Tags: Deloitte | skills | gap | recovery

Deloitte Study: Major Skills Gap Threatening Labor Recovery

Thursday, 11 Oct 2012 07:44 AM

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A widening skills gap is damaging the recovery in the labor market, as companies wanting to hire cannot find enough workers with the right skills, a new Deloitte study finds.

The economy will suffer as well, as traditional mainstay industries contract and lose ground to competitors abroad with better-trained work forces.

“Today, there is a significant and growing mismatch between the country’s demand for talent and its current supply. The type of talent demanded today — and needed tomorrow — is increasingly either outdated or out of stock,” the study’s authors William Eggers and John Hagel write in their report.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

The need for highly skilled workers is growing and growing rapidly, but supply is short, as the nation’s graduates are stocking up on the wrong or outdated skills.

“For instance, the skills that graduates acquire after four years of college will soon have an expected shelf life of only five years, meaning that skills learned in school can become outdated long before the student loans are paid off,” they write.

At the same time, the U.S. workforce is aging, and by 2018, some 40 million working Americans will be 55 years or older, a 5.8 percent increase over the period of a decade.

“While headlines are filled with news about high unemployment, a surprising number of industries and regions are finding it nearly impossible to obtain qualified workers,” Eggers and Hagel say.

Meanwhile, talent shortages can be found in a broad array of industries, including some where jobs are sought the most.

“While manufacturing unemployment is high, for instance, many American manufacturers cannot find enough employees with the skills and training needed to fill their jobs. About 67 percent of manufacturers report a shortage of available and qualified workers, and 56 percent anticipate that the shortage will grow worse in the next three to five years,” the pair writes.

“Across the nation, 5 percent of positions remain unfilled due to a lack of qualified candidates.”

The U.S. unemployment rate fell to 7.8 percent in September from 8.1 percent in August, as employers added a net 114,000 jobs, while households reported that total employment rose by 873,000 in September.

The improvement in the headline unemployment rate was largely due to increased demand for part-time workers and not due to fundamental improvements taking place in the labor market, as 114,000 new jobs falls below levels that most economists see as necessary to keep pace with population growth not to mention absorb frustrated unemployed workers re-entering the labor pool.

CEOs admit they are having a tough time hiring workers despite high unemployment rates.

“We’ve steadily been hiring for the last couple of years, but it’s always a lot of work,” said Jim Murphy, CEO at Almac Clinical Technologies in Souderton, Pa., a life sciences company, according to CNBC.

“You end up having to develop ways to try and find these folks, whether it’s using recruiters, strengthening your own recruiting focus internally, even just old-school things, like bigger internal employee referral bonuses.”

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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