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- Skills Mismatch
Businesses are struggling to tackle the widening disparity between staffing needs and qualified applicants, some are coming up with creative solutions
Last year, Traci Trapani needed employees for her sheet metal fabrication company. None of the applicants, however, had experience in the industry. So Trapani did something unorthodox: she hired a woman who had been working in a fast food restaurant and invested in teaching her the sheet metal business.
“We took a risk and hired this person,” said Trapani, co-president of Wyoming Machine in Stacy, Minnesota. “She’s been here now for a year and she’s been doing a great job.”
Trapani is one of the small business owners grappling with a widening gap between staffing desires and the qualifications of the available workforce. In May, more than 80% of small businesses that were hiring said they had few or no qualified applicants for their open positions, according to a recently released report from the National Federation of Independent Business (NFIB). And 13% of respondents named the low quality of available labor as the most pressing challenge to their businesses, the highest proportion since 2009.
Some argue that high schools and colleges are not adequately preparing young people for the jobs that are available today; others contend that businesses should offer training programs and higher pay to attract and shape the workers they want. Everyone agrees that employers’ desires and workers’ skill sets are increasingly out of sync.
“There’s definitely a gap between what we’re training people to do and where the jobs are,” said John Arensmeyer, founder of Small Business Majority, an advocacy group based in Washington DC.
While no business is immune from these hiring difficulties, small companies often find the mismatch between openings and applicants especially troublesome. Across industries, therefore, many of these enterprises are tackling the problem by finding creative ways to approach recruiting, hiring and training. At the same time, collaborations between business, government, and community groups are helping to lay the groundwork for a long term solution.
Many smaller enterprises simply don’t have the resources they need to find the best, most qualified candidates. In these businesses, there are generally no human resources departments that can dedicate themselves to hunting out candidates, said Holly Wade, director of research and policy analysis at NFIB.
Trapani, whose company employs 55 people, agreed.
“We don’t really have enough employees to have a full-time staff person that’s doing nothing but recruiting,” she said. “You can only afford to spend so much time on determining where you’re going to get your next employee.”
Small businesses also have less ability to absorb unexpected financial blows, making them more cautious when it comes to hiring anyone who doesn’t match the job description completely, Wade said.
“It’s likely they are being more selective and looking for the perfect applicant,” she said.
Small businesses are also more likely to be working in unusual niches, making it harder to find people with the specific experience needed by employees. Reliable Underground Service Technicians in Allendale, Michigan, for example, provides cathodic protection services – a technique for preventing corrosion in pipelines, bridges, and other metal structures. Job applicants rarely have any knowledge of the highly specialized field, said owner Tim Corbett.
In the six years since he launched the business, Corbett has tried several methods of choosing employees, including aptitude and personality tests. Eventually, he realized that the only way to end up with reliable employees is to create them.
Now, Corbett interviews potential hires, looking for confidence and problem-solving skills, then puts the selected candidates through an extensive training program. Today, he has about 20 employees and lower employee turnover than other companies in the field, he said.
Such internal training programs are not an option for everyone, however. Many small businesses operate on thin margins and simply can’t afford the expenditure of time and money a comprehensive training program would require, said Rachel Unruh, chief of staff at the National Skills Coalition.
“That’s just not feasible for small and medium-sized employers,” she said.
In fast-growing fields – mobile technology or cloud computing, for example – snagging talented software developers or systems engineers can be harder for smaller, younger companies that haven’t yet developed a brand as an employer.
Dyn, a Manchester, New Hampshire company that offers services to help improve the performance of clients’ internet connections, has grown from 25 employees in 2009 to about 400 today. The growing company was careful to cultivate a strong workplace culture in order to attract and keep the best possible employees, said Kyle York, Dyn’s chief marketing officer. Over the years, recruiting has remained competitive but has definitely become easier, he said.
“Everybody is fighting for that employee pool,” he said. “But your happy employees are telling their friends. It is a more stable, developed workplace.”
More far-reaching efforts to narrow the skills gap are also underway.
Increasingly, state and local governments, community colleges, and industry members are joining together to create more opportunities for people to learn in-demand skills. Employers in a specific industry work with community colleges or workforce groups to help develop targeted training programs that will produce workers companies want to hire, said Unruh.
These collaborations, often called “sector partnerships”, are showing up in the manufacturing, health care, and construction industries, particularly, she said. And federal legislation passed last year contains provisions to encourage the creation of more such partnerships in every state, she said.
“It’s sort of cooperative purchase power for training,” Unruh said.
In New Hampshire, Dyn is one of the founding partners of STEAM Ahead, an initiative aimed at pushing more high school students to explore science and technology fields with the ultimate goal of strengthening the workforce in years to come.
As far as Trapani is concerned, these solutions can’t come fast enough, for both employers and the economy.
“Small employers employ a huge number of people,” she said, “so that fact that we’re all kind of struggling with this compiles into a relatively big problem.”