The Future of Talent Institute’s Kevin Wheeler says that if there really was a talent shortage, companies would either be boosting wages or investing in training.
Is the talent shortage a myth? A growing number of industry experts are lining up to tell us that we’ve been taken for a ride.
It has been 16 years since McKinsey & Co coined the term “war for talent” to describe the impact that a mass retirement of baby boomers would have on a competitive employment market.
Every day, we hear about the difficulty of getting skilled staff, while puzzling about the rising number of unemployed Australians and under-employed people.
Chairman of the US-based Future of Talent Institute, Kevin Wheeler, proffers the argument: if there’s such a shortage of talent, why aren’t we seeing corresponding wage rises?
“If firms genuinely could not find the people they needed, they would have either raised wages to the point that the jobs became highly attractive or they would have invested significantly in training. Neither has happened,” Wheeler writes in a blog.
Instead, he says that even in the high-demand industries such as IT, there have been cut backs in training and internships and salaries have remained stable for science, technology, engineering and mathematics (STEM) graduates.
“The supply has obviously been adequate to meet the demands of most organisations,” he says.
Despite the fact that there are more graduates than jobs available in many industries, many graduates decide that the career they studied for is not for them.
For every two students who graduate from US colleges with STEM degrees, only one is hired into a STEM job, according to a report from the Economic Policy Institute.
So, perhaps employers need to find ways to make the jobs more attractive to induce people to take them. As it is, in IT, they are missing out on the contribution of 50 per cent of the population because of the very low number of women in the industry.
Director of Wharton’s Center for Human Resources, Peter Cappelli, quotes a Manpower survey that says about 10 per cent of employers say the problem is really that the candidates they want won’t accept the positions at the wage level being offered.
“That’s not a skill shortage, it’s simply being unwilling to pay the going price,” says Cappelli.
Quality, not quantity
For companies such as software company Atlassian in Sydney, the issue is not that there aren’t enough programmers around, there just aren’t enough good ones.
This means that there is a demand to import talent from overseas, leading to the impression that we don’t have enough IT workers in this country.
Recruiters have been complaining for some time that employers are demanding “perfect fit” from each new recruit, rather than employing someone who can grow into the role.
They are also expecting that the recruit should have experience in the same industry, or the same kind of role, in their hope to find someone “safe”. This dramatically narrows the field – sometimes to a ridiculous degree.
Cappelli says many employers also refuse to consider applicants who are not already employed on the basis that their skills are getting rusty.
The use of screening software in the hiring process also means that all but the most perfectly fitting candidates are screened out.
Wheeler disputes the idea that the workforce will suddenly contract with a mass retirement of baby boomers (born between 1946 and 1964).
“Studies I have seen indicate that boomers will most likely defer retirement for some time because they have not saved enough to make retirement possible or because they remain healthy and want to continue working,” he says.
Automation means that fewer people are needed in many industries and the challenge for governments is to find ways to retain those who are displaced by machines and computers.
Wheeler says there is an abundance of talent: “wonderful, creative and entrepreneurial folks who are already using their skills to create a new world.
“We need to stop thinking about yesterday’s work world and imagine tomorrow’s. We will not need thousands and thousands of engineers, scientists, and technicians,” he says.