Last fall, we pondered the question of why unemployment remains so persistently high, while at the same time, openings at companies are reaching all-time highs.
This weird gap persists. The official current unemployment figure, calculated by the US Department of Labor, stands at 9%, and the estimate including discouraged and underemployed workers is at about 16%.
However, corporate job listings are going strong, and corporate layoffs are at their lowest levels in a decade. The US Labor Department reported as of November, the latest month data is available, there were 3.2 million job openings across the country. The last peak was 4.8 million in the first half of 2007, BLS says. Monster.com just said that the U.S. Monster Employment Index recorded another month of positive year-over-year growth during January with a growth rate of seven percent. In addition, all 28 metro markets record positive annual growth last month.
In the meantime, Challenger, Gray & Christmas, which has been tracking corporate downsizings since the early 1990s, said January’s pace of job cuts was a record low for the month. “The slow pace of downsizing that marked the second half of 2010 appears to be continuing into 2011, as employers announced plans to cut 38,519 jobs in January,” the consultancy says.
The Washington Post’s Michael Fletcher recently visited the city of Fresno, California, and saw the paradox in action, with high unemployment amidst growing skills shortages:
“This city is grappling with one of the most troubling contradictions of the new economy: Even as it has one of the nation’s highest unemployment rates, it has thousands of job openings…. Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste.”
The Post article blames the recession, exacerbated by structural changes in the economy, which requires greater technology skills and specialization. Many of the workers who lost their jobs in the recent downturn may lack or have lost their edge with skills needed coming out of the recession:
“Switching fields often isn’t as simple as taking a class or two. In the coming years, the nation’s workforce is going to need many more workers with college degrees and industry certifications, according to a report last year by Georgetown’s workforce center.”
In the case of Fresno, there are up to 60 companies that make highly specialized products, from “irrigation components that provide exact water flows, allowing uniform crops with minimum water use. The region is also a center for filtering and other control systems for all types of liquids.” Those companies have always struggled to find qualified employees, the Post adds, noting this puts many at a competitive disadvantage.
Fresno is a microcosm, and companies across the world that are unable to recruit the talent they require will suffer in a hyper-competitive marketplace. This has become the number-one concern of CEOs, as cited in the recent PricewaterhouseCoopers survey on competitiveness.
The question is: how to resolve this disconnect — a large pool of unemployed and underemployed people on one side, and companies starving for skilled talent on the other. The Post article says many schools and community programs intended to update skills are underfunded and lagging.
Employers, educational institutions, and policymakers needs to recognize that the economy has changed dramatically, even just in the three years since the downturn began. As the economy accelerates into growth mode — and it will — companies are going to be hurting for talent to enable them to compete in a hyper-competitive global economy. The skills shortage is growing, even in the midst of a period of high unemployment. Imagine how things will tighten up as unemployment drops. Training, retraining and lifelong learning are more urgent priorities than ever before.