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Should it be mandatory
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Laurie Bassi is an author and the CEO of McBassi & Company
( mcbassi.com), a leader in the emerging field of HR analytics.
WHEN YOU hear companies complain about talent shortages, what they’re
really complaining about
is the price of talent—
what they have to pay to
get the skilled employees
they need. They’d like to
pay less, but, unsurprisingly, they can’t find folks
who want to work for them at the wages they are
offering. Of course, we’d all like to pay less for the
things we buy. But, as mature adults, we’ve come
to recognize that complaining does not alter the
laws of supply and demand. Prospective employers who are sitting on the sidelines, complaining
about shortages, are those who are unwilling to
pay what is required by the market.
Let’s unpack this a bit to dig into what’s
behind this talent shortage complaint.
For decades now, the level of corporate
investment in workplace education and training
has been unsustainably low in the U.S. When
faced with the decision to build versus buy, too
many firms have chosen to buy. This approach
has resulted in a zero-sum game; companies hire
skilled folks from the competition, but few skills
are being built. As a result, “talent shortages” and
high unemployment go hand in hand.
In short, firms must provide either the nec-
essary skill training to build talent within their
organization or the wages required to buy the
skills they’re seeking. The ones complaining
about shortages have revealed that they’re not
willing to do either.
Inevitably, this raises the counter-argument
that “if we train them, they will leave.” To a certain extent that may be true. But for the vast
majority of employees, voluntary departures
typically arise either because they want to get out
of an undesirable work environment (lousy boss,
poor work-life balance or other related issues) or
because they are seeking an employer who will
invest in their training and development.
Create a positive, dynamic work environment where you invest in employees’ development and your employees will want to stay—even
when competitors try to hire them away. This
doesn’t have to cost a lot of money—for example
the power of simply saying “thank you” to
employees can be enormous. But it does take
focus and commitment from senior leaders.
When you create a work environment worthy of
your employees’ best effort, you will be rewarded
with their loyalty.
I have little patience for discussions of “
talent shortages.” Those firms that make these
arguments are presenting themselves as victims
of a problem they’ve created themselves. C
Author James Bessen lectures at the Boston University School of
Law. Read his blog at researchoninnovation.org.
SOME EXPERTS deride
the idea that there is a
skills gap, calling it “mostly
a corporate fiction.” All
employers need to do to
attract skilled workers,
these critics say, is to offer
But employers aren’t “just whining,” as one
critic put it; the problem is real. It’s true that the
average wage has been stagnant for 30 years. But
the average worker doesn’t have the specialized
skills to deal with new technology, and that is the
actual problem. In fact, employers have raised
wages, but only for those who have the skills:
Wages have risen 35 percent on average for the
top workers in occupations that use computers.
However, there are just too few of these workers.
The problem is not about stingy employers, but
about skills related to new technology.
This is nothing new. During the Industrial
Revolution, for example, major new technolo-
gies made old skills obsolete, but it took
decades before most of the workforce got up
to speed with new skills. New technologies
pose challenges to schools and to labor mar-
kets. Look at graphic designers. Until recently,
almost all graphic designers designed for
print. Then came the Internet, and demand
grew for Web designers. Then came smart-
phones, and demand grew for mobile design-
ers. Designers had to keep up with new
technologies and new standards that are still
changing rapidly. Graphic arts schools have
had difficulty keeping up.
Employers look to hire experienced workers, but, without certified standard skills and
common technology, they have a hard time telling whether workers have acquired the right
experience to work with their particular technology. And if workers are unsure about the future
prospects of their employer’s particular technology, they may be reluctant to invest in learning.
In short, when new technologies are uncertain, not standardized and rapidly changing,
schools can’t keep up. Instead, workers have to
learn on the job, but this is hard for many. Top
graphic designers teach themselves and earn
rising wages, but the average designer does not.
The evidence shows something similar happening among nurses, health technicians,
paralegals, bank tellers and a whole range of
other occupations affected by computers.
The skills gap is plainly seen in the growing
disparity in wages between those who have
mastered the new skills and those who have
not. It’s real, and it hurts both employees and
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