AXIOS Blog

Unemployment at Record Levels; Employers Struggle to Find Employees - What?

  

  

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In recent months there has been a divergence in the message we have been receiving from employers and potential employees.  A few years ago, while many IT positions were still in short supply, most other positions had plenty of qualified candidates and employers could take their time and find the best fit for their organization.  Today, despite persistently high unemployment figures, employers bemoan of the dearth of qualified candidates.  What's up?

Job Seekers

One of the hardest parts of the re-employment process is realizing that the wage you become accustomed to earning probably isn't available in your area of expertise unless you are in a high demand field like some IT positions.  Even in these positions, many employers are not paying the true market rate for talent, creating a perceived shortage - no real shortage, just no candidates at the rate they want to pay.  In lower demand fields, wages have adjusted down based on perceived supply, and in others, in response to global wage pressures.

While domestic companies are some of the most productive and efficient in the world, global competition has upped the game and continues to put additional cost pressure on employers.  This is evident in both the local labor market, and in the collective bargaining agreements of the auto makers with their dual-wage tiers.

Due to these pressures, prospective employees are generally seeing lower wages for the same work they previously did.  Prospective employees balance these downward wage pressures against their current unemployment insurance (UI) benefits.  While UI benefits may max out at a little over $9.00/hour, most beneficiaries generally consider them to be tax free.  To be "even" in a full-time position, they can really only consider positions that pay at least $11.50, otherwise they are essentially taking "pay cut". UI benefits have become a fierce competitor in the current labor market as potential employees hope a betting paying position comes along before their extended benefits run out.  Until then, the motivation to get back in the workforce is not nearly as strong as it otherwise would be.

This does not even take into account the associated psychological barriers to returning to work doing the same or similar work for less money than you used to make.  The longer an individual doesn't work, the easier it is for that state to become the status quo.

Pro-active job seekers, especially those with some technical skills but a lack of formal training, would do well to seek specific skill training a local community colleges or technical centers.

Employers

Another variable in this equation is the lack of skilled trade workers in the high-tech manufacturing arena. Cuts in educational funding have created a lack of technical training in high schools, all while the press was lamenting the death of manufacturing, technical schools and community colleges shifted their focus from technical engineering and manufacturing to IT positions. 

For years we have been pushing high-school students into four-year programs. This has driven manufactering out of career consideration for many potential entrants, and has created the perfect storm for companys that need sharp, trained and technically competent machine builders, operators, CNC programers and the like.  This has also created a fair amount of the recent backlash (can you say “Occupy”) by educated individuals saying they can’t find employment.  There are only so many entry-level professional positions for individuals with liberal arts degrees.  The remaining jobs that they are overqualified for don’t exactly put a dent in the student loans, and force the individuals that might be able to fill those positions onto the sidelines.

Employers have not helped themselves by cutting back on training, apprenticeships, and being overly focused on the exact job skills or experience they need, versus finding technically competent candidates that can be quickly trained based on their needs.

Wages in these positions have generally held steady in recent years, but are beginning to climb as demand outstrips supply.  Employers will be balancing this with the cost pressures described above, and look for more ways to do more with less thru additional automation.  At the same time, employers need to be proactive about building their internal bench strength while forming partnerships with local career training centers.

There are no easy solutions, and compromise, as it often is, will be how we work out of this situation.  Job seekers must ensure they are technically competent for the types of opportunities our economy is creating and have realistic wage expectations when starting out.  Employers must also realize that  job training programs, technical training partnerships, and internal skills development are worthy investments to make, and possibly the only way to grow in a sustainable way.