Recent news headlines report that stocks are crashing. The markets are focused on further interest rate increases as the Federal Reserve responds to inflation. But to what extent is inflation triggered by surging jobs hiring and a falling unemployment rate?
Overall businesses are still experiencing great difficulty in hiring skilled workers. Massive retirements and COVID-19 are identified as the main culprits. However, reports from research groups and trade/professional associations are identifying skilled worker deficits as the chief cause of workforce shortages and wage inflation. As Harvard economist Gabriel Chodorow-Reich stated, “companies will keep bidding up pay as they compete for employees.”
The McKinsey Global Institute report, “Rekindling US Productivity for a New Era,” (2/23) centers on the urgent need for worker training and education to fill the rising tide of vacant jobs across America. McKinsey’s research lends future credence to similar statements by the American Hospital Association, the Association of General Contractors, the National Federation of Independent Business, and many other organizations.
The skills-jobs disconnect has only grown since the 1990s. Companies generally fail to recognize that investing in their employees’ continuing knowledge growth is a core business function. In fact, as they continue to focus on cost-cutting, they are further losing ground as automation requires better-skilled people. Data shows that this skills-jobs disconnect will persist at least until the 2030s.
Is this the new normal? The longer businesses only circle these issues at 30,000 feet, the bigger the risk of the economy running out of the required skilled workers to keep it expanding.
What has to happen before this requirement is acknowledged by our business culture? We hope soon rather than after a major economic crisis.
About the Author:
Edward E. Gordon is the founder and president of Imperial Consulting Corporation in Chicago. His firm’s clients have included companies of all sizes from small businesses to Fortune 500 corporations, U.S. government agencies, state governments, and professional/trade associations. He taught in higher education for 20 years and is the author of numerous books and articles. More information on his background can be found at www.imperialcorp.com. As a professional speaker, he is available to provide customized presentations on contemporary workforce issues.
