Who is responsible for closing the 'skills gap'?

Training, development, on-the-job training needed, says one industry leader

Higher education leaders are beginning to question whether or not there really is a "skills gap" between what students learn in college and what businesses say new employees need to know, reports U.S. News & World Report.

During the Great Recession, companies held hiring rates flat. But since then, they have dramatically increased them, according to the annual Compensation Best Practices report from PayScale. However, businesses maintain that it is difficult to fill certain positions.

About 50% of respondents say their company cannot fill open positions for lack of qualified workers, likely due to increased role of technology that necessitate specialized skills. And in a separate survey of 1,285 recruiting agency professionals, 75% of respondents cited a "skills shortage."

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"Is there actually a [skills] gap, or do companies just have to open up their wallets" to attract better candidates, says Tim Low, VP of marketing at PayScale.

Much of the national narrative links the skills shortage to schools' poor preparation of students. A study by the Washington Center for Equitable Growth found that a 2% score increase by Americans on the 2012 Programme for International Student Assessment exam would have resulted in an additional $2.5 trillion in the domestic economy by 2050, the idea being that better scores mean stronger human capital and a more productive workforce.

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But recently, educators have started pushing back on that notion.

"This isn't a new claim. Employer groups have made this argument back to the 1940s," says Peter Cappelli, a professor at the University of Pennsylvania's Wharton School. "We assume they're looking to hire graduates out of college, but they're not. Almost none of the jobs in the U.S. are being filled by new hires... They want to hire people with 10 years of experience."

Pushing career-development in graduate programs may create a "substantial financial risk" for students, he says, since the upfront cost for specialized training may not result in jobs after graduation.

College is a riskier investment for some students

Instead, employers should help close the skills gap by lowering expectations for new hires, raising wages, and creating employee developmental programs, he argues.

"There has to be training and development and mentoring and on-the-job learning to get these skills. To think that somebody's going to just produce ready-to-go employees in this space, I don't think is feasible," says Jeff Owens, president of workplace productivity company Advanced Technology Services.

The solution, he says, lies in a combination of education, recruiting, and position-specific training (Soergel, U.S. News & World Report, 2/19).

The takeaway: Businesses are blaming the skills gap on higher education instructions, but some industry leaders argue companies need to lower new hire expectations.

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