The myth of the ‘skills mismatch’

Is it workers, jobs or employers that aren’t good enough?

(J.P. Moczulski/CP)

Politicians and corporate executives are always decrying a “skills mismatch” crisis when talking about the paradox of companies who say they are having trouble finding enough applicants to fill vacancies even with unemployment in Canada still hovering above seven per cent.

As the story goes, there are plenty of unemployed workers anxious for jobs and plenty of employers scrambling to fill a glut of jobs that could help them expand their business and therefore create even more jobs. The problem, say politicians and HR professionals, is that the people looking for work aren’t qualified to handle the jobs that are available. The answer is usually a call for governments to spend more on education and to open the door to more highly skilled immigrants.

Matt Marchand, president of the Windsor Essex Regional Chamber of Commerce, cited a “skills mismatch” this month to explain why Windsor, which has been badly hit by the downturn in auto manufacturing, still has the highest unemployment of any Canadian city. (It topped 15 per cent in 2009 and is still around 9.5 per cent.) Part of the problem, he told the Windsor Star, was that despite a heap of unemployed workers, many of them coming out of the automotive and manufacturing sector, companies can’t find enough people to work as welders and machinists and are therefore having trouble expanding their business.

Enter former Times journalist at Harvard sociologist Barbara Kiviat, who argued this week in an essay in the Atlantic that the “skills mismatch” conundrum is largely a myth.

According to Kiviat, the skills mismatch narrative began in the 1980s and paralled the declining trend of on-the-job training and the rise of expensive universities and colleges, which shifted the cost and responsibility of training workers from the employers to the workers themselves.

She writes:

“…what changed was how we view the relationship between workers, skills, and jobs. For instance, at a Department of Labor “skills summit” in 2000, then-Federal Reserve chairman Alan Greenspan described a shift in thinking about who bears responsibility for developing and updating workers’ skills, explaining that over the past few decades, on-the-job training had given way to formal education programs — those that would, presumably, turn out fully qualified workers in advance of having a job. As that responsibility shifted, so might have our definition of what it means to be adequately skilled.”

The same seems to be happening in Canada, where a study from 2005, which used 1999 numbers, showed that less than a third of workers were receiving any on-the-job training, with an average training time of just seven days. Yet it also found that most workers were clamouring for more workplace opportunities to upgrade their skills, with just nine per cent of workers declining training offered by their employers, mostly because they were too busy with other work.

A 2007 study from McMaster University, which used 2001 data, showed that the bigger the company, the less opportunity for on-the-job training. Fewer than three per cent of low-paid and 18 per cent of highly paid employees of companies with more than 500 people had opportunities for employer-sponsored training, with manufacturing jobs offering much less training than service jobs.

After analyzing data gleaned from surveys of manufacturing employers, Kiviat writes that over-qualification has actually become a much bigger problem when it comes to labour shortages than a lack of skills. The top reason manufacturers cited for having trouble hiring skilled workers, she writes, is candidates “looking for more pay than is offered.”

The skills mismatch argument, Kiviat says, mostly serves an ideological purpose since it has given politicians on both sides of the political divide an opportunity to blame the other for high unemployment, while employers get an opportunity to demand that taxpayers and workers, not companies, bear the cost of training employees:

“The term [skills mismatch] is used to talk about technical manufacturing know-how, doctoral-grade engineering talent, high-school level knowledge of reading and math, interpersonal smoothness, facility with personal computers, college credentials, problem-solving ability, and more. Depending on the conversation, the problem lies with high-school graduates, high-school drop-outs, college graduates without the right majors, college graduates without the right experience, new entrants to the labor force, older workers, or younger workers. Since the problem is hazily defined, people with vastly different agendas are able to get in on the conversation–and the solution.

The skills mismatch trope also offers a little something for everyone politically. Those on the right get to talk about taking personal responsibility for upgrading one’s skills, while those on the left get to emphasize how we must do a better job with education, that great pathway to an egalitarian society. Between the two sit the nation’s employers, who get an argument for sharing labor-training costs with government agencies, non-profits, and institutions of higher education; it would hardly be fair to expect them to bear the full burden if the American workforce itself is defective. Finally, a fast-growing industry of for-profit colleges get reassurance that their student pipeline will stay full.”

Examining the real reasons driving the apparent “skills mismatch” is an important issue given the profound effect it has on public policy, everything from funding for colleges and universities, to our willingness to take on huge student loans, to immigration policy.

The real tragedy of the skills-mismatch story seems to be the economic costs of all that lost human potential generated from taking a chance on workers not 100 per cent qualified for the job, particularly highly educated ones. Think of the innovation that could be generated by hiring unconventional candidates for jobs.




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The myth of the ‘skills mismatch’

  1. It’s true. As one who came into the paid workforce in the 60′s, I had several
    jobs that were essentially on-the-job training. And usually at full pay from day one.
    Things started changing through the 80′s, to the current point where business
    will provide some training or upgrades .. but only if they can wangle government
    into paying for it.
    And then there’s the wonderful movement to unpaid internships, of which I will
    not speak.

    • Companies like Caterpiller are using demands for jobs training funding as one of their demands in order to locate plants. It’s a poor use for tax payers money – training workers for a specific company.

  2. Here’s a tip for any company facing a “skills mismatch”: pay more. I guarantee you, that “skills mismatch” will vanish right quick.

    The problem is that some companies would prefer taxpayers to pay more so that the skilled labour pool will be glutted enough that said companies can get the labour they want without paying more for it. It would be a mistake to let them get their way.

    • A good friend who has trained maybe half a dozen in his trade, and currently has three in the pipe runs into an interesting problem. When he sends his trainee out on a job, or takes him with him, the client doesn’t want to pay for it. It takes about three years in his occupation to get close to production pace.

      The question is whether we as employers and who are in fact training people ‘let them get their way’.

      You say ‘pay more’. Will you pay more? If you take your car in for repair, will you pay 1.5 to 1.75 the labor rate so that they can afford to train someone?

      In my industry, it takes about 3 years before an apprentice can earn his wages. And it takes 10 years of experience to become a fully qualified tradesman that can take on any project.

      Would you be open to an indenture system? A local firm trained many over the years but found that they either moved elsewhere or went into competition with them. They don’t train any more, oddly enough.

      As for paying more, sorry. most aren’t worth it. The more baggage you come with, experience in other endeavors, education with debt just makes you more expensive, and rarely make you more valuable.

      • You’re offering a good take on the prohibitive costs of training yet offering no solutions.
        Contract. If an apprentice wants to be trained, contract them and enter a non-compete clause. Business is business after-all.
        If companies refuse to train and tax payers balk at funding training, who in the world would intentional send themselves to the sewer with a lifetime of debt and minimum wage after earning a degree?
        Can’t rely on “poaching” forever without driving up salary costs.

      • Your opinion is weak, and not based on facts. Sorry, but there is NO trade out there that takes 10 years of training to master. Give me 10 years and I could train a monkey to operate a nuclear power plant. Even Brain Surgeons don’t have to train for that long. Your perception on training is the whole problem in Canada. The lengthy training and certification requirements are burdensome and only serve to separate people from employment. You could take any reasonably intelligent unemployed person in society, give them a few weeks of classes in a trade, a couple months on the job training, and let them go to work. The labor shortage perception in Canada is a myth. Give people a chance, and they will prove themselves.

        • You might want to experience what you’re talking about before you speak, Mauvilla. My trade is a 3 year apprenticeship, but there is SO much to know that an apprentice doesn’t even BEGIN to be qualified until after 2 years. The apprenticeship is nothing more than teaching the basics of the trade, and, more importantly, the skill of thinking logically and analytically — which comes easier with understanding the machines in the trade. True skill only comes with time, and, in my case, it took about 5 years. A couple of months WILL NOT cut it. The same is true of any skilled trade — welder, machinist, plumber, electrician. You speak from theory (and flawed, at that). I live the reality.

          • I don’t speak theory. I speak from years of experience actually performing work in several trades. I have worked as a welder, heavy equipment mechanic, construction, and most recently high tech computer system engineering and programming. In my welding shop classes, we could all weld a perfect bead (using old AC stick welders) after 2 weeks of practice, in all positions (vertical, horizontal, upside down). I am a DIYer and whenever I want to learn how to do something, I learn. Humans have a remarkable capacity for LEARNING, and we seem to be good at it. Sorry,but everyone wants to think their job is difficult, special, and should take many years to learn. They are wrong. Sure, someone with years of experience at a job will be very good at it; however, attaining a respectable level of work quality in a trade doesn’t take many years of study. Unless you are talking about medical surgery and a few high tech engineering occupations (nuclear, chemical). Everyone is replaceable. And, hate to tell you, thinking both logically and analytically is not a difficult “skill”. That pretty much comes with having normal brain activity (as in, not dead). If you truly think your job is that hard, give details of your occupation. I am curious why you are so defensive and what trade you practice that takes 5 years to learn. I am defensive because there are so many people out of work right now in Canada, and can’t find work because the gatekeepers to these jobs believe as you do, that the jobs are too difficult for most people. I call BS.

  3. I’m 30, have an Arts degree and a diploma. Once upon a time, they would have been considered enough of a base to start a career in any number of fields. As it stands, I’m over qualified for admin work (a 4 year degree vs a 1 year community college program) and my skills don’t perfectly match those a particular company is seeking, despite the fact many are similar. I’ve been out of professional work for over a year and it’s an awful feeling knowing I wasted my time on an impractical education. I should have gone to trades school.

    • Oh cut it out. If you’re going to push propaganda, don’t make it so obvious.

      • I’m not sure what exactly you are calling propaganda, but BCBanter’s situation is relatively common.

        • The rightwing here and in the US is on a kick to promote trade school and ‘manly’ things rather than anything in the ‘arts’. Numerous articles and campaigns exist to convince people that welders are more wanted, and paid more, than people with degrees in the humanities….even though society needs professors, journalists, judges, psychologists etc just as much as ever.

          It’s like Harp moving Canada back to being hewers of wood, drawers of water etc

          • Society needs more professors and jounalists and psychologists and….. Lawyers? You just keep getting nuttier by the day. The fact that hands on, productive skills will trump silly arts degrees any day of the week is a lesson many of us had to learn the hard way. What BCbanter talks about is the cold hard reality of the marketplace. A good welder will out-earn almost anyone in the non-productive humanities fields, including many Ph Ds. But as a “Global Economic Development Analyst” (isn’t that what you called yourself in another post?), you’d be the last one on earth to know that.

          • Society…as the population gets larger….needs all kinds of skills….whether you like them or not.

            ‘Hands on, productive skills’ are part of the manufacturing/industrial age…which is now over.

            No, a welder does not out earn a PhD….and yes, because I’m involved globally, and not just at your bar…I know exactly what robotic workers are worth compared to thinkers in the arts and humanities. Nada.

          • You’re funny. You don’t mean to be of course. But you are. I never said all hands on workers out-earned all Ph D’s. I said a good welder will out-earn a Ph. D in the humanities. The fact that you would dismiss a skilled welder or machinist as a “robotic worker”, and suggest those skills belong to a bygone era, demonstrates an alarming (though highly entertaining) level of ignorance.

            It is true that we’ve subcontracted most productive work to the Third World. But in case you haven’t noticed (not your fault really, being “involved globally”, you are no doubt immersed in much bigger, more vexing issues), that’s a real problem. Our economy isn’t doing so well these days, and we’ve diverted most of our skilled trades into the housing industry. Most of our entrepreneurial class has abandoned the idea of investing in productive manufacturing assets on our own soil and the “thinkers” seem to be perfectly OK with this. They, along with the student protesters in Quebec, think the problem will just go away if only we make university degrees cheaper. Yup. More humanities graduates ought to do it.

          • Well, unless your welder makes 2-300K, he’s outclassed by a PhD.

            Welders and machinists etc are fine, but they are jobs that don’t require deep thought or any vast amount of knowledge. It’s a useful skill but it’s not an education…..and the world needs more than a skilled trade.

            In fact, ‘outsourcing’ will continue because we have all those skills in the world, and they work cheaply…….which is why we have to move to a knowledge economy.

          • Your last post makes much more sense.
            Out-sourcing of grunt labour is inevitable, and in fact positive. There’s no future for a Canadian worker in textiles for example (is such work even done in Canada anymore?), nor should there be. That’s the type of work that should be off-shored, and we’re better off for it. Ditto for much call-centre service work.

            I agree fully that we need both highly educated people for R & D, and skilled hands-on people. But what we are producing right now is a surplus of general BAs and general science degrees, and a dearth of skilled technicians. And it’s not just a misallocation of education funding, it’s systemic in the way our economy is structured, and even in our attitudes. We look down on productive work. I used to look down my nose at the “trades” (uttered with a look of disdain) myself. We’re far too happy to let China build everything for us, but there is a long term cost associated with doing so, and I fear we have greatly underestimated it.

          • Well education is a huge topic that can’t be covered in a couple of posts on here, so skipping over content whether accidental or deliberate, is to be expected.

            When people graduate high school they have no actual job skills. They have general knowledge. That used to be ‘entry level’. But people need more general knowledge now to function….and that’s what a ‘bachelors’ degree has become…..the new entry level. You still have to acquire a higher degree, or a specific degree to have a ‘job skill’.

            There have always been people who figure that their entry level of education [whatever it was at the time] entitles them to top dollar a year and easy living…..and right away. That’s just youth and inexperience…..and the fact teachers are never straight with them.

            As to job skills themselves, the Chinese are doing manufacturing …everything from plastic tat to high tech…..and Indians are doing administrative and medical work…….we passed textiles and call centers long ago.

            Manufacturing is gone…..what isn’t currently being done by others elsewhere, will be overtaken by robots and 3D printing, [replicators] ….within a short time, so there isn’t much sense in going that route.

            Germany is getting the last of it with high quality manufacturing of specific products. But they’re just one step ahead of the bailiff.

          • I guess that is my point. Very few of us are Ph D. material. Yet we all must have a contribution to make. What about the rest of us non-Ph Ds? I’ve done OK but many BAs are struggling. Certainly the West cannot hand over all of its productive capacity. That would be a very negative thing.

          • Well….we don’t actually know how many people are PhD material…..most people never get a chance to try. There are certainly brilliant people who never finished high school….or even elementary school.

            And goodness knows there are PhDs who aren’t PhD material….as they used to say ‘some don’t have enough sense to come in out of the rain. Our rattle-trap educational system allows both these disasters to happen.

            So people do what they have to do….even though both they and society are the poorer for it. I would certainly like that to change.

            As to the rest of it….there really is no ‘east and west’ anymore….it’s one world…..and manufacturing will be done with robots and replicators anyway.

          • I was saying “West” as in the countries formerly known as the West. We can call them whatever, but they can’t simply hand over all their productive assets. If robots are indeed taking over, we wouldn’t be using cheap labour in the Phillipines. Robots don’t earn wages, and therefore work just as cheaply here as overseas. The advantage of off-shoring work done by robots is what exactly?

            As for education, maybe brilliant people shouldn’t need to complete Ph Ds. If they’re already brilliant, they’ve got a contribution to make now. Many geniuses are bored silly with school and classrooms in general. Much of the pursuit of higher education these days is more about credentialism than it is about about higher learning. (Note: I said “much”, not “all”.)

          • We use cheap labour until it isn’t cheap anymore…..then we use robots

            Robots are already operating factories. Have been for some years.

            Off-shoring keeps wages low, but factories overseas also mean you’re near your market. The US is pretty full up with cars and fridges etc….China and India aren’t.

            Education…..how do you tell people are brilliant? The best we have is an IQ test, but there are major problems with them. And not all people with high IQs come up with ideas. Plus of course, people who do genuinely come up with new ideas are usually thought to be crazy, and treated as such.

            I agree we have an enormous amount of credentialism, and very few genuinely educated people………but you do need some basic knowlege in a subject, and an awareness of what other people have already discovered. There is no sense reinventing calculus.

          • How many who start higher education end up with a PhD, or better, one that will pay $2-300k? Not very many. People smart enough and capable of doing work at that level are the minority. What about the rest?

            There is a real demand for skilled trades. The pay is good. The nasty truth is that those who weren’t good enough to get a PhD and do well probably won’t be able to do much better in the trades.

          • If you want a trade, go to trade school.

            If you want an education, go to university.

    • Perhaps it’s your attitude….

    • Yes, trade school would have been better. I’m in my forties and still kicking myself for my stupidity for pursuing an economics degree 20 years ago instead of a trade. I’m making good money now, but those who went to trade school invariably live in bigger homes and drive nicer cars than I do. It didnt take them until their mid-30s to start making real money. It was (and remains) one hell of an expensive lesson to learn.

  4. Employers are looking for experienced workers at minimum wage. Its all supply and demands, if they want skilled workers they will raise the pay rate to compete for the required workers. Dont buy into their shortage of skilled workers bs.

    • That guarantees either the work moving off shore, or you paying more. Are you willing to get your house built by someone who has an active and effective apprentice training program? it will cost you more than the guy who poaches experienced workers.

      • How can you move building a house off shore?

  5. Time to start training people again, lazy, lazy employers

    • Agreed.

    • How many have you personally trained? Serious question. I’ve trained 4, one made it, two didn’t, one is in process and doing well.

      At my cost. What have you done? Or are you lazy lazy?

      • I’m not an employer.

  6. This is what happens when you have huge HR departments whose main goal is to weed out unsuitable applicants. You focus on patching holes rather than building what you need.

    • Agreed. HR has become parasitiic and obsrtuctionist. They are bureaucrats first and foremost. (Yes, the private sector has those.) The more barriers they put in the hiring process, the more work is created for HR departments. Testing and interviewing 30 candidates for a position, then rejecting all of them only to advertise again for a new round of applicants, provides job security for HR flunkees. Ditto for convoluted, multi-stage qualificatoin processes. I’ve seen it happen.

  7. The right-wing just love to blame the unemployed …there are jobs but you just don’t have the skills for it. So, why don’t you go get the training if you want the job that badly. Ask Flaherty, who would tell you that ‘no job is a bad job’. Wonder why Flaherty won’t flip burger at McDonald’s.

    • Actually, the article says the “skills shortage” argument serves both ends of the political spectrum equally well, as each figures they have something to gain from promoting the myth.

  8. Companies that hire for credentials over character are fools.

  9. Finally, an accurate article on the ‘labour shortage’ myth and greed that perpetuates it.

  10. I have worked in the training departments of various companies for over 20 years. It is society’s responsibility to prepare a citizen to be able to think and be disciplined enough to do a general job. It is the responsibility of the company to train that person to do a specific job. Workers are not replacable widgets that can be thrown away as soon as a new model comes out. Companies are expected to spend their own money on upgrading equipment; it should be the same with upgrading their employee’s job skills.

  11. The decline of on the job training seemed to parallel the decline of loyalty (in both directions). The trainee will now peddle his (or her) new skills to the highest bidder as soon as they are acquired, while the employer will dump an employee as soon as there is a slow-down in business.

  12. I’ve been on both sides. Both can be a pain as a trainer and as a new worker. Still I tend to find in most cases it worked out for the better as it challenges both people to reach higher.

    Duds happen and it’s frustrating. Yet there has to be some questions asked if a company is suffering a high turnover rate of entry level positions. Regardless of the field and personal. Some people have skills and experience, yet no means of teaching them to others productively.

  13. This is what happens when Canadian business attempts to follow the US lead when it comes to employee training policy (or, rather, the lack of it): almost no state-industry-higher education R&D and training partnerships, and leaving it up to the employee/student to take all the risk on his or her education.

    On the other hand, the only powerhouse left in the Europe Union, Germany, is
    today figuring out the next generations of technology, as they know the
    Chinese will be copying our current state of-the-art-stuff. Many high school students who show the proper aptitude complete their diploma while apprenticing for a long term career in German companies.

    Concerning unpaid internships, only the children of the well-off or rich can afford to do that, which only widens the gulf between the haves and have-nots.

  14. There are many problems to overcome here. First, for many years now the emphasis on post-secondary education, while valuable, has been away from trades and more towards degrees. (Never mind applicable degrees! In my neck of the woods, a lady with a PhD in Philosophy is finding a helluva time trying to find work in a trades town.) So now we have a shortage of qualified tradespeople. Second, the young people thinking of entering trades do not want to put up with the (comparatively) low wages of the apprenticeship. (Never mind that, while taking the schooling/classes of the apprenticeship, the apprentice can receive EI — try that in university!) Third, the companies looking to hire are mostly wanting completely trained personnel. And since each company needs something just that little bit different, the “plug” they need to “play” is extremely rare. Not only that, but most large companies today don’t want to have employees that stick around for 25 years or more — pension payments eat into their profits.
    So, how do we get out of this mess? No easy answers.

    • It seems an easy enough answer for companies who want “something just that little bit different” to actually provide ON THE JOB TRAINING.

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