That’s the reassuring message Wharton professor Peter Cappelli has for job applicants trying to find work in today’s brutal hiring environment. Just before last Friday’s disappointing jobs report, Cappelli released a new book, Why Good People Can’t Get Jobs , that explodes the popular “skills gap” explanation favored by many corporate leaders and human resources consultants. That popular argument suggests jobs remain open despite a high unemployment rate because there aren’t enough people with the necessary skills to fill the jobs, and because of an education system that isn’t working.
But in his book, a follow-up to a Wall Street Journal opinion piece last fall, Cappelli pokes hole after hole in this argument. While it may be true in some cases, the prevailing reason qualified candidates aren’t getting jobs isn’t because schools have failed them. It’s not because they’ve chosen to get worthless degrees and skipped out on studying engineering. Rather, the real problem is employers themselves. “For people searching for jobs, [the book] is quite cathartic,” says Cappelli.
So how are employers the problem?
Cappelli points to many’s unwillingness to pay market wages, their dependence on tightly calibrated software programs that screen out qualified candidates, and their ignorance about the lost opportunities when jobs remain unfilled. These are three of the primary culprits for the disconnect between available jobs and unemployed workers. Yet he also blames employers’ lack of investment in on-the-job training at the same time they expect years of experience in any candidate. In a nutshell, Cappelli argues, the people at the top of many companies are relying on a “set of false assumptions” that all seem to fit together anecdotally. In reality, it is employers themselves who can play a very big role in the solution.
Take education, for instance. Yes, some American schools are failing, and when compared to education systems around the globe, our relative position is slipping. But Cappelli, who was the co-director of the National Center on the Educational Quality of the Workforce during the (elder) Bush and Clinton administrations, argues that this cannot explain the so-called skills gap. For one, he writes, studies have shown for decades that when employers are asked to identify deficiencies in high-school graduates, academic qualifications fall very low on the list, below skills such as punctuality, motivation and a strong work ethic. In addition, many studies of student performance have actually been improving: Dropout rates are lower, and math scores for 9- and 13-year-olds were better in 2008 than in any previous year, as was 9-year-olds’ reading proficiency.
Meanwhile, employers faced with both a deluge of applicants and staffing cuts in their H.R. departments have become more and more dependent on software programs that shut out perfectly qualified candidates. These programs are typically set up to search for keywords, thus screening out people who don’t have a very specific title or phrase on their resume, and often include questionnaires or algorithms that leave no room for error. H.R. managers, says Cappelli, nervous that the person they hire will fail, do little to push back on hiring managers who throw a kitchen sink’s worth of “key” job qualifications into the software, leaving plenty of opportunity for trivial criteria to weed out otherwise experienced candidates. “The software is a series of algorithms that are yes/no gates, and the way they’re typically set up, you have to clear all the gates to be considered,” Cappelli says.
As a result, jobs remain open that could be filled. For many managers, that’s fine, as they see an open position as a cost savings rather than a missed opportunity. “Organizations typically have very good data on the costs of their operations—they can tell you to the penny how much each employee costs them,” Cappelli writes, “but most have little if any idea of the [economic or financial] value each employee contributes to the organization.” If more employers could see the opportunity cost of not having, say, a qualified engineer in place on an oil rig, or a mobile-device programmer ready to implement a new business idea, they’d be more likely to fill that open job with a less-than-perfect candidate and offer them on-the-job training.
The lack of such training, and the Catch-22 that employers set up by not offering it but expecting all applicants to have experience, is a big part of the problem, says Cappelli. Management training programs are as rare these days as the three-martini lunch. And apprenticeships, which were common a generation ago, are rarely found today among U.S. employers. Cappelli quotes a 2011 Accenture study that found that only 21 percent of employees had received any kind of formal instruction in their jobs during the prior five years. Companies simply aren’t willing, he says, “to get someone less than perfect and train them.” Yet perfect, as they say, is the enemy of the good.
A final reason employers give for why jobs go begging: Employees aren’t willing to accept the wages being offered. That may be true, Cappelli says, but it’s not a sign of a skills gap. Employers may believe the labor market gives them time to shop around for people who will take below-market wages, or they may actually not be able to pay the market wage, but that does not equal a skills shortage. As Cappelli writes: “If you pay it, they will come.”
The challenge will be getting top leaders of organizations to admit they are a big part of the problem, and to change their ways. Software can be coded so it is less restrictive. Leaders could pay higher market wages where necessary. And they could make more investments in training. That costs money, to be sure, but so does leaving jobs open that could be of significant value to the company (not to mention the economy at large).
Judging from employers’ initial reaction, however, that’s unlikely to happen anytime soon. After writing the initial Wall Street Journal story, Cappelli heard from a few corporate leaders who told him there was really nothing they could do. He suggested he’d come out and take a close look at what they’re doing. “Nobody ever takes me up on that,” he says. “That usually shuts things up pretty quickly.”
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