Employers Need to Step Up to Close the "Skills Gap"

Findings from a new Cornerstone OnDemand survey show that employers too often drop the ball when it comes to recognizing real source of perceived skills shortages.

Many of us have recently endured a bruising U.S. presidential electoral cycle centered squarely on economic and labor market issues and chock full of speechmaking focused on the need to create new jobs at any cost. We also hear a message of doom and gloom from loads of CEOs who echo a lingering message that they simply can't find enough skilled workers.

We do need jobs, of course – too many people are struggling with unemployment. And we need skilled people at every strata of the labor market. But a recent Cornerstone OnDemand survey shows that a single-minded focus on new job creation deflects attention from another critical area for improvement – focusing on the skills and engagement of existing internal employees. Further, the survey highlights that employers can no longer deny that they are partially to blame for the skills shortage.

A Skills Shortage?

The idea that there is a so-called "skills gap" is a contested one. CEOs often use it to explain the challenges they face in meeting their objectives and growing their businesses. It’s a pervasive belief one that seems to be growing – only 42% of employers believe new graduates in the workforce are adequately prepared by their colleges or other pre-employment training programs, according to a recent McKinsey study.

However, data from the recent Cornerstone survey, along with the loud voices of people like Peter Cappelli and Paul Krugman, bring the idea of a skills shortage into question. Cappelli argues that the perception of a shortage of skilled workers in the U.S. is mere illusion. It’s not the fault of the national education system, but instead of employers and their hiring practices and failure to invest properly in employee skills and alignment.

With Bosses Like These, Who Needs Enemies?

The bottom line is that employers are not making the right investments in building skills and nurturing employee performance.

Modern business seems to rely on a "plug-and-play" type of labor market, dependent on the immediate availability of deep pools of skilled labor. This stands in stark contrast to how employment functioned a few decades ago, where fresh faces could join a new company and feel content in the knowledge that they would be trained to be successful in their new jobs.

Cappelli has documented a decline in employer commitment to training, workforce development and apprenticeship programs over the past two decades, a finding that is reflected strongly in the most recent Cornerstone survey:

Narrow the Gap at Home

External job creation is undoubtedly critical for the healthy function of the economy as a whole. In the meantime, employers should beware of blaming performance shortcomings on a perceived (and often wage-based) skills shortage, when, in fact, they are doing precious little to develop and engage their current internal employees.

The goal should be to invest in narrowing the skills gap at home – to meet looming business challenges by better mobilizing the existing talent base. Not every one of our challenges will be met through net new hiring.

For more insight and detailed findings from the latest Cornerstone OnDemand survey, go to http://www.cornerstoneondemand.com/resources/research/survey-2013.