Businesses say they can't find qualified workers. Are they right?

[spikepipsqueak]

Thanks, bilby. I was having this same argument with someone today and may just print your post and hand it to him.

 

[Canard DuJour]

I call bullshit on the employers claiming they can't find qualified workers.

Yep, they mostly can't find qualified workers at the offered compensation.

But they're not being entirely dishonest. Many actually believe that the optimal wage is set by the marginal revenue product of the worker, or somesuch convenient fiction. They're just getting a little wake up call from reality.

 

[ksen]

Overpaid according to whom?

The usual market rates before and after. The .com boom was accompanied by a spike in the salaries of the people that made those systems.

Overpaid according to whom?

(I didn't think this question would be so difficult to answer)

 

[AthenaAwakened]

I have skimmed thread, so I may have missed this if it has already been mentioned.

When I was working HR for a CRO, we were given the criteria for candidates for various jobs. What I noticed, besides nepotism and patronage, was the criteria for candidates and the actual job did not always jive. The criteria of candidates and the job description would match, but when you observed the actual worker working, they didn't use or need many of the skills outlined in those big binders on the bookshelf in my office.

That's a problem.

This is because HR people are the ones who write the skill outlines.

The skills outlines are written in accordance with the wishes and specifications sent down from the 12th floor. The outlines begin with the industry standards and are then "tweaked" by executives who need to prove to senior management they are worth the bloated salaries they are being paid.

 

[rousseau]

I wonder if the more accurate claim is that businesses cannot find qualified candidates at the offered compensation.

In my field (software) most companies are looking for exceedingly skilled people which are in chronic short supply. Those who are skilled enough to get a high wage are usually already employed.

I'm pretty close to entry level, almost an intermediate developer, and I'm constantly being contacted for positions looking for experience that I am nowhere close to having. So at least in my field there's a big skill shortage, and those who actually have skill are usually won out by the highest bidder, leaving small businesses left with those who are somewhere around incompetent.

All that said, in my field in particular actually training your employees is what businesses should be doing.

There's a shortage *IN SOME CITIES*. And you're young.

Try cities without a big IT reputation and when you're middle aged. They don't come knocking anymore.

Yea, I've heard similar stories before. I'm lucky in my foresight, having done extensive research on where opportunity is in my province. In Ontario, the Toronto area accounts for 60% of the dev work that's done in the province.... 60%!!. So I plan to get myself situated there for the long term.

 

[Nice Squirrel]

And besides the market, how do we determine who is over or underpaid?

Then you can't make the argument that people are over or underpaid. They are paid what they are.

Really? If 1000 laundresses make $35/hr ea and you hire one at $335/hr, would that one be overpaid?

But then who's making the claim the one who got paid $335/hr is overpaid? It's the same thing. You and I can make the claim.

So the market really doesn't matter? No one is over or underpaid, everyone is just paid. There is no value you can place on a type of work.

 

[Tigers!]

The closer your employment market gets to the utopian 'free market' model, the less likely it is that anyone will be trained to do anything. But that's OK, because the aristocrats can live lives of luxury anyway, as long as labour is dirt cheap. You don't need to train a backhoe driver (or to purchase a backhoe) if you can afford to pay for a thousand men with shovels. This is the labour model that works so effectively in Africa, where construction sites are a teeming mass of labourers with hardly a machine in sight.

Though the mass hiring of people instead of machines has an aspect that I had originally not thought of.
Many (many) years ago I used to work with a fellow who worked in India before independence (1947-48). He was a manager of a club that had extensive greens and gardens and hired many workmen. I asked him about the stories of all the labourers and not much machinery. He said it was true and I asked why?
He said that those men had families to feed and besides if they were busy working (for a pittance he agreed) then they wouldn't be on the streets causing trouble.
Not the best solution, but for some people it beats starving.

 

[funinspace]

80 hr/wk for 120% of what you pay the American for 40 hr/wk would still be a good deal. Also, they often play the game of hiring an "entry level" person for a far more senior position. I don't think your 120% is enough.

Uhm…my point was that H1-B workers make around the starting salary for a CS graduate (aka $56-59k). What I proposed was 120% of the average (or mid-career) salary of $97-102k, which would be roughly $120k on the national average for the average Joe IT guy. That would be a doubling of the required pay, for someone probably with marginal skills, possible language barrier issues, and would probably only be around for a few years. Though if competent analysis suggested the percentage should be 130% or 150% I’d be fine with that as well. . Or the company could hire the competent American for $100k, who will most likely work 50hrs/week. This all of course is not relevant when said company is working on bringing in the theoretical ‘rocket scientist’. FWIW, I’ve seen the H1-B visa game play out at 2 major computer industry corporations in their IT departments

http://www.networkworld.com/news/2013/091713-computer-science-major-earning-potential-273915.html
Computer Science (CS)
Rank: 8
Starting salary: $59,800
Mid-career salary: $102,000

http://education.yahoo.net/articles/degrees_with_solid_potential.htm
Average starting pay for computer science grads: $56,200*
Average mid-career pay for computer science grads: $97,700*

 

[coloradoatheist]

Overpaid according to whom?

The usual market rates before and after. The .com boom was accompanied by a spike in the salaries of the people that made those systems.

Overpaid according to whom?

(I didn't think this question would be so difficult to answer)

The same way that people think they are underpaid. By co-workers, companies, the individual, etc.

 

[coloradoatheist]

I call bullshit on the employers claiming they can't find qualified workers.

Yep, they mostly can't find qualified workers at the offered compensation.

But they're not being entirely dishonest. Many actually believe that the optimal wage is set by the marginal revenue product of the worker, or somesuch convenient fiction. They're just getting a little wake up call from reality.

I agree in part. The wage is set on different factors.

 

[ksen]

Overpaid according to whom?

The usual market rates before and after. The .com boom was accompanied by a spike in the salaries of the people that made those systems.

Overpaid according to whom?

(I didn't think this question would be so difficult to answer)

The same way that people think they are underpaid. By co-workers, companies, the individual, etc.

I think the correct is answer is they are considered overpaid by managers and executives who rely on keeping wages down in order to continue receiving their own bloated paychecks and stock options. IOW by people who have a vested interest in keeping wages suppressed.

 

[AthenaAwakened]

NOTE: No trees were killed in the sending of this message, but a large number of electrons were terribly inconvenienced.

ok

That was funny.

 

[coloradoatheist]

Overpaid according to whom?

The usual market rates before and after. The .com boom was accompanied by a spike in the salaries of the people that made those systems.

Overpaid according to whom?

(I didn't think this question would be so difficult to answer)

The same way that people think they are underpaid. By co-workers, companies, the individual, etc.

I think the correct is answer is they are considered overpaid by managers and executives who rely on keeping wages down in order to continue receiving their own bloated paychecks and stock options. IOW by people who have a vested interest in keeping wages suppressed.

And all workers pretty much think they are overpaid. So who is right? I think your answer is always workers.

 

[ksen]

I think the correct is answer is they are considered overpaid by managers and executives who rely on keeping wages down in order to continue receiving their own bloated paychecks and stock options. IOW by people who have a vested interest in keeping wages suppressed.

And all workers pretty much think they are overpaid. So who is right? I think your answer is always workers.

Did you mean to say all workers pretty much think they're underpaid?

Anyway, I don't know how you can look at the stagnant and declining wages of the past 30 or so years and not conclude that at this point in time the workers are most likely correct in that they are being underpaid.

 

[AthenaAwakened]

I think the correct is answer is they are considered overpaid by managers and executives who rely on keeping wages down in order to continue receiving their own bloated paychecks and stock options. IOW by people who have a vested interest in keeping wages suppressed.

And all workers pretty much think they are overpaid. So who is right? I think your answer is always workers.

Did you mean to say all workers pretty much think they're underpaid?

Anyway, I don't know how you can look at the stagnant and declining wages of the past 30 or so years and not conclude that at this point in time the workers are most likely correct in that they are being underpaid.

Don't forget the overall increase in worker productivity.

And the right's answer to the growing gap between rising productivity and falling wages?
Eliminate the minimum wage so employers can pay less but hire more workers which will increase productivity and make the gap wider.

 

[Jason Harvestdancer]

So, a shortage of skilled workers.

Having recently come off of a stint of unemployment, I find this interesting. But then I have a mismatch between my degree and experience, so I find it difficult to get as far as the HR manager.

Issue one is that hiring ain't easy. You've got to work hard to make sure you're not hiring a worthless bum. There was an episode of King of the Hill where Strickland Propane hired a drug addict. Since that increased the number of people working at the company above some legal limit, Hank was unable to fire the druggie and instead Strickland Propane had to make all sorts of accommodations for his "disability".

Issue two is getting the applicants in communication with the businesses. I found that the larger the company the more they follow the "checkbox method" as I call it - don't even look at the resume unless certain qualifications are checked off. Make the applicant fill out an on-line questionnaire along with submitting a resume, and if the checkboxes aren't checked then don't bother. Interestingly that leaves out people who may actually indeed be qualified but have a somewhat nontraditional route to qualification.

Then there's recruiters. I began to hate them. Looking at Monster and Dice I would get all excited about some listing, apply for it, and then find out that the listing wasn't from the company that would be hiring but some recruiter that was hired by the company in order to find candidates. After a while I began to wonder if these recruiting firms were really all they presented themselves as, and how many of them were actually some guy with a hard drive full of resumes. After a few months I only became excited if I spoke with the in-house recruiter.

And I also discovered that I truly loathe Cyber Coders.

I'm not sure that there is a shortage of qualified applicants, but I'm damn sure that there is a hard time trying to get the applicants in communication with the businesses.

Issue three is location. There are qualified workers in one location, a business that needs them in another location. While I was job hunting I made it clear that I was willing to relocate at my expense. Even then most companies that were not local were hesitant. They don't want to pay to relocate unless they absolutely have to. As for my offer, I'm not sure. Perhaps they worried I'd work there for a while and look for jobs "back home" and that I wouldn't stay. Perhaps they were worried that I'd try to negotiate them into paying my move. Perhaps they just wanted to show preference to local candidates.

Issue four is indeed training and education. People have been posting "I am the 99%" pictures, but one of the ones that was posted recently made the rounds of conservative commentary, because it was a woman (I think) who had a Masters Degree in Women's Studies, over $60,000 in student loan debt, worked as a waitress, had a kid, was on food stamps, and no spouse was mentioned. What the fuck is she going to do with a Master's Degree in Women's Studies? I at least had the good sense to major in STEM long before it became an abbreviated, even though my degree isn't exactly what I work in.

But then there is issue five, related to the checkbox issue, and that is the quest for a perfect candidate. When I transitioned out of the military we were told not to be intimidated by help wanted adds, because HR managers want "someone with an MBA from an Ivy League School, 20 years experience as CEO of General Motors, and be 25 years old." Yeah, I agree. The adverts I saw on Monster included "this is the latest and newest language, I want someone with 5 years experience."

Issue six is that now everything is done over the computer. While looking for a professional job, I also applied for "grunt work" at many fast food locations. Their computer prevented me from putting in an application at more than 3 locations in town in spite of there being more than three locations in town. The questionnaires were absurd. McDonalds was the worst: Choose which of these two you disagree with less, 1) I have a hard time getting along with other people, 2) I sometimes feel angry for no reason. what the fuck?! But the point is, there is no interaction with people anymore. A long time ago in a state far away I applied for my first job by going to the burger joint and filling out a paper application and handing it personally to the manager. My most recent application with the same company was never seen by any person as far as I can tell.

Issue seven is also related to qualifications, but in the reverse direction. The Krusty Burger didn't want to hire an Electrical Engineer to flip burgers. Surely I'm qualified, my resume says I'm a hard worker. If they say that they aren't finding skilled workers, I wonder by what standard. Are they looking for a narrow range of skill, not too much not too little? Probably they knew that I'd leave in a few months for a professional job.

There's probably more issues, but those are the ones I'm aware of.

 

[ksen]

Fantastic post Jason.

Computers, instead of making the hiring process more efficient have instead made it even harder for people to get connected with hiring decision makers.

I remember just back in 1998 when I first moved to Florida. I found my first job here by faxing about 200 resumes directly to companies over the course of a couple of days. I managed to hit one firm whose Accounting Supervisor had turned in her resignation the previous day so I got a call, had an interview and was hired. I don't think that's possible anymore today.

 

[coloradoatheist]

I think the correct is answer is they are considered overpaid by managers and executives who rely on keeping wages down in order to continue receiving their own bloated paychecks and stock options. IOW by people who have a vested interest in keeping wages suppressed.

And all workers pretty much think they are overpaid. So who is right? I think your answer is always workers.

Did you mean to say all workers pretty much think they're underpaid?

Anyway, I don't know how you can look at the stagnant and declining wages of the past 30 or so years and not conclude that at this point in time the workers are most likely correct in that they are being underpaid.

Don't forget the overall increase in worker productivity.

And the right's answer to the growing gap between rising productivity and falling wages?
Eliminate the minimum wage so employers can pay less but hire more workers which will increase productivity and make the gap wider.

Except one of the major issues we've had in the past 20 or 30 years is actually measuring where our productivity has gone. A lot of our gains come from improvements, and not just making it cheaper. So how do you compare 10Mb Internet speed with 1Mb. How do you compare medical advances? So to make this comparison between years ago and today we have to hope that the massaging of the data is correct. Using the the different measures of inflation that we have, we get different results for how much workers are doing compared to the past.

 

[Loren Pechtel]

Overpaid according to whom?

The usual market rates before and after. The .com boom was accompanied by a spike in the salaries of the people that made those systems.

Overpaid according to whom?

(I didn't think this question would be so difficult to answer)

Just because you don't believe someone can be overpaid doesn't mean it doesn't happen.

There is no real authority that will satisfy your questions.

 

[Loren Pechtel]

Yea, I've heard similar stories before. I'm lucky in my foresight, having done extensive research on where opportunity is in my province. In Ontario, the Toronto area accounts for 60% of the dev work that's done in the province.... 60%!!. So I plan to get myself situated there for the long term.

Single people are free to move around. With families it can cost the partner's job.

- - - Updated - - -

80 hr/wk for 120% of what you pay the American for 40 hr/wk would still be a good deal. Also, they often play the game of hiring an "entry level" person for a far more senior position. I don't think your 120% is enough.

Uhm…my point was that H1-B workers make around the starting salary for a CS graduate (aka $56-59k). What I proposed was 120% of the average (or mid-career) salary of $97-102k, which would be roughly $120k on the national average for the average Joe IT guy. That would be a doubling of the required pay, for someone probably with marginal skills, possible language barrier issues, and would probably only be around for a few years. Though if competent analysis suggested the percentage should be 130% or 150% I’d be fine with that as well. . Or the company could hire the competent American for $100k, who will most likely work 50hrs/week. This all of course is not relevant when said company is working on bringing in the theoretical ‘rocket scientist’. FWIW, I’ve seen the H1-B visa game play out at 2 major computer industry corporations in their IT departments

Ok, now it makes more sense. That probably would do it.