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Unemployment is at 9.2%, so why are there still jobs that organizations cannot fill?
The US unemployment rate managed to sneak up to 9.2% in the month of June, yet companies still have jobs that they just can't seem to fill. Why?
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7 Answers
Caty, your question seems to want to tie a 9.2% unemployment rate with why companies cannot fill their jobs, and while there are a number of good answers presented here, few of them address the unemployment issue in any detail.
It is one of the most common misconceptions out there that if there is a high unemployment percentage, there should be an abundance of talent to choose from to fill those positions. Almost one year ago when the unemployment rate was even higher, I wrote about this very topic in a blog post (http://blog.searchentrepreneurs.com/2010/08/16/unemployment-rates-and-recruit...).
The point that your question raises is one of my favorites in that it demonstrates why recruiting is such a great industry. Those of us who have worked in the search industry for over a decade have worked through one or more of these times where unemployment numbers rise - but for our primary market we are unaffected and dealing with NO UNEMPLOYMENT.
Economists say that we will never be at 0% and that a 5% rate is defined as "full employment". It may surprise you to know that the bulk of positions recruiters work on fall in the college education required, white collar, professional ranks (officially called "management, professional and related", that the unemployment number has been between 3% and 5.1% for the last few years, again - full employment.
This suggests that even though many of the normal and common issues with filling positions outlined in answers here may still have an impact on the ability to hire, the unemployment rate is not affecting the ability to hire - rather, the war on talent and lack of available management, professional and related talent is making it difficult to fill those open positions.
Along this line, there is a need for everyone in the U.S. to focus on creating graduates with the core skills that are needed to fill the jobs that are open - specifically those in the management, professional and related category as the Bureau of Labor and Statistics (BLS) labels it, especially in the Science, Technology, Engineering and Math (STEM) fields that are going to be in continued high demand in the coming years.
A - Because the job requirements are unreasonable or ill conceived
B - Because the budget is not suitable for the job requirement
C - Because there is too much bureaucracy in the hiring process
D - Because the interviewing process is unproductive
E - Because companies are only willing to hire people that are already working
F - Because organizations believe that with so many people unemployed, they can wait for the perfect candidate to show up
The first reason happens to be that the organizations today are willing to wait for the right candidate instead of making any compromises.
Secondly the good candidates are retained by their present employers leaving the market with those who are not 'fit'
Thirdly companies today are also tightening the salary budgets and are no more spending high on employee's salary and benefits
Raghav
I tend to disagree with both of the previous answers. Instead, I believe msot of the blame rests on long-standing trends in the US educational system. Many of the jobs available today require specific skill-sets, many of which are typically not taught in college and universities, much less graduate programs.
Among the most in-demand jobs at present is the field of engineering. Despite being a regular program at many universities, it has not been a relatively popular school in recent years, as other fields like business have appeared more glamorous and less work-intensive.
I think there is a certain level of qualifications/skills you need to have to fit the job requirements of today and tomorrow. It is not only about the availability of workers, it is about their skills matching with the open job profiles.
I recommend you to watch a interview with the CEO of Kelly Services on CNBC last friday around this debate.
You can see it here: http://www.kellyocg.com/Knowledge/KellyOCG_Blog/Where_are_the_jobs___Video_/
I don't think its a matter of not being able to fill positions as much as it is justifying the expense to fill that position. It will cost a company almost $75,000 in salary and benefits to pay an employee $55,000 of which the employee will take home $44,000. That employee needs to produce $75,000 in either sales or support just for the employer to break even.
Ninety-nine weeks of unemployment is ridiculous in my opinion. Your state is going to have to borrow the money to pay that and it gives people a cushion to hold out for the job they want rather than use their expertise to benefit a company trying to be competitive in the marketplace for a little less pay. Plus, the longer that employee waits the more their skills atrophy and the less valuable they become.
I think businesses would like to hire but at this point in time there are so many unknowns in the economy. No one knows what the true costs of health care will be in the coming months. Will Congress increase taxes? What about energy costs? How many more government regulations are on the drawing board? What about foreign competition? Will acquiring financing be easier or harder in the future?
These are some of the reasons that unemployment has remained at more than 8% for the past 30 months.
In terms of job openings and job seekers, the US has an “impedance mismatch” so to speak. According to recent Bureau of Labor Statistics (BLS), there are roughly 3.5 million job openings and at least 4.7 million job seekers, and likely treble that number when older and discouraged wannabe workers are included.
So how is this possible? The answer lies in the sclerotic reaction of the US educational system to modern needs. Example: In 1998, how many organizations were looking for "Web Developers?" Answer: Very few. Yet, a query on the vertical job search engine, Indeed www.indeed.com for "Web Developer," reveals over 77,000 job openings that range in compensation from $50,000 to over $130,000 annually. How and where are these high demand, well compensated workers produced?
What is the genus of this sad situation? It is because both the for-profit and not-for-profit higher education sectors in the US are content to offer courses on arcane study like, “Desire and Ambition in the Classic Chinese Novel” (source: 2010 Oberlin course catalog) in consideration for ever higher tuition fees. Finally in this prolonged recession, the light has been shown on the accelerating tuition fees and the student loan problems [read: no paycheck upon graduation to repay loans].
My guess is; that in the coming years, tuition and student loans will be more closely tied to a paycheck upon graduation. Gone are the days of an expensive liberal arts education and years spent trying to “find one’s self,” as this is the harsh reality of difficult economic times.
It will be incumbent on organizations to develop excellence in Workforce Planning, whereby gaps in internal and external talent supply are recognized 3, 5 and 10 years out. In turn, the educational system needs to “sync up” with these carefully identified human capital needs. Hence, the impedance mismatch will be relieved by an educational system that produces a high quality labor force. This labor force of the future will be healthier and happier while tuitions will be directly proportional to the paychecks produced post graduation.
Link to 10 Jobs That Didn't Exist 10 Years Ago:
http://finance.yahoo.com/career-work/article/111973/jobs-that-didnt-exist-10-...
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