Wharton’s Peter Cappelli knows why you can’t get a job

Peter Cappelli is a management professor at the Wharton School.
Peter Cappelli is a management professor at the Wharton School.
Posted: June 02, 2012

Three years after the recession’s "official" end in June 2009, about 12 million people remain unemployed, with more than three jobless people for every opening, the U.S. Labor Department reports.

So why do employers constantly whine about their inability to find the talent they need from an applicant pool that they say lacks skills, rudimentary educational abilities, and even a willingness to work?

Sitting in his office at the University of Pennsylvania, Wharton management professor Peter Cappelli asked himself the same question. Cappelli isn’t buying all the moaning, widely reported in business media.

"There were enough of these [stories] that it got into urban-legend status," Cappelli said Tuesday in an interview on Penn’s campus.

Like many others who monitor the employment situation through U.S. Labor Department reports such as the one being released Friday, Cappelli began picking apart the elements of the stories. The result is an e-book, Why Good People Can’t Get Jobs, also being released Friday by Wharton Digital Press.

The problem, he learned, was not a lack of educated and talented workers, but a hiring system that has gone terribly wrong.

"It think it’s been exacerbated by the recession," Cappelli said. "Employers feel that they shouldn’t have to pay as much. I think we’ve gotten used to the idea that wages don’t go up."

So what are the issues? Here’s what Cappelli found:

The problem starts with hiring managers who create wildly inflated descriptions of the talents and skills needed for openings. "They ask for the moon," he said.

The human resources staff that might ordinarily push back against these unrealistic requirements has been downsized and overworked into submission.

Computer technology makes it easier for job-seekers to apply, but also eliminates many qualified people for consideration when their resumés don’t match complex and mysterious algorithms. Cappelli provides an example of a job-seeker eliminated for an on-point opening because his former title didn’t exactly match the job title for the opening in the company. The wrinkle was that the job title was unique to the company. The only people who could have qualified for that post were people who had already held the job and left it.

Companies are unwilling to pay. "What they really want is someone young, cheap, and experienced," Cappelli said. Online job applications ask job-seekers to name a salary expectation, a dangerous gamble. A small percentage outside the range means the candidate is eliminated, without a chance to negotiate or compromise, while the company potentially loses out on a good employee.

Meanwhile, employers leave jobs vacant for months. They see it as a saving because wages are easily quantifiable. More difficult to measure is the cost of leaving a position vacant. Is there a sticker price on lost opportunities or staff burnout? "It involves lots of costs that the company’s internal accounting system doesn’t recognize," he said.

What bothered Cappelli while he conducted his research was that nearly every element of the complaining turned out to be wrong. Yes, U.S. schools are dropping on international rankings, but that’s mainly a function of improved education elsewhere. In other measures, students are outperforming previous generations.

Cappelli said he worries that the complaints about a labor shortage caused by an unwilling, unskilled workforce will be repeated enough that they will take on the mantle of truth, with implications for public policy.

"It’s a loud story … that could become pernicious if it persists," he said.

"It does have a blame-the-victim feeling to it," he said. "It makes people feel better. You don’t have to feel so bad about people suffering if you think they are choosing it somehow."

So what should employers do?

They should work closely with schools and colleges so that educational institutions stay up-to-date with the skills needed in the workplace.

Most of all, they should try to assess the true costs of various policies. Is leaving a job vacant saving money? Would paying a little more to get the right employee pay off in increased productivity?

What costs less — training a proven, valued employee to take on new responsibilities or searching for someone new in the job market? "I think companies vastly underestimate how difficult it is to bring in new talent," Cappelli said.

Companies should act in their own best interest, he said. "The puzzling thing is that they don’t know what is in their best interests because their data is so poor."

Contact Jane M. Von Bergen at 215-854-2769, jvonbergen@phillynews.com, or follow @JaneVonBergen on Twitter. Read her "Jobbing" blog at www.philly.com/jobbing.

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