Sunday, July 22, 2012

Skills Gap Smoke Screen: Socialize worker training costs

I recently read several news articles that blamed unemployment on workers not having the right skill sets. This just another cop out excuse for large and medium size firms to not hire. They also fail to mention the skill shortages exists only at the (low)price they want to pay. If they paid more, there is no skills gap.

Companies successfully got rid of their human resource, training and development departments during the business process re-engineering craze of the 1990's. The departments were viewed as non-value added (no direct bottom line contribution) so they were reduced, automated and outsourced.

In the tight labor market, companies have basically socialized employee training and development costs. They have gotten the workers, the government, and society to pay for something they used to provide.

Peter Cappelli at the Wharton HR Center has discussed this problem in more detail. His book is called "Why good people can't get good jobs".

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