Wharton@Work

July 2012 | Reading List

Debunking the “Skills Gap”: Why Good People Can’t Get Jobs

Peter Cappelli, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It, Wharton Digital Press, June 2012.

Unemployment is up over eight percent, a figure that represents 12.7 million Americans. And yet companies contend they can’t find the employees they need. Their reasoning? Applicants aren’t qualified, schools aren’t preparing students for jobs, and the government isn’t letting in enough high-skill immigrants. Put simply, they — and the media — blame a “skills gap” for their unfilled positions.

In his latest e-book, Wharton management professor and director of Wharton’s Center for Human Resources Peter Cappelli challenges the conventional wisdom that blames the skills gap and other myths for the standoff between employers with positions to fill and those seeking work. He digs deep into the real reasons behind the unemployment numbers, and why employers’ long-held beliefs are getting in the way of turning them around.

The pervasive myth on the demand side of the equation is that hiring is difficult because workers don’t have adequate skills. Cappelli, who serves as faculty director for Wharton’s Advanced Management Program notes, “The punditry are quick to paint an ugly picture of the people lining up for jobs. They are described as poorly educated and lacking the skills relevant for employment.” But when employers are asked to list workforce deficiencies, they place “character issues” such as punctuality and motivation well above technical or academic abilities. And the jobs they’re having the most trouble filling include laborer, sales rep, and office support — a mix Cappelli says “does not suggest any pattern with respect to skill requirements that would explain the skill shortage complaints.”

On the supply side, the book debunks the myths that public schools are failing their students (“statistical evidence suggests that U.S. students’ performance has actually improved over the past several decades”) and that not enough Americans are graduating from college (the real problem is a low completion rate, says Cappelli, but adds,“whether the economy really needs more college graduates is a different and more difficult question”).

Specifically, though, Cappelli doesn’t blame either the supply or the demand side for the reasons good people aren’t getting hired. Instead, he turns to the hiring process itself. Automation, while saving companies money and making the process easier for workers and employers, has resulted in a number of unintended downsides, including massive numbers of applicants and the need for employers to create overly-specific job descriptions. One job seeker tells Cappelli, “I was just denied a placement with a company because although I had what it takes according to the human resource [manager] who handled my file, I didn’t have the exact same title on my résumé. This specific title is something only that company uses. They are [still] looking to fill this position.”

But Why Good People Can’t Get Jobs doesn’t end with a critique. Instead, Cappelli offers reasonable solutions that can work for both employer and employees. Rejecting the standard skills gap argument and exploring many myths surrounding the disconnect between job supply and job demand, he makes a strong case for changing the way talent is developed, recruited, and retained. And with no end to high unemployment numbers in sight, the need for solutions isn’t just timely — it’s urgent.

Buy the Book