http://www.upenn.edu/gazette/0113/feature2_1.html
As America strives to regain its economic footing, good people can�t
find work even while companies struggle to find employees. How can
this be happening? Wharton�s Peter Cappelli has a provocative answer.
BY TREY POPP
On the morning of November 6, 2012, as Americans filed into voting
booths at the end of an election campaign waged largely on the issue
of jobs and the lack of them, the US Bureau of Labor Statistics
released its regular monthly report on job openings and labor
turnover.
The JOLT report is a crude measure of employment trends. Unlike the
unemployment rate or the weekly tally of jobless claims, it sheds no
light on the travails of people looking for work. But the November
edition (which reported on September data) contained a statistic bound
to madden many job seekers. It was the number of unfilled job openings
as of the last business day of the month: 3.6 million.
That total was �essentially unchanged� from the month before.
There are a number of ways to interpret, or misinterpret, that figure.
The 3.6 million jobs that were available at September�s end weren�t
just the same ones left over from August. The number of new hires was
even greater in each of those months, as was the number of
�separations.� There�s a lot of churn in the labor market.
In one sense, those 3.6 million vacancies were a positive sign. The
number of positions available had steadily climbed from its nadir in
July 2009, when there were just shy of 2.2 million. So at least
businesses seemed increasingly inclined to hire. And not just at
fast-food counters. There were some 650,000 posted opportunities in
professional and business services, well over 200,000 in
manufacturing, and nearly 600,000 in trade, transportation, and
utilities.
Yet for every one of those openings, there were still somewhere
between three and four unemployed Americans eager for work�or nearly
six, if you counted people working part-time because they couldn�t
find a full-time job. And in that light, you could forgive a
resume-scattering job hunter for perceiving something mysterious�if
not vaguely menacing�about the idea that 3.6 million jobs were,
theoretically at least, there for the taking.
In fact there is something pernicious going on, because another thing
is happening at the same time. A lot of job openings are going
unfilled, and when American employers are asked why, their most common
answer is a lack of qualified applicants.
You�ve probably heard this before. The idea that a �skills gap� is
what ails the US labor market has become so widespread as to achieve
one of the rarest conditions in contemporary American life:
embracement by both political parties. As Mitt Romney put it in a
campaign document: �One of the troubling features of the American
economy today is the mismatch between the skill set of the American
workforce and the requirements of the employment market. The gap
between the two lies at the heart of our jobs crisis.� The GOP
candidate might as well have quoted President Obama�s 2012 State of
the Union address: �I also hear from many business leaders who want to
hire in the United States but can�t find workers with the right
skills. Growing industries in science and technology have twice as
many openings as we have workers who can do the job.�
There�s just one problem with this idea, according to longtime Wharton
professor Peter Cappelli. It may largely be a myth.
Peter Cappelli
Cappelli, the George W. Taylor Professor of Management, is a
connoisseur of job-hunting stories gone wrong. One of his favorites
was related to him by someone in a company whose staffing department
failed to identify a qualified candidate for a �standard engineering
position��out of 25,000 applicants. Another comes from a software
developer who was turned down for a job that involved operating a
particular brand-name software-testing tool�despite the fact that he
had actually built just such a tool himself. Adding insult to inanity,
another time he was deemed unqualified because �I didn�t have two
years of experience using an extremely simple database report
formatting tool, the sort of thing that would require just a couple
hours for any half-decent database wrangler to master.�
Even if your own employment situation is rosy, you could probably add
similar stories of your own. Perhaps it�s a spouse in mid-career
transition who keeps running up against web-based applicant-management
systems that request irrelevant minutia like high-school GPA. It could
be a sibling flummoxed by an inflexible offer for an advanced-practice
nursing job that pays less than an entry-level RN can make doing shift
work. Or maybe you�re despairing over your daughter�s chances of
scoring an unpaid internship as a stepping stone to full-time work�in
which case, don�t read the next sentence. According to Penn Career
Services director Patricia Rose, internships have become the hottest
new items at elite prep-school fundraiser auctions, where parents are
literally buying plum summer positions for their kids.
Anecdotes like these, Cappelli says, are just the tip of an iceberg of
troubling data. In his latest book, Why Good People Can�t Get Jobs:
The Skills Gap and What Companies Can Do About It (Wharton Digital
Press, 2012), he explores America�s dysfunctional jobs market and
concludes that the skills gap�at least as it�s most commonly
formulated (�Schools aren�t giving kids the right kind of training.
The government isn�t letting in enough high-skill immigrants. The list
goes on and on�)�isn�t really to blame.
�The real culprits,� he contends, �are the employers themselves.�
Cappelli has studied labor markets, and this aspect of them in
particular, from just about every imaginable angle. In the late 1980s
he worked on the US Secretary of Labor�s Commission on Workforce
Quality and Labor Market Efficiency. In the 1990s, he co-directed the
National Center on the Educational Quality of the Workforce within the
US Department of Education. For a period during the 2000s, he was
senior advisor for employment policy to the Kingdom of Bahrain. He�s a
distinguished scholar at Singapore�s Ministry of Manpower. At Wharton,
where he has been a professor since 1985, he directs the Center for
Human Resources.
Why Good People Can�t Get Jobs is essentially a story about human
resources�how companies succeed and fail at finding and retaining
talent. The book (and the larger body of research behind it, which he
delved into in a wide-ranging conversation for this article) contains
lessons for employers, advice for job-seekers, and important
implications for policymakers.
Perhaps the best place to start is with the humans themselves. What
skills do companies really want from them, anyway? And are American
firms facilitating the acquisition of those skills�or standing in the
way?
On Skills and Schooling
The notion that America�s education system is failing to equip the
workers of tomorrow is at least as old as the seminal 1983 government
report A Nation at Risk, which memorably quipped, �If an unfriendly
foreign power had attempted to impose on America the mediocre
educational performance that exists today, we might well have viewed
it as an act of war.� Today�s CEOs regularly blame schools and
colleges for their difficulties in finding adequately prepared
employees. The complaint shows up in survey after survey, as Cappelli
shows in his book, and it is substantially more common among American
employers than their peers in most other developed and developing
economies.
But do these surveys �show that the United States is among the world
leaders in skills gaps,� Cappelli asks, �or simply in employer whining
and easy media acceptance of employer complaints?�
He thinks a body of lesser-reported studies contains the answer. �If
you look at the studies of hiring managers and what they want, they�re
not complaining about academic skills,� Cappelli says. �You hear the
business spokespeople saying this, but the actual hiring managers are
not saying this now. And in fact they�ve never, in modern times, said
that.�
In other words, there�s a disconnect between the people who actually
do the hiring and the C-suite executives who get asked about it.
�The spokespeople at the very top don�t know what�s going on,�
Cappelli argues. �But there�s a popular story that explains what�s
going on, and that story is: schools are failing.�
Cappelli reckons there are two main reasons this story has staying
power. �One reason it�s popular is that it allows you to advocate for
school reform, which sounds like a socially desirable sort of thing to
do. And so all these different groups like this story [too], because
it works for the people who like to think that they�re interested in
reforming society and improving education. What�s not to like about
that?
�It also works for employers who are saying: This is not our problem.
It�s a problem the public sector ought to solve for us. They ought to
get better at providing the things that we need, and then we don�t
have to do anything�we don�t have to train, we don�t have to adjust
our expectations.�
The problem with the story, Cappelli says, �is there�s no evidence for
any part of it.� And what�s more, it�s hurting the very companies that
espouse it.
More on that second point later. Before we get there, what are hiring
managers complaining about? For the most part, Cappelli says, work
attitudes and lack of on-the-job experience�neither of which can be
fairly laid on schools. When you dig deeper into the surveys of talent
shortages, a similar theme emerges. Cappelli notes that the top 10
hardest-to-fill jobs globally in 2011, according to a well-regarded
survey from the Manpower Group, included positions such as laborer
(�about as unskilled a job category as we can get�), production
operator (�a factory job, typically semiskilled�), technician and
skilled trade (�those skills are learned largely on the job�), and
sales rep.
Of the top 10, he reckons that engineers and accounting/finance
workers learn their skills largely in college classrooms. The same is
probably true now of IT staff�but wasn�t always, which brings us to
another of Cappelli�s insights.
The Home Depot Syndrome
In a 2011 op-ed article for The Wall Street Journal, Cappelli remarked
on a telling statistic from the Silicon Valley tech boom of the 1990s:
only 10 percent of the people in IT jobs had IT-related degrees. But a
lot of the same people would probably have a hard time landing similar
jobs today, because employers have increasingly adopted what Cappelli
calls �a Home Depot view of the hiring process, in which filling a job
vacancy is seen as akin to replacing a part in a washing machine.
�We go down to the store to get that part,� he explains, �and once we
find it, we put it in place and get the machine going again. Like a
replacement part, job requirements have very precise specifications.
Job candidates must fit them perfectly or the job won�t be filled and
business can�t operate.�
The problem with this approach, he says, is that �unlike a machine
part, no perfect fit exists between applicants and job requirements.�
In his book, Cappelli cites a series of studies by the National
Institute of Economic and Social Research in London that investigated
how companies �making almost identical products but operating in
different countries got their work done.� US firms used more engineers
and unskilled workers, for instance, than German firms, which relied
more heavily on skilled craftsmen. In other words, there are multiple
ways�and multiple kinds of employees a company might rely on�to
accomplish a given task. Narrowly drawn job criteria may be a sign
that a company is ignoring possibilities for alternative, and perhaps
even more effective, operational strategies. To the extent that they
slow down the hiring process, a company might stand to benefit from
adopting a more flexible approach to hiring.
There�s a simple lesson there. �When employers have a vacancy to
fill,� Cappelli writes, �they have many options for filling it.� That
sounds like common sense, but it runs us smack into a new reality of
the contemporary hiring process: common sense is exactly what
software-based hiring systems lack.
The Software Ate My Job Application
Remember the story about the company that couldn�t find a
garden-variety engineer out of a deluge of 25,000 applicants? Is such
a thing really possible?
More possible than you might think, Cappelli says.
If you�ve applied for a job through a web-based interface that
requests everything from your most recent job title to your Excel
proficiency to your grades in high school, you may have discovered
this the hard way. In many common applicant-screening programs, each
question functions like a gate. If your answer to any of them doesn�t
fit the precise criteria set by the company, that gate slams shut and
the software deems you unqualified. Alternatively, some systems rely
on automated keyword searches of resumes, rejecting those that don�t
produce exact matches with job descriptions that are by turns overly
detailed or hopelessly vague.
It�s easy to see the natural tendency of a hiring manager to keep
tacking on questions or keyword criteria. The most important
credentials for a software engineer, for instance, might include
Microsoft certification, proficiency with JavaScript, and so many
years of experience. But why not specify a minimum typing speed while
we�re at it, or a cut-off point for high-school GPA? All it takes is a
click.
In this manner, a company can hamstring its own applicant search
pretty quickly�even if its job posting draws 25,000 responses. �All
one needs for that to happen are 14 requirements in the model just
discussed, many fewer if some hurdles are highly specific,� Cappelli
notes. And as crazy as it sounds, mundane choices like how a
job-seeker formats his resume can also hurt his chances.
(For Cappelli�s advice on �beating� the software, see sidebar.)
Not everyone shares Cappelli�s view of software-based hiring. Gary
Truhlar WG�74 is the executive director of human resources at Penn,
which is the largest private employer in Philadelphia.
�When I first came to Penn, we would post job opportunities on seven
bulletin boards,� Truhlar recalls. �They were xeroxed, behind date,
and physically posted on bulletin boards�so if you weren�t on campus,
you didn�t know about those jobs. We would run a small subset in the
Inquirer, but that�s very expensive. So the good side of the
technology, posting on the web, is that as soon as HR knows about the
job, the world knows about the job.�
That translates into a broader and more diverse applicant pool. Job
postings at Penn frequently attract 300 or more candidates. The
dramatic expansion of applicant pools has presumably led to a more
talented workforce.
�The downside,� as Truhlar points out, �is that anybody can apply for
anything. So, Peter�s work notwithstanding, you�ll have a secretary
applying to be a vice president.�
Penn uses a web-based applicant management system to handle the
volume�but, Truhlar stresses, not one that relies on keyword searches
or binary gates that stack the deck toward rejection. �We are
concerned that applicants are not eliminated because of the system
limitations created by certain application providers,� he notes. So
the system Penn uses�called PeopleAdmin�is designed to assign scores
to applicants, not simply render them qualified or unqualified. So
even if no one scores 100, a hiring officer can use the scores as a
starting point for making more nuanced judgments.
The notion that a firm hiring engineers would let 25,000 people apply
without finding one �stretches my imagination,� Truhlar says.
�We just filled a data-security and privacy position,� he adds by way
of example. �And you can kind of do the same thing. You can say, Do
you have five years of experience in the data security business? Do
you have Microsoft certification? And that�s terrific�that�s probably
absolutely what you need. Well, then you can make the mistake of
saying, I need Microsoft x.3.7, and I need Symantec version 8.2.1�and
that�s how you get into a situation where 25,000 people didn�t
qualify. And I would say those HR people are useless, if that�s all
they�re doing is a keyword search and they can�t find anybody.�
Cappelli would agree, but perhaps go one step further by noting what
he sees as a major reason HR departments don�t succeed: the
departments themselves have been driven to the brink of extinction.
Human Resources in Bad Decline
�One of the things which is a great puzzle,� Cappelli says, �is that
50 years ago in the US, most big employers were much more
sophisticated about hiring than they are now. So they�ve actually
gotten worse at this.�
The body of knowledge about what predicts job performance goes back to
World War I, Cappelli says, �and it�s just being systematically
ignored.�
Take the case of high-school GPA. �We know something about this!� he
says. It �predicts nothing about your job performance�especially 30
years later. Why are they bothering to ask that? We know it doesn�t
work.�
He has a ready answer to that question: �the gutting of the
human-resource function�cutting people out, cutting staff out. The
people who were trained in this stuff, and used to know it, are all
gone now.�
This is arguably the product of systemic changes to the US labor
market that gained pace in the 1980s. As high unemployment rates from
the late 1970s persisted into the following decade, companies
increasingly had at their disposal a labor pool that was more
experienced than ever before.
�A generation ago you had to hire out of college and train people,�
Cappelli explains, singling out firms like IBM and General Electric,
which aimed to retain employees for life. �Nobody hopped jobs. But as
companies started to lay people off, and there were lots of skilled
people around and lots of white-collar workers, lots of managers, you
could sort of hire whoever you wanted. It wasn�t very hard. So you
maybe didn�t have to be that sophisticated at recruiting and
selection� anymore.
Some of the pressures that touched off the cycle of layoffs are well
known, like increased global competition, and the perceived need for
companies to respond more nimbly to changing consumer preferences
(which could make replacing employees seem more efficient than taking
the time to train them). But there are other salient factors that are
underappreciated. Cappelli outlined one in a 1997 volume titled
Changes at Work, in a chapter co-written with Wharton�s Michael Useem,
now the William and Jacalyn Egan Professor of Management: the growing
concentration of stock ownership among large institutional holders,
like pension funds.
Traditionally, such investors expressed dissatisfaction with a
company�s performance by simply selling their stock. But with the rise
of indexed holdings�in which funds are invested according to preset
formulas (for instance, mirroring the composition of the S&P 500)�and
the sheer size of share blocks under ownership, it became harder for
big institutional investors to shed unwanted stock positions.
Consequently, they instead began pressuring companies to change, with
a narrow focus on driving up share performance over shorter time
periods.
�Institutional holders were now quicker to insist that the company
find new strategies and structures to produce,� Cappelli and Useem
noted. �And the formulas they found concentrated on restructuring the
companies and slashing jobs. One study of share-price reactions to
company layoff announcements from 1979 to 1987 illustrates the thrust
of the investors� message for would-be restructurers. In the days
immediately following layoff announcements announced as part of
general restructurings, stock prices rose an average 4 percent.�
Concurrently, the ranks of experienced job-seekers swelled, making
decisions to fire still easier to justify, since the labor market was
flush with talent. This dynamic persists today�with a perverse twist.
Waiting for Superman
In the olden days, as Cappelli sketches them, HR departments served as
�reality testers.� Say a line manager at a big firm got permission to
hire a new worker. �He�d say, �We need somebody with an MBA for this.�
And the HR people would say, �You really need an MBA degree for that?
Are you sure? What�s important in this job?� � They�d be pushing back
a bit in terms of the job description.�
This injected a degree of flexibility into job criteria.
�Those guys are gone now,� Cappelli continues. �Now the requisition
often goes automatically to somebody who inserts it into the
applicant-tracking system. So they kind of take the wish list from the
hiring manager, who is often looking for Superman�the Purple Squirrel,
as they say in IT�something that doesn�t exist.�
Unless maybe it does, what with all the talent among the ranks of the
unemployed. When there are three or four job-seekers for every
vacancy�and some postings draw applicants by the hundred�firms have an
understandable incentive to wait for a dream candidate to show up. And
ideally, a dream candidate who expresses a low salary requirement.
In that Manpower survey, 11 percent of the employers reporting skill
shortages chalked it up to applicants unwilling to accept job offers
at the wages companies were willing to pay.
�Given what we know about the difficulty all respondents have in
recognizing problems that are actually their own fault,� Cappelli
writes, �the real percentage of employers who have difficulty hiring
because they are not offering adequate wages is likely to be much,
much higher.�
He cites the case of a parts-supply company whose inability to fill 40
machinist vacancies had been estimated to be dragging sales down by 20
percent. �The jobs reportedly paid $13 per hour, which might sound
good. But the Bureau of Labor Statistics reports that the average wage
for such jobs is more than $19 per hour,� Cappelli notes. �Would that
have had some effect on the companies� ability to find candidates? You
bet.�
But, again, that has little to do with a skills shortage. �A real
shortage means not being able to find appropriate candidates at
market-clearing wages,� Cappelli noted in The Wall Street Journal. In
his book he adds, �When I hear stories about the difficulty in finding
applicants, I always ask employers if they have tried raising wages,
which in many cases have not gone up in years. The response is
virtually always that they believe their wages are high enough.�
And Waiting�
As the case of that parts-supply company shows, there is often a cost
associated with letting positions remain vacant. But most of the time
it�s hard to quantify�whereas the benefit of not paying another salary
is as clear as day. That�s another source of grit in the gears of
hiring.
In one sense, you can trace it all the way back to what typically
spurs companies to post job openings in the first place. It is not, as
an economist of the rational-choice school might suppose, a
determination that a new worker will add more profit than expense to
the balance sheet. Arguments to hire, Cappelli says, �mainly come from
people complaining about overwork.�
In some cases�perhaps especially when high unemployment keeps existing
workers docile�the complaints come from a company�s own customers.
Cappelli recently came across a financial-services company whose
retail customers were actually signing petitions asking the firm to
deploy more service people.
The prevailing approach among American companies, as Cappelli
characterizes it, has been, �Let�s just cut staff until we notice
blood. But part of the problem, too, is that the accounting systems
internally have not been sophisticated enough to notice when there is
blood.� He suggests that the development of performance metrics
capable of measuring the cost of lost opportunities, or of burnout
among existing workers trying to do two jobs at once, would redound to
the benefit of job-seekers and bottom lines alike.
Chris Ittner, the Ernst & Young Professor of Accounting at Wharton,
has a more skeptical view.
�In accounting, we don�t account well for intangible assets,
period�but with people especially,� he agrees. �Firms have a hard time
even finding out what kind of payback they get from training their
employees.�
But he deems it unlikely that American companies are suffering from a
collective failure to realize the moneymaking potential of ramping up
their payrolls. If profits in a given sector were being held down by
overly lean workforces, he suggests �there would be an arbitrage
opportunity.� In other words, you�d expect one or several companies to
accelerate hiring as a way to gain an advantage over their
competitors�and if that strategy panned out, their competitors would
likely follow suit. But there�s little evidence of that happening.
Ittner observes further that hiring is inherently risky.
�If you choose to hire, you�re stuck with that decision�because it�s
not that easy to fire people. And firms don�t want to make an
investment when there�s so much uncertainty about what will happen in
the future,� he says. �So you might be willing to accept the cost of
lost productivity or lost sales.�
A Blind Alley
In virtually every discussion about America�s jobs crisis, a familiar
solution is trotted out. If only we could get more people through
college�whether that means a bachelor�s or two-year associate�s
degree�we�d have a workforce matched to employers� needs.
On an individual basis, this advice holds water. College graduates
have substantially more success in the job market than their
less-schooled peers. (For Penn alumni, the picture is rosier still.
For a snapshot of how Quakers have been faring in recent years, see
chart). The Penn Alumni Career Network is another potentially valuable
resource:
www.vpul.upenn.edu/careerservices/pacnet.)
On a societal basis, however, there are good reasons to doubt the
efficacy of that prescription. Cappelli worries about over-education.
Citing survey data, he points out that many American workers have�and
have paid for�more education than what�s required by the jobs they are
doing. That can be viewed as a deadweight loss for the economy at
large, and it�s getting worse.
�In order to prove to an employer that you can do this job,� he
explains, �maybe you get an extra degree. So rather than two years
experience as a pharmaceutical rep, I go get a master�s degree in
pharmaceutical rep work. In Philadelphia, there�s a local business
school that has an MBA degree in pharmaceutical marketing, a highly
specific degree which you never would have seen a generation ago. And
it�s an expensive way to get the experience. It�s a time-consuming
way. And I�m sort of over-relying on academic institutions to get
this.�
From an employer�s perspective, this approach beats �growing all your
own talent,� as the IBMs and GEs of yesteryear did. After all, a
company invests in training its employees at the peril of having them
hired away by a competitor who avoids the expense. So even if it has
to pay a premium for a candidate who has an equivalent academic
credential, that makes more sense.
The problem, as Cappelli sees it, is that this dynamic has fueled an
�explosion of certifications� in the US, the majority of them provided
by for-profit organizations and vocational schools. Aside from the
incentive this creates for people to pursue more credentials than jobs
require, just to �muscle out� other job-seekers, Cappelli wonders if
there may be an underappreciated downside for the employers
themselves.
The rise of credentials as a basis for hiring �makes people more
plug-and-play,� Cappelli points out.
�You see, for example, in places like nursing and health care, where
credentials are everything now, that it makes it easier to pop new
people in and pop other people out. Maybe that�s a good thing. It does
mean for an employer, though, that everything becomes more like a
profession. And your ability to get things done differently might
become a little harder. And to get practices that are unique to you, a
little harder.
�For example, say I�m an IT person working in your company, and you�d
like me to get good at your legacy computing system. Should I do that?
What�s in it for me? It�s risky, because I�m going to spend a couple
years working on this system, and I don�t get any credential out of it
that�s useful elsewhere. So maybe I don�t even take that job�I�d much
prefer to work for less for somebody else where I get a credential at
the end, which is transferable.�
Part of the appeal of a �plug-and-play� approach to employers is the
sense that it affords them flexibility. �If we�re going to change our
products or change our strategy,� Cappelli explains, �we just get rid
of everybody, and then we�ll hire in a new group, with different
skills.�
Yet �some of this is not completely demonstrated by evidence,� he
adds. �A generation ago you would have heard companies like IBM talk
about how lifetime employment gave them flexibility�because people
internally didn�t resist changes. You would change your products, you
would retrain the people�off you go.�
Still, the rise of vocational certification leaves the brunt of the
risk on job-seekers. Cappelli has learned this the hard way, which is
perhaps ironic considering his area of expertise. When his own son
couldn�t find a job with his college degree in classics, he �looked to
one of the technical fields in health care that had been identified as
hot, where employers (the media assured) were struggling to hire,�
Cappelli writes. �He went back to school, at a community college, and
got a skills certificate in that field�only to discover that it was
not hot.�
If that fate can meet the college-educated son of a world-renowned
expert in human resources, it may be time for the rest of us to look
for another solution.
A Way Out
�The United States is at the moment the only country in the world
where the notion that employers are simply the consumers of skills is
seriously considered,� Cappelli declares in Why Good People Can�t Get
Jobs.
�The great puzzle for people outside the US in the workforce world,�
he adds in conversation, �is why we don�t have apprenticeship
programs. Every other industrial country has got them. And in the
countries that are emerging, like China, a big priority is to develop
these programs ... And we don�t have them.�
Nor are we likely to get them, he says�at least not at the national
level. One reason is the sheer scale of the US economy. �In smaller
countries in Europe,� Cappelli observes, �you could get the key
employers in a room together and say, �Okay, guys, we�ve got to step
up here.�� That�s impossible here.
But he contends that employers have a lot to gain from embracing what
you might call apprenticeship writ small.
�What employers are complaining they can�t find now are not things the
schools can deliver. They want work-based skills. They want the kinds
of things that you can�t learn in a classroom. How do you manage a
team of people? How do you implement this particular software? And we
shouldn�t expect the schools to try to do that. It�s not very
efficient. It�s much easier to teach somebody as an apprentice in the
field.�
He insists that the way forward for many employers is to relax job
requirements (or at least pry them from the vise grip of recruiting
software) and re-shoulder some of the training burden that they used
to assume�and that some firms still do, albeit in a slightly different
way.
�If you look at the consulting companies, for example, or around Penn
you look at the investment banks, they have very high rates of
turnover,� he notes. �The investment banks lose all their junior
analysts. And yet it works fine for them. Now, why is that? Because
they�re basically treating these folks as apprentices. They�re
learning a lot, but they�re learning as they are working and as they
contribute. So it�s a model of learning that�s different than the old
corporate model, where you�d start out with 18 months of classroom
training, and then after that we�d slowly give you work experience.
�At law firms, consulting firms, accounting firms, you start
contributing the day you arrive. And you�re learning as you go. So the
model can work, and you can see it all over the place in parts of the
private sector. And I think the parts that are not doing it have just
got to figure out how to incorporate that pay-as-you-go model. It�s
not rocket science.�
Similarly, he advocates tightening connections between employers and
schools by way of co-op programs and collaborations that integrate
classroom and work experience. Such arrangements in other countries,
and when they�ve been tried here, work wonders for everyone involved.
But �the constraint on building these arrangements has always been on
the employer side: how to get them to engage in these efforts when the
payoff to them is not immediate,� Cappelli writes.
�The present, debilitating disconnect between job supply and job
demand,� he adds, �suggests that the time has finally come.�
As he put it in a presentation at the 2012 World Economic Forum in
Davos, Switzerland, �The question for us � especially businesspeople,
is, What are we going to do?
�Will we stand back and expect our most important asset to simply show
up when we want it? Or are we going to get engaged in the supply chain
and try and do something to get the workers we want?�
Download this article (PDF)
Illustration by Graham Roumieu
WEB EXCLUSIVE:
A BRIEF HISTORY OF HIRING
Walter Licht on the skills gap and what
companies used to do about it.
�2013 The Pennsylvania Gazette
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