Nearly three quarters (73 percent) of U.S. companies expect an increase in their demand for "middle skills" jobs over the next few years, according to a recent report (November 2014), "Bridge the Gap: Rebuilding America's Middle Skills," published by Accenture, Burning Glass Technologies, and Harvard Business School. Middle skills jobs are defined as those that require more education and training than a high school diploma but less than a four-year college degree. More than half (56 percent) of those surveyed are struggling to find people with the qualifications to fill existing middle skills vacancies.
The research is the first to analyze the U.S.'s middle skills jobs market data with a focus on competitiveness. "This is the single most important issue to strength U.S. competitiveness, and bring back the American dream for our workers," said Joe Fuller, a senior lecturer at Harvard Business School, and lead author of the report.
According to the report: "While millions of aspiring workers remain unemployed and an unprecedented percentage of the workforce report being underemployed, employers across industries and regions find it hard to fill open positions. The market for middle skills jobs is consistently failing to clear."
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The report noted that millions of job postings go unfilled even as millions of people remain unemployed or underemployed. "The majority of U.S. employers across many business sectors are having great difficulty filling middle skills positions, despite the fact that unemployment and under-employment remain a challenge for many Americans," said David Smith, senior managing director for Accenture Strategy, Talent & Organization.
This recent survey underscores the results of previous surveys. For example, a 2013 Adecco survey found that 92 percent of senior executives reported that troubling gaps in skills plagued the workforce. And a 2013 Manpower Group Talent Shortage Survey reported that 49 percent of respondents said that talent shortages were undermining their ability to serve customers. Employers cited absence of technical skills (48 percent) as the most significant barrier to fulfilling their needs.
Some of the hardest hit sectors include Finance/Insurance, Information and Telecom, Retail, and Manufacturing. Some of the positions that are the most difficult for employers to fill include engineering technicians; technical sales representatives; installation, maintenance and repair technicians; equipment and machine operators; and computer support specialists.
The challenge affects businesses of all sizes. "Employers of all sizes need to be more mindful of the cost of failed hires and high turnover," said Harvard's Fuller.
"The persistent talent gap we're experiencing is forcing all businesses, regardless of size, to develop a more disciplined process to improve their talent sourcing, development, deployment and retention cycle," said Accenture's Smith.
However, the middle skills job shortage tends to affect small businesses more seriously than larger businesses, for a number of reasons. For one, small businesses often don't have formal HR departments and formal recruiting programs that are set up to attract middle skills applicants. In addition, small businesses can rarely compete with larger organizations when it comes to wages, benefits, and advancement opportunities. "There is a tendency for small employers to slipstream behind larger employers," said Fuller.
According to the report, inadequate training and lack of experience were seen as the leading impediments to filling middle-skills positions. Over half (54 percent) of respondents said, "Trained talent is difficult to find," and 50 percent reported that, "Sufficient experience is not easy to find." However, just two in ten respondents (22 percent), including those who said their company is having trouble filling job vacancies, said they always are willing to consider hiring a new employee who requires additional training. And, of course, small businesses have fewer resources for training than larger businesses do.
In sum, according to the report, too many businesses have been relying on the "spot market" to fill middle skills needs, instead of investing in workforce development efforts.
This lack of talent is having a direct impact on business performance. Almost seven in ten (69 percent) of respondents indicated that the middle skills shortage regularly affects their performance, and more than one-third (34 percent) believe that the dearth of middle skills workers has significantly undermined their productivity.
The report added: "Despite the persistence of problems, no consensus has emerged on how to interdict this destructive cycle. The major stakeholders – business, educators and policymakers – have consistently called for other players in the system to improve their performance, while attempting to improve their own results in isolation."
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