As pointed out in the main story, organizations these days are facing economic crossroads because of a growing labor and skills shortage. Following are five myths to be aware of as you plan for your company’s future workforce needs.
- It’s a buyers’ job market.
Not any more. These days, skilled workers can pick and choose whom they work for. They also can negotiate perks and benefits once reserved for the corporate elite. And the shortage is driving up wages. Consider: In Denver, the demand for skilled telecommunications technicians is so strong that the starting pay for a phone equipment salesperson has doubled to $40,000 a year since 1992. Communications analysts in the same region receive calls from headhunters on a regular basis. That was unheard of only a few years ago. Today, many companies are piling on the perks and benefits, including liberal tuition reimbursement and stock options. - Skills shortages center mostly on computers and technology.
There’s no question that the lack of computer-related skills accounts for some of the problem in today’s labor market. However, the lack of skilled labor permeates many fields. Currently, there’s a shortfall of 300,000 to 400,000 truck drivers nationwide. Within the shipbuilding docks along the gulf, companies are short thousands of marine-grade welders and electricians. All of which are causing backlogs in deliveries and forcing companies to turn away work. Says Joel Kotkin, a senior fellow at the Los Angeles-based Pepperdine University Institute for Public Policy: “Over the last quarter century, there has been a decline in the blue-collar professions. Now, we’re paying the price. There aren’t enough skilled trade workers available.” - The lack of skilled labor won’t hurt my company.
According to the National Manufacturers Association, 48 percent of companies believe their current workforce lacks the ability to read and translate drawings, diagrams and flowcharts. Although companies have pumped up budgets for training, it’s questionable whether workers will be able to keep up. For instance, Kotkin notes that the lack of truck drivers and dockworkers has slowed the delivery of cargo in some parts of the country from three or four days to 15 or 20. “At some point, it becomes a ripple effect and everyone is impacted,” he says. - Foreign-born workers take jobs away from Americans, and they accept jobs for less than the prevailing wage.
In reality, foreign workers account for a small portion of the workforce. The Cato Institute, a think tank in Washington, D.C., sponsored by Jack Kemp’s Empower America, found that the total number of foreign workers receiving visas in 1995 was 99,000, or 0.079 percent of the workforce. Although only one-third of the engineers and scientists in the high-tech arena comes from other countries, firms can’t fill the positions with Americans. And for a very simple reason: the number of Americans trained in engineering and computer science has dropped from a high of 50,000 in 1986 to 36,000 in 1994, Kotkin notes. What’s more, in a review of 230,000 visas granted by the U.S. Department of Labor, the institute found only 418 cases in which a worker was paid less than the prevailing wage. - Ongoing layoffs and a robust economy indicate this is only a temporary situation.
While economic projections have a way of haunting those who make them, most experts say the labor shortage is here to stay. During the 1980s, workforce growth stood at 2.5 percent annually. Today, that figure has dropped to about 1.2 percent, and many expect the figure to slide to below 1 percent in the next century. Fewer bodies combined with jobs that require increasingly sophisticated skills could wreak havoc on the economy. And while some companies continue to lay off workers in droves, it’s mostly high-wage and low-skill positions that have been made obsolete by technology. “It’s a skills mismatch,” says Carol D’Amico, senior research fellow at the Hudson Institute in Indianapolis.
Workforce, March 1998, Vol. 77, No. 3, p. 48.