Monday, March 25, 2013

Guest Post: Purple Squirrels, Labor Market and the Skills Gap

Today's guest post comes to you courtesy of Reece Chenault, a long time blog reader and commenter, community activist and labor organizer, Charles Mingus fan and criminally unheralded string bassist. With all that going on it's difficult to pin this man down but he graciously agreed to share his thoughts on labor shortages and job searches. Please let him know what you think in the comments.


Purple Squirrels…. All In My Brain…. Job Searches… Just Don’t Seem The Same
I have dinner occasionally with a friend who is a libertarian.  Lately he’s been hanging out a lot on Fox News (Cavuto, I think) and because he’s my friend, I spent some time on the channel for once.  Once my eyes adjusted to colorfully stupid programming, I noticed that there was a huge picture of a squirrel in the background.. but I was worried because that squirrel was the color of a hair dye I know of as “Manic Panic Purple.”  That’s right… a purple squirrel.
Now, I wasn’t worried because I thought they had found this squirrel on some kind of environmental disaster site or he was part of some experiment done by bored kids at George Mason University… I was worried because the concept of the “purple squirrel” is one I’m really familiar with.
“Purple squirrels” are not only rodents that don’t exist… they are people that don’t exist.  Specifically, this is a term that is used by Human Resource departments (particularly those that use software to weed out candidates because they’ve eliminated many of their human positions) as they search for the perfect candidate.  That purple squirrel is the elusive candidate they have been searching for that isn’t just able to do the job but the person that HAS done the job before exactly to the specifications set by the employer.  

Peter Capelli, a distinguished professor at Wharton who wrote a recent book about the phenomenon called Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It, writes:
“[The hiring manager] would 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. [But] those guys are gone now.  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.”
LINK
FOX News was not making this case, however.  Like most companies in the business of doing business, they were talking about methods to make yourself look like the squirrel.  But it left me wanting more answers. 
I have been collecting stories about unemployment for my other gig(s) so I broke out one about the hurdles the long-term unemployed have to jump over to get a job called “With Positions to Fill, Employers Wait for Perfection” from The New York Times.  These paragraphs seemed to continue the narrative I started to see emerging:
“Data from Glassdoor.com, a site that collects information on hiring at different companies, shows that the average duration of the interview process at major companies like Starbucks, General Mills and Southwest Airlines has roughly doubled since 2010.”
Okay, times are tough right?  Well:
“After they call you back after the sixth interview, there’s a part of you that wants to say, ‘That’s it, I’m not going back,’ ” said Paul Sullivan, 43, an exasperated but cheerful video editor in Washington. “But then you think, hey, maybe seven is my lucky number. And besides, if I don’t go, they’ll just eliminate me if something else comes up because they’ll think I have an attitude problem.”  Mr. Sullivan has received eighth- and ninth-round callbacks for positions at three different companies. Two of those companies, as it turned out, ultimately decided not to hire anyone, he said; instead they put their openings “on hold” because of budget pressures.”
And employers are happy to wait because it doesn’t cost them anything:
But there’s also little pressure to hire right now, so long as candidates are abundant and existing staff members are afraid to refuse the extra workload created by an unfilled position. Employers can keep dragging out the hiring process until they’re more confident about their business — or at least until they find the superstar candidate.  “They’re chasing after that purple squirrel.” said Roger Ahlfeld, 44, of Framingham, Mass., using a human resources industry term for an impossibly qualified job applicant.”
After all, Capelli does note that the “skills gap” that employers have cited as a reason for not hiring more people is more than a little ginned up:
“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 is that there is no evidence to support this.”
No evidence?  Then why does FOX News get to show the gigantic squirrel with hair like a member of a punk band?  Why are we investing billions of dollars into countless school reforms across the country with the idea that the schools aren’t teaching kids what they need? Our educational system does need an overhaul but not for these reasons (another post for another time I guess.)  Then what would solve this “skills gap” that is all over the news and causing FOX News interns to run around with a bottle of Manic Panic in Central Park?
The New York Times article “Skills Don’t Pay The Bills” took me a little farther and provided some answers.  Turns out, we don’t really have a skills gap at all… we have plenty of skilled people.  We’re just not offering people any money for the job and expecting someone with extensive qualifications to apply.  To quote my man Bernie Mac, “That’s right, America.  I’m here to tell you –“ (roll footage)
I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.
(continuing in Bernie Mac voice) Oooooh…. See what they did right there?  If you just took a new job you probably just got mollywhopped by the idiocy that is our current economic system where employers have all the power… with none of the knowledge about the economy.
(side eye) Let’s continue:
In a recent study, the Boston Consulting Group noted that, outside a few small cities that rely on the oil industry, there weren’t many places where manufacturing wages were going up and employers still couldn’t find enough workers. “Trying to hire high-skilled workers at rock-bottom rates,” the Boston Group study asserted, “is not a skills gap.” The study’s conclusion, however, was scarier. Many skilled workers have simply chosen to apply their skills elsewhere rather than work for less, and few young people choose to invest in training for jobs that pay fast-food wages. As a result, the United States may soon have a hard time competing in the global economy. The average age of a highly skilled factory worker in the U.S. is now 56. “That’s average,” says Hal Sirkin, the lead author of the study. “That means there’s a lot who are in their 60s. They’re going to retire soon.” And there are not enough trainees in the pipeline, he said, to replace them.  One result, Sirkin suggests, is that the fake skills gap is threatening to create a real skills gap.
Our shortsightedness about the economy has created the thing we were trying to fix.  Serves us right, considering that what we were so worried about wasn’t real in the first place.  By not paying workers a decent wage for complex work that requires real skill and training, fewer workers go into that field.  The result is a lack of trained people who can then both teach new entry-level employees AND an educational system that can produce more of those employees.  To go even further, this means that lots of people are staying in jobs that they probably can’t stand simply because they don’t want to enter Thunderdome to compete with guys like Mr. Sullivan.
I’ll leave you with these words from Capelli, our fearless hero:
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.  “At law firms, consulting firms, accounting firms, you start contributing the day you arrive.  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.”

Thoughts? 

Is Peter Capelli full of it? 

Are we lacking in skills?

Is your workplace excessively demanding in hiring standards?  

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