The Skills Gap: Is It A Legitimate Problem for Manufacturers?

14273689087_19cfaafe64_mYou’ve probably seen a lot of mentions of the so-called “skills gap” lately. The skills gap is defined as the difference between the skills that your employees need versus the ones they actually possess. Given how much the skills gap is discussed, and maybe given your own experiences, you might be surprised to know that there are actually a fair amount of experts out there who think the skills gap is a myth.

As far back as March 2014, Paul Krugman wrote for the New York Times that the skills gap is a “zombie idea” — an idea that won’t die. Krugman writes,

Some employers do complain that they’re finding it hard to find workers with the skills they need. But show us the money: If employers are really crying out for certain skills, they should be willing to offer higher wages to attract workers with those skills. In reality, however, it’s very hard to find groups of workers getting big wage increases, and the cases you can find don’t fit the conventional wisdom at all.

More recently, in August 2016, Andrew Weaver, a professor at the University of Illinois, wrote a paper that seemed to dismiss the idea of the skills gap. The paper, which you can read an abstract of here, claims that a survey showed 75% of companies are not having problems hiring skilled workers. The paper suggests that if higher level math is needed, those jobs may be harder to fill, but tech jobs do not have a skills gap problem. The paper made quite a splash when it was published.

Are we talking about the same things?

One of the problems with the skills gap conversation is that we all may be talking about different things. Usually when manufacturers are talking about the skills gap, we are talking about not having enough skilled forgers, welders, and other positions that require vocational skills. Other people, like Paul Krugman and Andrew Weaver, may be looking at the entire economy and all types of manufacturers.

While Paul Krugman was calling the skills gap problem a zombie issue in 2014, Inc Magazine detailed, a month later, why it’s real. The article, which ultimately pins the blame on employers, notes:

The feeling is particularly acute at small and midsize companies. In a U.S. Chamber of Commerce study, 53 percent of leaders at smaller businesses said they faced a “very or fairly major challenge in recruiting nonmanagerial employees.”

And in a survey of Inc. 5000 CEOs last year, 76 percent said that finding qualified people was a major problem.

What’s really interesting about all this is that it’s not just the usual suspects who are complaining about the lack of good workers. You know: software companies that want to hire programmers from India. It turns out that good old manufacturers are having trouble finding excellent employees.

Meanwhile, in September 2016 The Wall Street Journal reported that the skills gap in the manufacturing sector has been getting worse every year since 2009.  The article says:

Research-intensive sectors, such as pharmaceutical or aerospace manufacturing, often seek candidates with science and engineering degrees. Other hard-to-fill roles are middle-skill positions, such as maintenance technician, that require education or training beyond high school, like an apprenticeship or a course at community college. Traditional skilled manufacturing jobs, such as die maker or welder, have been drawing an insufficient number of new recruits as the manufacturing industry shrank.

So, it seems economists and other experts cannot agree for sure if there is a skills gap. You’re in the trenches though. What are you seeing? We would love to hear from you about this issue.

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