With an unemployment rate that hasn’t dropped to 6% in nearly five years, why are companies struggling to fill key positions? Last week, Skills for America’s Future, a policy program of the Aspen Institute, and Grainger, a broad-line supplier of maintenance, repair and operating products, hosted a roundtable discussion on workforce challenges in the skilled trades and why technical requirements can lead to scores of open jobs on a firm’s website.
“Finding people who know how to do the work that needs to be done in our industry is becoming an issue of growth and it’s becoming an issue of productivity,” said Jim Ryan, president, chairman and CEO of Grainger.
Ray Suarez, senior correspondent for PBS’ NewsHour, moderated the event, which was hosted at the Aspen Institute. “What challenges,” he asked Ryan, “are employers facing in filling open positions?”
“They’re asking the existing workforce to work longer,” Ryan said. “The average age for a highly skilled machinist or highly skilled tradesperson in manufacturing is 56-years-old. Average age for someone working in a manufacturing plant is 44-years-old. So the workforce is aging, and if you’re working an aging workforce harder, odds are that they’re going to get hurt more often …”
A culture of asking workers to do more with less, Ryan says, creates one full of holes. The main problem is skill sets when it comes to finally filling vacancies.
Yonnie Leung is senior manager for workforce development at Pacific Gas and Electric Company. Why, Suarez asked her, does a company like PG&E have so many open jobs at a time of such high unemployment?
“[Employers] need to make sure we work closely with our suppliers, in this case education institutions, to actually bridge the gap,” Leung said. “It’s important that we are at the table as an employer to work on filling those jobs that we have open. There’s less of a focus on technical education, both at the high school and the community college level, and it’s our job as employers to get involved with that.”
But training is only part of the problem, though possibly the biggest part. Attracting people to the skilled labor force in the first place is important, and Suarez pointed out there may be “imperfect networks of information” when it comes to connecting the right candidate to the right position.
“Nobody really thinks about utility jobs anymore,” Leung says. “There are a lot of good-paying jobs in the utility space, starting at about $50,000 a year, for a job where you can do without a four-year degree, possibly even without a two-year degree.” But, she added, getting that information to prospective employees isn’t happening effectively enough.
“I hear, in plenty of workforce debates, that schools are not sending us the right people,” Suarez said. “We’re not training people for the jobs that actually exist.” He turned to Bryan Albrecht, president of Gateway Technical College in Wisconsin, for comment.
“Oftentimes we don’t have the right information about what skills are required for [jobs that are actually available,]” Albrecht said. “So that conversation has to happen between our employers and our schools to make sure we’re teaching the right types of equipment, the right skill sets, so that they’re competitive once they do go into the marketplace.”
Sixty percent of the available jobs, he said, require some kind of post-secondary education and “the identification of what those credentials are and how they align with the expectations of the industry is what community colleges are designed and working toward.” Albrecht and Ryan both called the skill gap a local problem and encouraged local solutions between industry and educational institutions.
“Our effort,” Albrecht said, “is to build relationships, public-private partnerships, work with employers like Grainger, to make sure we have constant a dialogue about what is changing in the industry and how we can keep competitive on an industry level.”
At least one panelist, however, rejected the idea that there even is a real labor shortage from employers’ side of things. Peter Cappelli, director for the Center for Human Resources at The Wharton School of the University of Pennsylvania, said “if you hear from jobseekers, they think this whole conversation is insane.” If companies were truly hurting, he says, they’d fix it.”
“If you look at machinists,” Cappelli said, “the rate of pay for machinists has declined 40% over the last 20 years. And in none of these areas where they are apparently labor shortages are wages going up at all. And if you remember anything from economics, from those eight o’clock in the morning classes, you remember that, if there’s really a shortage, prices should rise, but they’re not rising, they’re falling.”
Cappelli gave the example of the couple on a home-seeking reality show: They have a wish list, a budget and a general location. If, given the options available, the couple goes to the host of the show and says nothing meets their needs, the host isn’t going to going to throw up his hands and cry housing shortage.
“The host says you’ve got to lower your expectations or raise your budget,” Cappelli says.
To read more from the Aspen Institute skilled labor discussion, including details from the panelists on avenues for improvement, check out Tuesday’s inBrief.
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