Saturday, December 7, 2013
For two years, Gov. Paul LePage has met with Maine business leaders to discuss the skills gap: the theory that employers have plenty of jobs, but not enough qualified people to fill them. New Democratic leaders in the Legislature recently vowed to tackle the issue, creating a bipartisan committee to meet with "business leaders, work force experts and economists."
But Peter Cappelli has some advice for the governor and legislators: Talk to some of the 51,000 Mainers who don't currently have a job.
"I guarantee that politicians will hear a much different story about the so-called skills gap from the unemployed than they're hearing from companies," Cappelli said.
Cappelli, a professor of management at the Wharton School at the University of Pennsylvania, may be the nation's leading skills gap skeptic. As the rumbling about the country's unskilled work force has risen to a national din, Cappelli has become the country's contrarian voice, appearing on "60 Minutes," penning op-eds for The Wall Street Journal and The New York Times and writing the book "Why Good People Can't Find Jobs."
The former co-director for the U.S. Department of Education's National Center on Education Quality of the Workforce believes that the skills gap is "an illusion," a "myth."
He says that if companies are having trouble filling jobs, it's because they're demanding more than ever from job applicants: highly specific educational training, previous experience and a willingness to work for wages that are not commensurate with the purported demand for job applicants.
Cappelli says companies also are demanding changes in the education system to make up for their own lack of investment in work-force training and employee development.
The result, he concludes, are logjams at cash-strapped community colleges, the institutions that have shouldered the vocational training burden.
Meanwhile, Cappelli said, capable people remain out of work, while companies remain understaffed.
Cappelli's points are not well-received in the business community.
In Maine, efforts by LePage, and more recently Democratic lawmakers, have been almost universally applauded by state business leaders. Newspaper coverage of the Democratic leadership's plans to tackle the skills gap prompted a flurry of opinion pieces and letters from business leaders, championing the need to better prepare Maine's work force to help grow the state economy.
Godfrey Wood, president of the Greater Portland Regional Chamber, cited a recent report for Southern Maine Community College that by 2018, 90 percent of new jobs in Maine will require some type of formal education beyond high school. The same report predicted that 4,000 high-wage jobs will go unfilled over the next 10 years due to the lack of skills.
"Part of the solution should include innovative education that brings 'career relevance' into high school and college classrooms," Wood wrote in a Dec. 14 Another View editorial in the Portland Press Herald.
In Maine, and nationally, the skills gap complaint among the business community has been seized as a political opportunity by policymakers.
But as Augusta lawmakers evaluate Maine's work force needs and contemplate reforms that may require re-prioritizing funding, Cappelli remains skeptical.
"Nobody wants to whack businesses on the nose and tell them what they're doing wrong," he said. "Everybody wants to look like they're helping business."
Some Maine business officials concede that they could be more creative in finding the workers they need. However, they dispute Cappelli's arguments that the skills gap is driven by a wage gap and that companies have thrust work-force training onto the public education system.
"I don't think it's fair that Mr. Cappelli is laying all the blame at the feet of businesses," said Patrick Shrader, vice president of marketing at Arundel Machine Tool, a precision manufacturing company that employs about 75 people in York County.
Shrader says the company is looking to hire 10 more people, but is having trouble filling the jobs.
He agrees with Cappelli that companies should invest in work-force training. That's why Arundel Machine Tool has an internal mentoring program, he said.
Additionally, Shrader said, his company has used a multipronged recruitment effort. It works with the community college system to hire skilled workers, it trains and hires applicants straight out of high school and it promotes from within.
"We have more work-force training now than we ever have," Shrader said of the company, which was established in 1985.
He said his biggest challenge is finding applicants with "soft skills," people who show up on time, want to learn and are eager to work. Shrader says such abilities are likely taught at home, not school.
That echoes Cappelli's research, which cites a 2011 DeVry Career Advisory Board survey listing the top 15 employee attributes that business managers identified as key to their success. Only one, communications skills, is an academic subject.
"We have to go all the way to No. 8 on the list to find something that could be taught explicitly in schools (oral communication) and 14th on the list to find a traditional academic subject (reading)," Cappelli wrote.
Similarly, a 2009 Business Roundtable survey found that managers' biggest complaints about employees were work attitudes and self-management skills.
Manufacturers have become leading skills gap advocates.
A recent report from the Manufacturing Institute showed that more than 600,000 manufacturing jobs nationwide were unfilled because employers couldn't find workers.
In December, the National Tooling and Machining Association conducted a survey with 164 metalworking businesses, most family-owned and with an average of 65 employees.
The survey found that 67 percent of the businesses had current job openings and 20 percent of those same businesses had at least six vacancies. More than 90 percent said they were experiencing "severe or moderate" recruiting challenges.
Wage levels and wage stagnation are key points of friction on the skills gap issue.
According to U.S. Bureau of Labor statistics, manufacturing machinists made a median wage of $43,800 in Maine in 2011. That's slightly higher than the national median of $40,520. Wages in the profession have increased -- but only slightly higher than the cost of living.
Cappelli argues that stagnant wages undercut the skills gap theory. He says that a real skills shortage means that employers can't find candidates at the market wages.
But Shrader and Paul Nathanson, spokesman for the National Tooling and Machining Association, counter that raising wages belies the reality that American companies are competing globally.
"Middle market manufacturers cannot simply charge more for their products, because their customers won't pay it," Nathanson said. "They can source the same product from overseas, where labor markets are much cheaper."
The Southern Maine Community College skills gap study singled out other occupations where wage stagnation may be an issue. The study cited Bureau of Labor Statistics data that showed flat to moderate wage growth in hospitality and construction trades. In both categories, wages fail to keep pace with annual cost of living increases.
The skills gap issue has nuances that vary among industries and employers.
At Idexx Laboratories in Westbrook, which makes diagnostic tests and instruments for livestock and poultry, the demand for skilled, experienced workers has never been higher.
Ann Marie Martin, the new head of Idexx recruitment, said the challenge in Maine lies in filling technology positions, software engineers and developers. She estimated that the company has 15 job openings just in those fields, some of which have been vacant for more than a year.
Martin said Idexx doesn't hire many people straight out of college. It's looking for highly skilled, experienced workers and tends to recruit "passive candidates," people working elsewhere and not necessarily hunting for another job.
The company's philosophy is to cross-train employees and give them opportunities to develop new skills, she said.
"It's not always about the dollars that you spend, it's how you encourage people to work cross-functionally and identifying projects for people to work on that stretch them a little bit," she said.
Martin says it's the company's responsibility to ensure that it's developing its employees.
"We want to build bench strength," she said.
But Martin said the company is also eager to work with lawmakers to bridge the skills gap.
The leading opportunity for that may come from the bipartisan commission recently formed by Democrats, who now control the Legislature. They plan to use the information they glean from business leaders, economists and other experts to develop a report with comprehensive recommendations. The findings will likely provide the foundation for a skills gap bill to be submitted for debate in the upcoming legislative session.
Staff Writer Steve Mistler can be contacted at 791-6345 or at: