The headline in a national news magazine caught my attention of course. However, it was Myth #4 – “we can move where the jobs are” – in the sub head “The Five Myths About The Economy” that had me reading more closely.
We all constantly hear about the shortage of jobs – and job creation – in the country, and how that is key to our economic rebound.
So it came as a fairly big surprise to read that in fact we have 3 million job openings today in search of suitable candidates.
One of the reasons for that is the available skills in the labor pool aren’t aligned with the available jobs.
“There’s a tremendous mismatch in the jobs market right now,” states James Manyika, one of the authors of a new McKinsey study An Economy That Works: Job Creation and America’s Future.
“It runs across skill set, gender, class and geography.”
It’s a fascinating, comprehensive report, but in the event you don’t want to take the time to pore through 100 pages, let me give you the highlights, at least in the aforementioned area of the unfilled job openings.
In their survey, McKinsey finds nearly two-thirds of business executives say they routinely have difficulty filling certain positions. The top reason they cite is lack of specific qualifications or experience.
That skill/experience mismatch may pose bigger problems for job creation in the future. Although half of the companies in the same report they will expand employment in 2011, 40% say they have also had positions open for six months or more because they can’t find the right candidates.
So what are some of the underlying factors for this?
For starters, we aren’t as likely to move for a new job as we once were. A few decades ago, one in five Americans changed residences every year. That number has fallen to one in 10 today, and the collapse of the real estate market makes it harder for many homeowners to even consider relocation.
This is why laid off auto workers in Detroit can’t move to take welding and assembly jobs in North Dakota, an area with low unemployment and cheap housing.
Mobility is also limited by the rise of dual-income families, so now you actually require two jobs for every move.
McKinsey goes on to identify other causes of the unfilled job openings, now and in the coming years. Too few students will earn college degrees, and many of those who do will get them in low-demand fields. Too many workers will have no more than a high school diploma and the number of American workers without even that will grow.
The result? The skill mismatches will worsen.
The study states that investing in the talent of the U.S. workforce will be critical to help fuel economic growth – and to restore full employment.
“U.S. workers are known for their productivity, flexibility and resilience. As the labor force grows, employers, public institutions and workers themselves, will need to address growing skill gaps to unleash this fundamental source of competitive advantage.”
One area of the job situation cited in the study is actually good news for staffing agencies.
“The use of temp workers is also changing,” the McKinsey study says. “In decades past, most temps were in positions such as administrative assistants, production line workers or in processing jobs. Today, a growing share of temporary employees are in occupations such as human resources, accounting and even engineering. From 2003 – 2001, there was a net gain of 44,000 contract workers in high-skill professional and technical services, despite an overall loss of more than 600,000 jobs in the contract labor sector.”
In a 100-page document so heavily researched and full of facts, it is perhaps somewhat dangerous to pull out a single paragraph and give it more emphasis than any other. But this is one that stuck out for me, and I will close with it.
“With each successive jobless recovery, the structural factors that hinder job creation become more apparent. Addressing these underlying issues will be critical not only to the lives of American workers, but also to the continuing success of the U.S. economy.”