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The Jobs Paradox

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December Cover

Unemployment rates remain high, but companies are having trouble finding candidates to fill high-skilled jobs.

Fifty-nine percent of U.S. companies are finding it difficult to attract critical-skills employees, an October Towers Watson survey of 218 companies found. This is an increase from 52 percent in 2010 and 28 percent in 2009.

Research from the Society for Human Resource Management (SHRM) also shows that skills issues loom large. The number of employers reporting that it is increasingly difficult to recruit candidates to fill key positions has been on the rise for nearly two years, according to data from SHRM's Leading Indicators of National Employment. The latest SHRM Jobs Outlook Survey Report, released in October, found that respondents for 60 percent of organizations say jobs in the category of "skilled professionals" are the hardest to fill.

In most industries, the jobs being added require a mix of new skills or entirely new skill sets compared to those lost at the beginning of the recession, according to a November SHRM poll of 2,286 HR professionals on the ongoing impact of the recession. Highly skilled positions such as engineers, technicians, medical personnel and scientists are the hardest to fill.

Retention remains another challenge. According to the Towers Watson survey, once recruiters do manage to fill their critical-skills positions, 36 percent report difficulty retaining those employees.

Supply and demand may help explain why it is getting harder to find and retain employees with critical skills. On the demand side, companies reduced staff and automated jobs in response to the recession. That put pressure on workers in the remaining jobs to increase productivity, and rising productivity is associated with the need for higher skills. Technological developments and increased specialization within highly technical fields also has increased the demand for more-specific skills. As a result, job candidates with exactly the right mix of skills and experience have become more difficult to find.

Meanwhile, the supply of potential candidates appears to be changing. Many individuals with master's degrees or Ph.D.s in the sciences in the United States are over age 40. As more Baby Boomers retire, the demand for technical specialists and new entrants to the science, technology, engineering and math fields could intensify in the United States.

Recruiting behaviors may also be changing. Social media such as LinkedIn may make it easier for staffing specialists to look for passive job seekers who have the desired blend of highly specific, hard-to-find skills and experience. Yet, more often than not, these individuals are already employed. Efforts to draw highly in-demand potential candidates away from current employers may end up consuming more time and resources than finding "almost perfect" candidates and investing in their development and skills once they are on the job.

Whatever the causes, and however counterintuitive it may seem as the unemployment rate continues to hover around 9 percent, there is growing documentation that critical-skills shortages are increasing, and that is a trend to watch.

The author is manager of the Workplace Trends and Forecasting program at SHRM.

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