The U.S. Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS) published recently suggests that a “skills mismatch” rather than a decrease in labor demand could be the cause of a recent slump in job growth. A skills mismatch refers to a gap between the particular set of skills employers want and the skills applicants actually have (read more on this in our blog, “Tackling the Skilled Labor Shortage as a Manufacturing CEO”). So, how are businesses coping with this setback? Read on.

More about JOLTS

The Job Openings and Labor Turnover Survey (JOLTS) is conducted by the Bureau of Labor Statistics of the U.S. Department of Labor every month. Each report collects and processes data on job openings and labor turnover. Sampled establishments volunteer to have this data collected. The data includes employment, job openings, hires, quits, layoffs and discharges.

Let’s take a look at the numbers

• Job openings, a measure of labor demand, increased to a seasonally adjusted 6.0 million in April. This is the highest it’s been since the government started tracking the series in 2000.
• Hiring decreased to 5.1 million (a 253,000 decrease from the March report).
• 1.6 people were laid off in April. Those voluntarily quitting their jobs fell by 111,000 to 3 million in April.
• 138,000 jobs were created in May, down from the average monthly number of 181,000.
• Unemployment rate has decreased to 4.3%, a 16 year low.

The skills mismatch

The gap between open jobs and hiring highlights this growing skills mismatch, and studies show that small business owners have reported the largest number of unfilled job positions since November 2000.

The economy has reached what’s referred to as “full employment,” at which point the focus shifts from worries about the labor demand to worries about the supply of jobs. Experts expect the supply demand disproportion to get worse as the baby boomer generation retires.

How are businesses coping?

1. Training existing employees to fill gaps. Businesses are investing in training now (both for existing employees and new ones), because if the skill needed by the employer is highly-specialized, there might not be another feasible way to get a worker who has the skill.
2. Looking at employees with transferable skills and “business acumen” (often called business savvy or business sense, this is the keenness in understanding and dealing with a business situation in the most effective way possible).
3. Using “contingent” workers - i.e. freelancers, consultants, contractors and more to fill positions.
4. Tapping into employees’ networks - Existing employees are often the best source for new hires—friends, former colleagues—they have ‘real life’ experience working with these people.

Though the skills gap and skills mismatch continue to be main issues in the hiring and recruiting world, there are steps businesses can take to, at the least, alleviate this setback. Reach out to KLR Executive Search Group, LLC for more information.