Employers Say They Can’t Find Good Workers, but the Fix Is Simple

A 'now hiring' sign advertising jobs fails to attract attention from prospective candidates

A “now hiring” sign advertising jobs fails to attract attention from prospective candidates | Justin Sullivan/Getty Images

It may be hard to believe for people in certain areas, but America is still brimming with opportunity. Though the economy is still shaky, and we’re likely due for some recessionary rumblings in the near future, we’re sitting near full-employment and most people who want jobs are able to find them. Still, many parts of the country are suffering from the results of globalization. Employers have sent jobs to other parts of the world or axed them completely, in some cases.

Yet, there are still millions and millions of job openings out there. And incredibly enough, there are many employers who are complaining that they can’t find anyone to come work for them — or at least anyone who is qualified.

A July report from the Dallas Federal Reserve, previously covered by Business Insider, contained a couple of quotes from employers explaining their plight. “Entry-level candidates cannot read or follow instructions. Most cannot do simple math problems. What is wrong with the educational system?” asked one employer. “The ability to find qualified employees is our largest problem at this time,” said another.

This is at odds with what we’ve been hearing for many years now — that there simply aren’t enough jobs out there, and that has caused the labor participation rate to fall, and for many American communities to suffer. But evidently, that’s not quite the case. The jobs are out there. People just don’t want them.

Jobs and wages

Employers interview applicants for jobs

Employers interview applicants for jobs | Justin Sullivan/Getty Images

Here’s the situation we’re facing: People want jobs. There are millions of jobs available. Yet, nobody wants the jobs that are available. Why? Because many of those jobs aren’t “good” jobs. They may not pay much, for example, or offer full-time hours.

What’s an employer to do, given the circumstances?

The answer is incredibly simple, but evidently, many of the nation’s employers just don’t want to face the music: They need to pay more. Low pay is the number one reason people quit their jobs, and when people quit, companies need to spend more to recruit, train, and retain new employees. It often ends up being more expensive to bet on the fact that you can find cheaper replacements than to just give out raises.

But with the economy on relative solid footing and unemployment hovering under 5%, the tactics employers have been using since the end of the Great Recession — when labor was widely available, and for cheap — aren’t working anymore.

The labor market, like most other facets of the economy, is subject to the ebbs and flows of supply and demand. That is, when there are a ton of eager workers out there, you can find employees who will work for less. Wages go down, on average. But when things tighten up — say, the unemployment rate drops because more people have jobs — finding employees becomes harder, and you need to increase salaries to attract talent. Average wages go up.

But as most of us know, wage growth has been incredibly slow. And even though a tight labor market is putting upward pressure on wages (an unemployment rate below 5% should lead to higher salaries, as firms get competitive when trying to attract talent), employers are still not willing to raise wages.

Workers wait in a queue to find out the details of their redundancy packages at an English factory

Workers wait in a queue to find out the details of their redundancy packages at an English factory | Christopher Furlong/Getty Images

We even have proof that this is the case. A recent survey from WorldatWork showed that most employers are not planning on increasing salary budgets, or giving out big raises anytime soon. This, of course, would be the panacea that many companies are looking for, especially those who are having trouble finding and retaining workers. If you invested a bit more money in your employees, you’d have less trouble finding and keeping them.

One way some companies are avoiding raising salaries is by using labor loopholes, of sorts. Employers are utilizing contractors and short-term or temporary workers like never before, for example. Others are bringing in foreign workers to take over for more expensive domestic employees. Tech companies are gaming the H1B Visa Program to systematically replace American workers with cheaper alternatives, all the while claiming that they can’t find qualified Americans to work for them.

It’s a bummer, but it serves these companies’ bottom lines — and that’s what it’s really all about.

For employers who can’t seem to get applicants that have basic reading and writing skills? It’s not them. It’s you. This is a sign the labor market is tight, and that you need to do more to attract quality, skilled workers. For the time being, the economic environment is sending the signal that wages need to go up. Employers who refuse to budge are going to continue to be flooded with applications from workers they don’t want for jobs they can’t fill.

At least until they make those jobs more attractive to the people they want.

Follow Sam on Twitter @Sliceofginger and Facebook

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