Lack of Qualified Workers for Small Businesses
The Wall Street Journal reports that small businesses are complaining about the lack of qualified workers. In spite of the very high number of unemployed workers, many companies find the former lacking in skills or with obsolete talent for available jobs. Blame is placed on the U.S. educational system for its failure to provide the needed technical and engineering skills for students.
In a new survey by The Hartford Financial Services Group, 40% of small businesses (defined as companies at least one year old, with fewer than 100 employees and revenues $100,000 or more) say it is “not easy at all” to find good help. Only 14% say hiring good workers is “very” or “extremely” easy.
The difficulty in finding qualified workers also shows up in the October report by the National Federation of Independent Business that polls small businesses that typically employ five people and have median gross sales of about $350,000 annually.
Almost one third of NFIB respondents say they have seen few or no qualified applicants for their firms’ open positions. That despite an increasing share of business owners raising compensation.
Much has been made of the failure of the U.S. educational system to produce highly skilled science and engineering professionals. But it isn’t only technical expertise in demand. Finding people who get to work on time seems to be difficult.
In August, the Federal Reserve Bank of New York asked regional manufacturers about finding good workers. The second biggest challenge — after computer skills — was hiring workers who were punctual and reliable.
Businesses of all sizes have been slowly increasing their demand for labor since the recession ended. The Labor Department said Tuesday there were nearly 3.4 million job openings in September, the highest number since August 2008. Hiring is also up, suggesting the rising number of openings is not the result of companies holding back from making a job offer when the right applicant is found.
Small-business owners who are strapped for cash would probably like the government to provide the retraining. But that seems unlikely in today’s political environment.
The end result is an economy that has 4.2 jobseekers for every opening, yet many small businesses cannot find applicants for the work needed.
The gap highlights the problem of structural unemployment. Unemployed workers lack the skills needed or can’t sell their homes and move to areas where the jobs are. And the longer a person is unemployed, the greater the risk his or her talents will erode and become obsolete.
Fed Chairman Ben Bernanke has called long-term unemployment a “national crisis.” It could prove to be the longest-lasting hangover of the Great Recession.
