Are Skills Scarce?


by Alessia Leibert

If 2012 saw the biggest increase in Minnesota job openings since 2005, not all opportunities led to job creation. Some employers faced difficulties filling vacant positions, while others were still reluctant to commit to hiring and preferred waiting for the ideal job candidate to come along. The apparent contradiction between the availability of jobs and the inability of employers to fill them led some commentators to point to “skills gaps” as a major constraint to employment recovery after the Great Recession.

 

There are other reasons that vacancies may go unfilled, however, including factors unrelated to candidates’ skills. These include things such as uncompetitive compensation packages, undesirable work locations, or simply the lack of urgency in hiring due to uncertainties about future demand for goods and services.

 

A new DEED study found that hiring difficulties vary considerably across occupations, industries, and educational requirements, and the lack of skilled candidates is only one of many factors that affect employers’ ability to fill positions. Key findings and highlights are:

  • Most hiring difficulties did not prevent employers from successfully hiring. A majority (64 percent) of positions reported as hard-to-fill were successfully filled about two to eight months after the job was posted.
  • Among hard-to-fill positions, just one out of three (33 percent) were uniquely attributed to the lack of qualified candidates. The majority (54 percent) were perceived by employers as driven by a blend of skills mismatches, unattractive demand conditions (like wage and work shifts), location mismatches, or competition from other employers to attract experienced workers.
  • Hiring difficulties varied considerably across occupations, with the highest concentration being in production occupations.

 

Overall, research results suggest that hiring difficulties are not synonymous with scarce skills, and other factors must also be addressed if the goal is to match workers with available job opportunities. After the job losses of the recent recession, some sectors of the economy are under pressure to meet pent-up demand by adding staff, but have been hesitant to make demand conditions more attractive. Competition among firms for experienced workers, especially in manufacturing, might put upward pressure on wages and push employers to invest in internal training in the form of apprenticeships, mentorships, or scholarship programs in partnership with local colleges. These changes will hopefully send a strong signal to job seekers, encouraging them to seize these job opportunities, relocating or taking less than ideal jobs in exchange for developing the experience and skills that will make them more marketable in the future.

 

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