Wharton professor Peter Cappelli argues in a new book that companies need to recruit talented people, and train them--the way they used to.
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The Wharton School
Peter Cappelli, Wharton professor and author of Why Good People Can't Get Jobs, teaches a management class.
When describing the skills shortages plaguing their companies, CEOs sound like the Ancient Mariner: Water, water everywhere, nor any drop to drink! Even with the unemployment rate at 8.2%, business leaders complain there aren't enough people qualified to fill "today's jobs," shorthand for positionsthat require expertise in specific technologies or pretty much anything in health care. Usually, America's schools are the fall guys. Primary education, we are told, does a lousy job imparting the fundamentals of math and science. Colleges graduate too many liberal arts majors, when they graduate people at all.
Peter Cappelli is having none of it. In Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It, which was released today by Wharton Digital Press, the University of Pennsylvania management professor argues that employers are largely to blame for their hiring troubles. Their sins include larding job descriptions with an impossible number of requirements, including many that only people who have already done that exact job can meet. They also rely too much on software to screen thousands of applications, which dooms promising candidates whose resumes lack the precise words that alert such programs.
Cappelli thinks companies should switch from "buy" to "build" orientations: instead of shopping for perfect-out-of-the-box outsiders, they should expand training programs and offer apprenticeships. Inc. editor-at-large Leigh Buchanan spoke with Cappelli about getting the right people into the right seats.
First off, I want to commiserate with your son, who studied classics and had trouble finding a job after college. My son graduated two weeks ago. History major. We are not optimistic.
Sometimes the temp world is out there for these guys, even though I haven't quite encouraged my son to do that yet. He's had a couple of jobs but they were like warehouse employee. Then he went back to school and got a phlebotomy certification to work in health care. Since then he's been looking for health-care jobs but couldn't get those either. I was in China in February and they have the same problem: that college graduates aren't doing very well, particularly when compared to factory workers. The Chinese really did take education seriously. They are very shaken up by this.
While working on the book, did you talk to any job seekers who felt the school system had failed them?
No. And when you follow up on the surveys of hiring managers asking about their concerns, they pretty much never talk about deficiencies in academic skills. When they rank the issues they say are important, academic skills are way, way down near the bottom. What they do complain about is work experience. They want someone who has done this exact job before and doesn't need training. The question is: is that a legitimate complaint? Because kids like yours and mine haven't had three years doing phlebotomy or sales or coding. It doesn't indicate there's something wrong with the applicants. It indicates something has changed on the employers' side. What they are expecting now is completely unrealistic.
Why have employers' expectations become so inflated? Is it because the pool of job seekers has grown enormous?
Part of it is that they can afford to get picky in a downturn. Part is that they believe they should be able to find these perfect people. It's irrational. They are leaving vacancies unfilled for months and months while they hunt for somebody who could come in tomorrow and do the job. They are passing by people who would take a few days of training to get up to speed. They don't know what it costs to keep these positions vacant or how little it would cost to give people a few days of ramp-up.
The other, longer-term trend is that companies have stopped developing people internally. They've stopped hiring kids out of college and grooming them for management ranks. That means they no longer have their own training and development departments. Once you get rid of the systems for developing people, you no longer have a choice--you have to recruit outsiders. So now everyone is chasing the same people, who are doing exactly the same job that these companies have vacant. Of course it's hard to find enough of those people to go around. But that doesn't mean there's anything wrong with the labor market.
I find astonishing the statistic that only 21% of US employees have received any kind of employer-provided training in five years. All I ever hear business leaders say is "hire for attitude, train for skills." Are they lying?
There's this enormous disconnect between what employers think is going on in their organizations and what is actually going on. There's also often a disconnect between what the top human-resource person thinks is going on and what goes on down the line. Companies have so gutted their human-resource departments, and everything is now automated. So a lot of people don't have a feel for what's going on. These surveys asking hiring managers about job candidates are completely at odds with what you hear from CEOs. Who is right? I would say the hiring managers.
Increasingly I hear companies let departing employees compose the job descriptions used to hire their replacements. Is that helpful?
When you ask an individual what is required to do your job, they tend to inflate it because it makes their work look more important, which helps their resume. It's never a good idea to ask self-interested people to provide reliable information. The better thing would be to have some expert in human resources cook these job descriptions up. That's how it used to work. They're reality testers. They ask: Do you really need a Ph.D. to do this job?
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