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Skills Shortage? Quit Whining

If "people are our most important resource," why do most employers expect this precious asset to show up gift wrapped?

Mention "talent shortage," whether you're talking about IT, manufacturing, healthcare, or any other professional group, and brace for a firestorm of acrimony. The latest controversy surrounds a Wall Street Journal opinion piece that cites a recent Deloitte Consulting survey in making the case that 600,000 U.S. manufacturing jobs are going unfilled during a period of high unemployment because of "workforce shortages or skills deficiencies in production positions such as machinists, craft workers, and technicians."

Cue the comments:

"My guess is that it's just 'cheap labor' policies designed by lobbyists for industry ... so that they can make a case for why they need to bring more cheap foreign workers into the country using guest worker visas ..." writes one Mary Schubert. "Lobbyists for industry have been doing this in the technology field for decades."

"After three decades of cutting jobs and short-changing the training of future workers, they find that there's suddenly no one able to perform the job," writes one Bryan Brune. "Shocking ..."

The range of skeptical comments could just as well apply to any story claiming an IT skills shortage. And especially when it comes to manufacturing jobs, the critics have reason to question the new conventional wisdom.

For one thing, the manufacturer respondents to the Deloitte survey reported that 5% of high-skill jobs (translating to the 600,000 number) remain unfilled because of a skills shortage. But isn't a 5% labor imbalance in any sector considered by economists to be "frictional," reflecting a natural mismatch between supply and demand related not only to skills, but also to salaries, job locations (like with that North Texas-based semiconductor engineer whose wife went running to President Obama), and a variety of other factors?

A perspective in the Journal piece attributed to Dr. Peter Cappelli, an HR expert at Wharton business school, does the skills shortage protagonists no favors. Noting that most manufacturers no longer run in-house apprenticeship programs because "they're too costly and time-consuming," the authors then quote Cappelli as saying that companies are seeking "just-in-time" employees--technically trained and ready to start work. So manufacturers want perfect workers, but insist on having others train them?

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It's time that employers, especially the largest ones, IT and otherwise, stop whining about the talent shortage and start doing something about it. The Journal article lays out a number of worthy programs initiated by the National Association of Manufacturers whereby companies are working with colleges and nonprofits to develop the technical skills they need.

In IT, myriad programs exist at the federal, state, and local levels. But rather than depend on government STEM education subsidies and handouts, tech employers (and the economy at large) are better served when they put their own skin in the game.

In one relatively small but nonetheless powerful example, top IT executives from JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America, UBS, and NBCUniversal sit on the board of a nonprofit organization called NPower, whose Technology Service Corps provides free IT instruction to disadvantaged young adults in the New York City area. TSC provides 18- to 25-year-olds who have a high school diploma or GED equivalent with a 22-week program that involves extensive classroom instruction, internships, job placement services, and mentoring.

Since 2002, TSC has run 26 classes and graduated close to 500 students, 87% of whom are employed, continuing their education, or doing both, the organization says. Employers of TSC's grads include Citigroup, JPMorgan Chase, Accenture, NY Charities, The Center for Employment Opportunities, NY Foundling Hospital, New York University, TD Ameritrade, UBS, and the Henry Street Settlement.

NPower isn't positioning TSC as an IT full-employment program, notes board member Jonathan Beyman, global head of operations and technology at Citigroup. It's more about helping inner-city kids than closing IT skills gaps. But Beyman concurs with the notion that this country could use many more private-sector-initiated IT training programs. NPower, in fact, is looking to expand TSC to other cities (though Beyman says it's premature to disclose them).

He acknowledges that the IT talent shortage isn't everywhere, for every skill. But he says he's seeing a severe shortage in information security--"firewalls, intrusion detection, anti-phishing, internal ethical hacking kinds of stuff," as well as in high-end application development. "We're in a war for talent that's as fierce as I've ever seen," he says. "And there are no signs of it abating."

What Beyman likes about TSC grads--his organization hired two from the most recent graduating class of 47--is that they're hungry. One of those two hires, a young woman who started at Citi as an intern, took notes at every meeting, asked questions, sought challenges. "This is the type of person I want to hire," Beyman says. "I want someone who's smart--but more than smart. I'm looking for people who work hard and want to prove themselves."

If "people are our most important resource," as employers are wont to proclaim, why do most of them expect this precious asset to show up gift wrapped on day one, and to increase in value with little effort on their part? In InformationWeek's most recent IT Salary Survey, whose full results we'll release in April, only 28% of the 13,880 IT pros we polled said they expect to receive additional education or training as one of their employee benefits this year.

Something's wrong here, and it has nothing to do with a skills shortage.

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User Rank: Apprentice
8/23/2012 | 11:12:41 AM
re: Skills Shortage? Quit Whining
The following info was taken from a 14-Mar-2012 Computerworld article: Workforce Opportunity Services is a nonprofit that collaborates with business clients and local colleges to train economically disadvantaged students to fill less popular technology disciplines such as COBOL programming. "They take kids from disadvantaged neighborhoods and provide them as consultants," says former Guardian Life Insurance Company CIO Frank Wander, who now has his own consultancy, IT Excellence Institute.
User Rank: Apprentice
5/24/2012 | 1:44:25 AM
re: Skills Shortage? Quit Whining
Finally, Mr. Preston sees the light! As a former IT worker, I wholeheartedly agree with the arrogance and shortsighted lack of actual training programs within so many large corporations to fill "high tech/skill" jobs. There are so many American workers willing and able to learn new jobs and skills, but at middle class wages within the US. But until some hard nosed news organization like 60 Minutes exposes and embarasses these companies for pretending to not find the necessary skills within America, the business of offshoring and outsourcing functions to cheaper labor in other countries will continue.

Then there is also the massive age discrimination where the over 40 age group need not apply, because previous considerable experience, which used to be a plus, is now seen as undesirable or too ingrained in the past. If companies would commit to retraining this age group, they would get more loyalty than they can from the younger workers.
User Rank: Apprentice
4/11/2012 | 2:41:47 PM
re: Skills Shortage? Quit Whining
Great article! This may be part of a larger issue that is not discussed often -- the labor market, especially compared to capital markets, is quite inefficient. Are people working at tasks that are the best use of their skills and temperament? How much could the economy grow if people were more optimally allocated to the needs of the market? As with other markets, the Internet may help increase the efficiency of the labor market by providing better information about all players in the market. It remains to be seen, of course, how exactly this might play out in the future.
User Rank: Apprentice
4/6/2012 | 3:46:12 PM
re: Skills Shortage? Quit Whining
Arbitrage (speculation) in the labor markets in entirely to blame here. The global economy depends on undervalued labor. All profit is derivative of this, and always has been. Its simple playground politics.

The Tobin or Robin Hood tax would tap this profit and redistribute it back to the labor force via the Universal Demogrant.

We can't get rid of the sociopathic bullies who speculate on the livelihoods of others. We can however use their greed against them to benefit humanity on a scale as global as our markets now are.

Starve the Wolves, feed the Sheep!
User Rank: Apprentice
3/28/2012 | 9:58:14 PM
re: Skills Shortage? Quit Whining
First, companies need to clearly identify what skills are in short supply - and it isn't necessarily the obvious (technical) ones for IT. Business analysis skills that focus on identification of the root cause of business problems, elicitation of needs from multiple stakeholder groups, and the facilitation of solutions, will enhance IT's ability to deliver huge value to the business.
A number of colleges and universities are starting to offer accredited programs to support the development of these skills. My organization (IIBA) is working with these institutions to ensure they put the right program in place.
User Rank: Strategist
3/2/2012 | 9:54:53 PM
re: Skills Shortage? Quit Whining
Corporate America has the unmitigated gall to do everything possible to drive down wages and benefits for IT workers and then complain to congress that they just don't understand why nobody wants study Info tech in college anymore. Gee what a surprise. Kids not wanting to go into a career that features un-ending expoitation of talent.
User Rank: Apprentice
3/2/2012 | 1:54:13 AM
re: Skills Shortage? Quit Whining
Where is he working?
User Rank: Ninja
2/29/2012 | 10:04:22 PM
re: Skills Shortage? Quit Whining
Agreed! But, some companies are still doing massive training of (the right) college grads or others who enter the organization. My colleague's son just graduated college, "matriculated" at a new job and he's not only getting paid and working, but because of the company's accredited faculty, he'll end up with a masters degree at the end as well. The company does this because they have total control over what he learns and it's ALL relevant to his job, unlike going to grad school right after undergrad. A great model for others to follow.
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