In an op-ed in the Washington Month Peter Orszag, former Obama Director of the Office of Management and the Budget, ponders how with so much continuing unemployment the number of advertised job opening has risen by 50% while actual hiring has only increased by 5%? He suggests four reasons:
- Mismatch between the work that companies need done and the skills that workers have.
- Employers are offering jobs at wages that are too low to attract good applicants.
- The gap between job advertising and new hires reflects the growing use of companies’ “internal†labor markets.
- Companies have reduced their “recruiting intensity.†They advertise jobs but don’t have much interest in filling them.
I think his analysis is good and well worth reading and I suspect that all of those factors are at work to some degree. However, there are two more factors that Dr. Orszag might consider.
It may be the case that companies are unwilling to hire the long-term unemployed. The number of long-term unemployed admitted to by the Bureau of Labor Statistics is nearly 40% of the unemployed. Once you’ve taken into account the large number of long-term unemployed who have given up looking the actual percentage is undoubtedly larger.
It also might be the case that companies are fishing. In my field it used to be common practice both for employers and workers to put out feelers. Employers would advertise jobs with unrealistically high requirements and unrealistically low compensation to see what they’d get. Workers would apply for jobs making absurdly high wage demands to see what was out there.
In a buyer’s market or even what’s assumed to be a buyer’s market employers may be putting out feelers of this kind to see what’s out there, to test the wages they’re offering, and maybe get somebody who’s better for less money. By doing this they’re also bolstering their case that they need to import foreign workers because nobody in the domestic job market has the skills they need.
Your “fishing” sound like Orszag’s item four (lack of “recruiting intensity”), which is what I suspect is happening. Also depending on the type of job, its possible that employers are going through the motions of trying to hire someone that they really wish to fill with an H-1B visa.
I’m more picky than I used to be, and I’d rather not hire the wrong guy, even if it means (as it does for me right now), having reqs open for almost a year.
In this market, it’s harder than it used to be to convince someone to quit if things weren’t working out – normally, you could help them find something that’s a win. Now, they don’t want to lose their mortgage, so hiring the wrong guy is even more painful.
On top of that – while I have money for someone, I’m still short staffed. Before, if I had a team of ten, I could afford one guy who wasn’t doing anything but attending conference calls. Now, on a team of two doing the same work, I can’t add a third that’s a millstone around everyone else’s neck.
Adding to that… while I’m sure there are many people out there who are that good and who are having bad things happen to them, they’re mostly people with experience and a network that’ll help them find a job without applying cold to a job ad.
What I’m talking about is a bit beyond lack of recruiting intensity. It’s that either there is no job or that there’s already somebody holding the job and they’re looking for somebody better/cheaper.
No one is more unemployable than an unemployed person, or so I have heard.
@Dave, I guess I’m more inclined to think that there are small businesses in the ten to forty-nine employee range that would be willing to add an employee or two if they met tight constraints, but they can get by for awhile without. The constraints would relate to the amount of training, likelihood of staying for more than short-term, potential personality conflicts with existing employees, and whether the employee could increase revenue for the firm.
This is why we need more immigrants. They show up here full of hope and energy, then they find out that they’re unemployable, partly because their English is not perfect, partly because they look different from the boss, partly because the boss has to pay health care benefits, etc.
So the immigrant starts his own business, a steel empire (Carnegie), a Google (Brin), the AC electric grid (Tesla), and on and on, especially in Silicon Valley.
“In this market, it’s harder than it used to be to convince someone to quit if things weren’t working out – normally, you could help them find something that’s a win. Now, they don’t want to lose their mortgage, so hiring the wrong guy is even more painful.”
Just ran across a supporting study: “In a related paper, Saint-Paul (1995), following an argument in Blanchard and Summers (1998), introduces a model in which a decline in quits makes firms more reluctant to hire in the first place when there are costs to firing workers.” The cost of firing a worker is psychological and economic, but a mismatched employee would look for new employment on their own in a better economy.
By the time you’ve been out of work for six months, you might as well be dead for all the interest you’ll generate from prospective employers. By the time it hits a year you basically ARE dead, career-wise, unless you get very lucky and happen to know someone. That’s just the reality.
Also, if you used to make a certain amount, companies aren’t willing to hire you for LESS than that, because they assume that you’ll be a malcontent and/or be constantly looking for another job. And they aren’t willing to hire you for the old amount either, because employees are disposable now, and no one wants to pay full value for a disposable piece of equipment.
If you try to down-grade substantially, the employers will assume that you have something very wrong with you.
Basically, in this wonderful B+ economy that 65,000,000 or so of my “fellow” “Americans” voted for, once you lose your job you are completely fucked in the ass, unless you get very, very lucky.
PS Switching careers entirely doesn’t help either. That’s just a scam for the financiers and the government dependent education industry to suck more wealth out of the country.
Also? Still five million full-time jobs short of where we were six years ago. Which indicates that the underlying economy just plain sucks.
Wages arent increasing. If a shortage of skilled workers was the issue you would expect to see them rise.
Steve
I don’t know the technical term, but I suppose another explanation is that employers are shopping for value. They are ready to hire, but are only interested in people who are “sure things” in terms of productivity. Thus they demand a lot from candidates and, in the current environment, they are able to demand a lot.
There’s another possibility: employers have secret or merely unannounced qualifications that don’t appear in the job specifications. I have responded to countless ads for rocket scientist or programmer, gone through phone interviews, etc., only eventually to be informed that I would have to submit to a drug screening (nowadays, perhaps, a Facebook-account screening!) which I refuse to do, for reasons of privacy.
Once I even showed up for the first day of work on a contract at Siemens of Austin, only to be told that I would have to pass a drug screening. So I just walked out. Big waste of my time, the recruiter’s time, and Siemens’s time.
Obviously, I can’t put in my resume that I won’t put up with drug screening, because then the assumption would be that I used drugs, which I don’t.
Now I tell all recruiters that call that I won’t work for any company that does any kind of drug screening. Often the recruiter says he’ll call the client to check the drug-screening policy. They almost always call back to say, “Sorry.”
The irony is that, while the Feds require all military contractors to have a drug-screening policy in place, Federal jobs themselves generally require no drug screening, the Fed employees being protected by union rules.
Another irony is that, after the gummint spent tons of money to send me to school for 27 years to master physics, math, law and foreign languages, I likely will be forced to apply my design services in rocketry, avionics and nuclear weapons in a foreign country! Amerika is nothing if not stupid.