In yet another sign that we are living in unprecedented times of change in the knowledge worker labor market, a recent survey reveals that underemployment remains high, with nearly half of U.S. employers struggling to fill jobs even though unemployment continues to hover near historic lows, (currently it is around 5%).
According to a recent survey of 42,300 employers around the world conducted by The Manpower Group, 46% of U.S. employers are having difficulty filling jobs, surpassing global averages. This is the highest percentage since 2012.
There are a number of drivers behind the current talent scarcity dynamic, many of which impact both workers and employers:
- First and foremost is education. Unemployment levels for college graduates is 5.6%, and jumps to 17.9% for high school graduates. Furthermore, underemployment in 2016 is a whopping 33.7%, compared with only 26.8% in 2007, according to a study by the Economic Policy Institute. And though 87% of college graduates feel prepared to enter the workforce, a recent study found that only half of hiring managers agree with this sentiment.
- Another factor is the very nature of work itself. Driven by technology, shorter product cycles, shifting consumer demand, and new ways of working the world of work is changing rapidly. Work is becoming much more project-based, which lends itself to point-specific resources engaged on a flexible basis.
- In addition, there is a substantial shift in preferences and views towards work. In prior generations it was common for workers to be loyal to an employer for their career, and vice versa. With all the economic turmoil of the past decade, that social contract has been broken. A growing segment of the workforce is now independent by choice and is widely expected to encompass 40%, or more, of the total U.S. workforce by 2020.
The jobs employers need done are evolving, and they need people with different skills to do them, and they need them done in different ways than in the past. This overall shift in the needs of buyers of talent has created an imbalance in the supply versus demand for workers with the desired skills. While there may be available workers, they don’t have the right skills or experience. It is increasingly an issue of quality versus quantity.
As more work shifts towards being technology and specialized skills-based, this issue will only become more acute. Increasingly companies are defining new roles for which there is limited supply.
While company sponsored training can help alleviate some of the pain, it is not a quick solution. Many companies are finding more relief by restructuring work to be more project-based (versus role-based) and then seeking out subject-matter independent workers to engage. Truly strategic organizations have embraced the flexibility that this labor model delivers and are actively striving to become known as “clients of choice” for the independent workforce.
The organizations that will win the war for talent in this new world of work will be those who innovate and dare to re-think the old paradigms. Fortunately for them, innovative companies like TalentWave are there to help them engage the new workforce in a safe, easy, and cost-effective manner.