Why Companies REALLY Can’t Find the Employees They Need, Part 1
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Editor’s Note: This post by Cheryl Oldham originally appeared in ChamberPost, the official blog of the U.S. Chamber of Commerce.
NOTE: The Institute for a Competitive Workforce’s (ICW) Cheryl Oldham has taken issue with Dr. Peter Cappelli’s recent column in the Wall Street Journal in which he argues that the American business community is partially to blame for the country’s unskilled workforce. This three part blog series by Mrs. Oldham argues that Dr. Cappelli’s theory is short sighted, and that it is the nation’s mediocre educational system that is the primary reason for the skills gap. (Part 1 of 3)
Dr. Peter Cappelli’s column, “Why Companies Aren't Getting the Employees They Need,” argues that there is no shortage of a skilled workforce and that the high unemployment rate is largely due to the businesses themselves. Unfortunately, the column has no shortage of logical fallacies and does little to advance the situation.
First, Dr. Cappelli argues that companies are creating the talent shortage and one such reason is that they are requiring that a person have a job before they are offered a new one. Even if this were true—and he cites no evidence that it is—he fails to acknowledge that the person accepting a new job would be in turn creating a new job opening, prompting a net zero in workforce demand. Eventually, some company would be forced to accept a person without a job, thus shrinking the skills gap. Unfortunately, because there is a very real skills shortage in our nation, companies do eventually reach the end of the chain and are left without a qualified worker.
Then he shifts his argument to one of wages, claiming that companies are simply refusing to pay what an employee demands. Yet in the face of 9% unemployment, with many of those job seekers being long-term unemployed, it would stand to reason if the author were correct that someone would take these jobs eventually. It seems that the only possible way he could be correct is if there was a massive amount of collusion taking place among workers to hold out for higher wages. There must also be a massive amount of collusion among employers to hold wages down at the same time. Otherwise, market forces and fundamental needs would naturally compel one side or the other to give in. That seems to be a fairly unlikely conspiracy theory, however. Yet again, the author offers no evidence whatsoever to back his claims that this is indeed the case, so we can only speculate as how Dr. Cappelli arrived at this opinion.
In my next post, I’ll address Dr. Cappelli’s claims about companies’ rigid hiring requirements.
Read more from ChamberPost, the official blog of the U.S. Chamber of Commerce.