6 ms·

It's not the skills gap: why so many jobs are going unfilled

28 points by Futurebot 10y ago

eli_gottlieb 10y ago
>In many places, employers are also setting wages too low, defining qualifications too narrowly, or not recruiting widely enough. Many people who are eager to work can’t because they lack transportation, or don’t have anybody to watch their children during the workday. Well, I think that's a perfect summary. Employers either need to pay up, or pony up taxes to local governments to pay up. A competent, polite, punctual workforce doesn't happen all on its own, and trying to dragoon people into one through poverty mostly just leaves you with unusable, crappy labor and low productivity growth.
- ScottBurson 10y ago
  Yeah, this picture seems really odd to me. Cambria is seeing soaring demand for their products; they're having trouble keeping up, to the point that they're actually losing sales and profit, because they can't staff up their factory; for the most part they don't require skilled labor; so they recently raised wages from $16.66 to a whopping $18/hr. Also their employees complain of poor morale and not being listened to. And on the other hand, they have an attendance problem. So it sounds to me like, they can't hire people because they're stingy assholes. Am I missing something? Seems like if they set out to share their success with their employees instead of keeping it to themselves, they would have better luck. So pay an attractive wage, like $24/hr, and treat people well (and listen to them), and then if an employee has an attendance problem you fire them, because you're not paying that kind of money for crappy employees either. Maybe someone can explain why I'm full of it, but from what I read here I have a hard time feeling very sympathetic.
  - eli_gottlieb 10y ago
    >So it sounds to me like, they can't hire people because they're stingy assholes. Am I missing something? I don't think you're missing anything. I think that almost 40 years of nigh-state-enforced labor glut have made employers very, very entitled about hiring. Now that demographics are running the other way (as the article notes), with the total workforce actually shrinking slightly, they're being bitten on the ass by that sense of entitlement. A trained, punctual, polite, healthy, functional labor force does not spring from nowhere! It springs from years to decades of cooperation between employers, communities, and organized labor. Or from sufficient graft to hire prison labor... which is still only mostly going to work in the "slave states" and only for extremely low-skilled labor. You can't have a shrinking total labor force, degradation of workers' communities, and easy hiring.
    - Futurebot 10y ago
      Exactly. Perceptions of there being a large reserve of army of labor lasts far beyond the end of its existence, and employers not only expect it to be there, but actually have it start impacting their worldview in some cases: the "you should be happy to have a job / I could replace you tomorrow" attitude isn't exactly a rational business calculation.
mswen 10y ago
I was also curious that there was no mention of health insurance. I have observed that my own family is paying considerably more for health insurance while actually getting significantly poorer coverage when compared to a decade ago. An employer like those described in the article wouldn't necessarily need to offer a significantly better wage than what was indicated if they provided a higher quality health care plan and payed a greater portion of the premium. And, offer fully paid dental insurance. In the end I guess it comes down to money one way or another for the employer.
- clusmore 10y ago
  Going a little off-topic here but I have never understood the model of having health care provided by an employer. In Australia we all pay for our own private health care (or choose not to). For one, I just can't understand how health care is in any way related to employment. More importantly, what happens if you get sick and then change jobs (and hence change health care providers)? How do pre-existing conditions work in this model? Is this just a way to de-incentivise job changing?
  - chrisbennet 10y ago
    It's a historical thing in the US. During or possibly after WW2, wages were frozen in the US. Employers started offering health insurance as a perk to get around the freeze and compete for labor. At least that's what I remember reading.
    - deleted 10y ago
      [deleted]
dchmiel 10y ago
I did some quick calculations to understand their stated problem of needing to higher 40 more people since it is costing them millions in lost revenue each month. "The labor shortage is costing the company some $3.8 million per month, said Marty Davis, the company’s president and CEO." $3.8 million * 12 months = $45.6 million per year in lost revenue. Being conservative and assuming a 10% margin on their revenue figures this is a loss of $4.56 million for the firm for the year. $4.56 million divided by their labour need (40) means each worker brings in $114,000 of margin. So as long as they pay below that they are ahead. If they paid $25/hour for 2000 hours a year ($50,000) plus a 1.4 gross up for benefits they could hire people at $70,000 ($50,000 * 1.4) and still earn a positive margin of $44,000 ($114,00 - $70,000) leaving them $1.76 million of income. ($44,000 * 40). What do they expect when they pay $36,000 per year (18*2000), plus any benefits? I’ve heard this stated before as there doesn’t seem to be a labour shortage just a shortage of labour that you want to pay very little for. We don’t say there are too little lawyers or investment bankers or management consultants. Those jobs are or used to be the highest paid bringing in lots of supply from eager graduates.
- xupybd 10y ago
  Yes but then they have to increase pay for all the workers not just the 40 new hires. It might not pay off at that scale. That lost revenue is probably not indicative of per worker revenues.
  - flukus 10y ago
    If they're paying below market wages then the current employees might not be the most efficient bunch in the first place.
- internaut 10y ago
  I've seen the same thing. My hypothesis is that working class wages are more sticky than white collar wages for reasons not strictly based on rationality. I believe that Moravec's paradox explains why working class wages should be higher and white collar wages should be lower than at present. https://en.wikipedia.org/wiki/Moravec's_paradox https://en.wikipedia.org/wiki/Moravec's_paradox Presently this is stalled because it is too counterintutive. People can't get their heads around the possibility of paying their gardeners and window cleaners more than their accountants or lawyers. That's the middle class version of The End of the World As We Know It. This to me explains the existence of firms like Home Depot and the increasing popularity of prefabs.
x0x0 10y ago
“We always have difficulties filling this position because we require specific experience in test engineering in the electronics industry. There might be total of 150 qualified people in the Midwest!” said one employer of industrial engineers. To Hine, the focus on work experience suggested that employers were being too picky. They wanted to hire someone who could be fully productive on day one. But at the same time they weren’t willing or able to pay enough to attract that perfect candidate. I'll leave the similarities between this and our industry to the reader...
- nickthemagicman 10y ago
  HR: What languages do you know? Programmer: I have a really solid base in OOP and functional langs so I can pick up a language pretty quickly. HR: Right Right, but what languages are you most experienced in. Programmer: Do you ask a carpenter which brand of saw he uses or doctor which type of mri machine he prefers? Give me a few weeks, I'll have whatever language you want down. HR: We want someone who can provide value from day 1. Programmer: There's your tech shortage.
  - jghn 10y ago
    This is the #1 problem in tech hiring. Sadly folks in our industry help to perpetuate it, many devs think the same way as your HR person.
  - flukus 10y ago
    > HR: We want someone who can provide value from day 1. This is particulalrly bad, because no one can honestly promise that without knowing more about what their walking into. If the codebase is spaghetti and it takes a week to checkout and setup a project (alarmingly common). They're rewarding the liars.

28 points by Futurebot 10y ago

>In many places, employers are also setting wages too low, defining qualifications too narrowly, or not recruiting widely enough. Many people who are eager to work can’t because they lack transportation, or don’t have anybody to watch their children during the workday. Well, I think that's a perfect summary. Employers either need to pay up, or pony up taxes to local governments to pay up. A competent, polite, punctual workforce doesn't happen all on its own, and trying to dragoon people into one through poverty mostly just leaves you with unusable, crappy labor and low productivity growth.

ScottBurson 10y ago
Yeah, this picture seems really odd to me. Cambria is seeing soaring demand for their products; they're having trouble keeping up, to the point that they're actually losing sales and profit, because they can't staff up their factory; for the most part they don't require skilled labor; so they recently raised wages from $16.66 to a whopping $18/hr. Also their employees complain of poor morale and not being listened to. And on the other hand, they have an attendance problem. So it sounds to me like, they can't hire people because they're stingy assholes. Am I missing something? Seems like if they set out to share their success with their employees instead of keeping it to themselves, they would have better luck. So pay an attractive wage, like $24/hr, and treat people well (and listen to them), and then if an employee has an attendance problem you fire them, because you're not paying that kind of money for crappy employees either. Maybe someone can explain why I'm full of it, but from what I read here I have a hard time feeling very sympathetic.
- eli_gottlieb 10y ago
  >So it sounds to me like, they can't hire people because they're stingy assholes. Am I missing something? I don't think you're missing anything. I think that almost 40 years of nigh-state-enforced labor glut have made employers very, very entitled about hiring. Now that demographics are running the other way (as the article notes), with the total workforce actually shrinking slightly, they're being bitten on the ass by that sense of entitlement. A trained, punctual, polite, healthy, functional labor force does not spring from nowhere! It springs from years to decades of cooperation between employers, communities, and organized labor. Or from sufficient graft to hire prison labor... which is still only mostly going to work in the "slave states" and only for extremely low-skilled labor. You can't have a shrinking total labor force, degradation of workers' communities, and easy hiring.
  - Futurebot 10y ago
    Exactly. Perceptions of there being a large reserve of army of labor lasts far beyond the end of its existence, and employers not only expect it to be there, but actually have it start impacting their worldview in some cases: the "you should be happy to have a job / I could replace you tomorrow" attitude isn't exactly a rational business calculation.

mswen 10y ago

I was also curious that there was no mention of health insurance. I have observed that my own family is paying considerably more for health insurance while actually getting significantly poorer coverage when compared to a decade ago. An employer like those described in the article wouldn't necessarily need to offer a significantly better wage than what was indicated if they provided a higher quality health care plan and payed a greater portion of the premium. And, offer fully paid dental insurance. In the end I guess it comes down to money one way or another for the employer.

clusmore 10y ago
Going a little off-topic here but I have never understood the model of having health care provided by an employer. In Australia we all pay for our own private health care (or choose not to). For one, I just can't understand how health care is in any way related to employment. More importantly, what happens if you get sick and then change jobs (and hence change health care providers)? How do pre-existing conditions work in this model? Is this just a way to de-incentivise job changing?
- chrisbennet 10y ago
  It's a historical thing in the US. During or possibly after WW2, wages were frozen in the US. Employers started offering health insurance as a perk to get around the freeze and compete for labor. At least that's what I remember reading.
  - deleted 10y ago
    [deleted]

dchmiel 10y ago

I did some quick calculations to understand their stated problem of needing to higher 40 more people since it is costing them millions in lost revenue each month. "The labor shortage is costing the company some $3.8 million per month, said Marty Davis, the company’s president and CEO." $3.8 million * 12 months = $45.6 million per year in lost revenue. Being conservative and assuming a 10% margin on their revenue figures this is a loss of $4.56 million for the firm for the year. $4.56 million divided by their labour need (40) means each worker brings in $114,000 of margin. So as long as they pay below that they are ahead. If they paid $25/hour for 2000 hours a year ($50,000) plus a 1.4 gross up for benefits they could hire people at $70,000 ($50,000 * 1.4) and still earn a positive margin of $44,000 ($114,00 - $70,000) leaving them $1.76 million of income. ($44,000 * 40). What do they expect when they pay $36,000 per year (18*2000), plus any benefits? I’ve heard this stated before as there doesn’t seem to be a labour shortage just a shortage of labour that you want to pay very little for. We don’t say there are too little lawyers or investment bankers or management consultants. Those jobs are or used to be the highest paid bringing in lots of supply from eager graduates.

xupybd 10y ago
Yes but then they have to increase pay for all the workers not just the 40 new hires. It might not pay off at that scale. That lost revenue is probably not indicative of per worker revenues.
- flukus 10y ago
  If they're paying below market wages then the current employees might not be the most efficient bunch in the first place.
internaut 10y ago
I've seen the same thing. My hypothesis is that working class wages are more sticky than white collar wages for reasons not strictly based on rationality. I believe that Moravec's paradox explains why working class wages should be higher and white collar wages should be lower than at present. https://en.wikipedia.org/wiki/Moravec's_paradox https://en.wikipedia.org/wiki/Moravec's_paradox Presently this is stalled because it is too counterintutive. People can't get their heads around the possibility of paying their gardeners and window cleaners more than their accountants or lawyers. That's the middle class version of The End of the World As We Know It. This to me explains the existence of firms like Home Depot and the increasing popularity of prefabs.

x0x0 10y ago

“We always have difficulties filling this position because we require specific experience in test engineering in the electronics industry. There might be total of 150 qualified people in the Midwest!” said one employer of industrial engineers. To Hine, the focus on work experience suggested that employers were being too picky. They wanted to hire someone who could be fully productive on day one. But at the same time they weren’t willing or able to pay enough to attract that perfect candidate. I'll leave the similarities between this and our industry to the reader...

nickthemagicman 10y ago
HR: What languages do you know? Programmer: I have a really solid base in OOP and functional langs so I can pick up a language pretty quickly. HR: Right Right, but what languages are you most experienced in. Programmer: Do you ask a carpenter which brand of saw he uses or doctor which type of mri machine he prefers? Give me a few weeks, I'll have whatever language you want down. HR: We want someone who can provide value from day 1. Programmer: There's your tech shortage.
- jghn 10y ago
  This is the #1 problem in tech hiring. Sadly folks in our industry help to perpetuate it, many devs think the same way as your HR person.
- flukus 10y ago
  > HR: We want someone who can provide value from day 1. This is particulalrly bad, because no one can honestly promise that without knowing more about what their walking into. If the codebase is spaghetti and it takes a week to checkout and setup a project (alarmingly common). They're rewarding the liars.