help to explain some of the fear of investment in development programs.

Employees will always be very responsive to monetary compensation, naturally. Could I be swept from my post here at this noble blog if someone came around waving a big stack of money? Maybe. Who’s offering?

But when it comes to matters of employee retention, employers have to use the tools at their disposal. Employee engagement and happiness start with being a great place to work. It continues with offering employees a clear sense of alignment with the business and a sense of possibility within the organization – “Is what I’m doing for this company making any difference whatsoever?  Why am I performing these tasks?  And where can I grow internally if I can demonstrate success in this role?”

This theme, too, is carried forth in our survey findings:

• Of employed U.S. adults who have experienced their employer’s performance review process, only 28% said they are given a clear understanding of how their job performance impacts their employer’s business results. 

Finally, and really pulling together the other points above, Cappelli notes that one way out of this perceived shortage of skilled labor is for employers to focus on promoting from within.  As he says, “Employees have useful knowledge that no outsider could have and should make great candidates for filling jobs higher up.”

This type of internal talent mobility is absolutely in the sweet spot of the ongoing conversation in talent management today. Using process and technology to get the best from your current employees and to ensure that they have opportunities to find the right roles in the organization that make best use of their evolving skills.

Unfortunately our survey data paints a bleak picture of how well employers are faring on this score:

• 49% feel their current employer isn’t invested in their career growth; and

• Only 20% have established career goals with their manager/employer.

We encourage you to learn more about our survey. It’s not all so dire, but it does cast light on some real areas of opportunity for employers, especially in a time when so many are concerned with Cappelli’s illusory skills shortage.