MICHEL MARTIN, HOST:
This is TELL ME MORE from NPR News. I'm Michel Martin. We are going to spend a lot of time talking about jobs today - who is getting them, who is not, and why not? Later in the program, we will talk about new research that shows that more men are going into fields that have been dominated by women for years. We take a look at the trend, what's behind it, and how it might even change the workplace. That's just ahead.
But first, we want to turn our attention to the broader issue of employment - or, really, unemployment. Earlier this month the Labor Department announced that the nation's unemployment rate crept back up to 8.2 percent. That means that some three years after the recession officially ended, millions of people are without work.
Many of them are frustrated and in some cases desperate and of course many people are asking why, why me? Is it skills, presentation, just too many people looking for too few jobs? But now, one analyst has looked at the data and says it's not the workers; it's the employers who are to blame for creating unrealistic demands and using computer technology that actually screens out qualified applicants.
Peter Cappelli is the George W. Taylor professor of management at the Wharton School. Of course, that's at the University of Pennsylvania. He's also the director of Wharton Center for Human Resources and he's the author of "Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It." And he's with us now. Welcome. Thanks so much for joining us.
PETER CAPPELLI: Thank you.
MARTIN: What got you to look at the problem in this way? And I do want to note that this book started as a major piece for the Wall Street Journal where you address the question of companies that are complaining that they can't find the workers that they need, even though we have such high unemployment. So what made you look at the problem in this way?
CAPPELLI: Well, I guess I was seeing these stories in the business press about companies that said nobody could do the jobs; they couldn't find anybody to fill them. And, you know, it just doesn't sound right. And so I started to think about it and look into some of these cases a little more. And, you know, that's the puzzle.
That's also the puzzle behind the book, is that in survey data a majority of U.S. employers over the last couple years have said they have a hard time filling their vacancies. There obviously aren't enough jobs to go around. It's not surprising that employers are picky, but if they're saying they can't find people to hire, there's some serious mismatch going on.
MARTIN: And you identify a couple of key factors. I want you to sort of take them apart but I'll start with a - I'll just bring you a quote from a woman named Candace Faulkner. She's a 50 year old woman who's been unemployed for almost two years. She says her unemployment has nothing to do with a lack of trying. She says she sends out 25 to 30 job applications every week. I'll just play a cut of tape from a conversation that we had with her earlier. Here it is.
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CANDACE FAULKNER: Everything that you apply for is handled through electronic applications. If your application doesn't get pulled then you don't get employed or you don't even get an interview. I happen to have a master's degree in psychology. I just got accepted into the doctoral program. I'm technologically savvy. I am willing to work in any area that I can, long as I can get my foot in the door.
MARTIN: Is that true? Is that a common story? That it's actually the technology is actually screening out people who are qualified?
CAPPELLI: Well, I think it certainly seems to be some evidence for that and the evidence, you know, begins with the fact that half the employers say it's hard to find people to hire. It's also worth pointing out that, you know, employers obviously have a hard job these days trying to make money, finding good people who will, you know, be good fits and won't quit and will work hard is always a challenge.
But it's also worth remembering that they control all the cards. They decide how to describe a job in advertisements, they decide how to reach out to the community, they decide what the wages are going to be, they decide what criteria they use to pick people and they of course ultimately make the hiring decision.
So if something's not working the place to begin is to look internally.
MARTIN: One of the arguments that you make in your piece and also in the book is that there are a couple things going on. One is that companies are so overwhelmed by applications that they've turned to this computer technology, but also that their human resource departments have often been depleted. So there's no human factor to push back against unrealistic demands. Could you talk a little bit more about that?
CAPPELLI: Yeah. So let's talk about how the process works in a typical company, especially a bigger company. The hiring manager who has a vacancy in the area gets to, you know, gets a requisition approved, says we can hire, and then they go about describing how the candidate should look. What are we looking for in this job?
Sometimes it's done by committees and sometimes it's just an individual, and if you're asking for somebody who could work for you just as I would, you'd probably have a list of ideal things you want that would be pretty long. Now, in the old days there was somebody in human resources, in the recruiting side, who would look at this list first and say, you know, do you really need a Ph.D. to do this job?
Is it really necessary to have done exactly the same thing before? And they would push back a bit. Then after that, because there are so many applications it's impossible for human eyes to scan each one. So then, these requirements get built into software and the software is looking, if it's processing resumes, for key words.
If you're filling out the application, you know, they're scanning what you say about it. And the way the software works it's yes, no, yes, no. Did you clear the hurdle or not in a typical process? And so, then they build in a series of these questions and all they can really examine is education and prior work experience.
One addition to that, they typically also ask you at the beginning a bedeviling question and that is what wage are you looking for? And I guess if you guess too high, your application is kicked out. So, you know, you're trying to guess, gee, what wage could I live with but also how low could I go and still get the job?
So there's a bit of a competition built in right at the beginning. So if you don't happen to be able to describe your experience or your credentials in ways that fit what the software is looking for, you know, you're kicked out. Your application is kicked out.
So somebody told me a story in their company about having a job, an engineering position, a pretty standard engineering job, and 25,000 applicants for it and after they got through this process nobody was qualified.
MARTIN: Hmm. I'm speaking with Peter Cappelli. He is the George W. Taylor professor of management at the Wharton School. That's at the University of Pennsylvania. His most recent book is "Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It." But if a company knows that they have a vacancy, presumably they need somebody to do the work, why wouldn't they want to fill the job?
CAPPELLI: Yeah.
MARTIN: I mean, it seems like that would pose a burden on everybody else when that work is not being done.
CAPPELLI: Yeah. It's a great question and I think that's the heart of the issue. A lot of things that seem obvious are hard to do in practice and in a lot of companies, particularly in their human resource area now, they have gutted out a lot of the people.
So they're just not there through downsizing waves and efforts to become more efficient. And the question you're really asking, I think, is a variation of are they penny wise and pound foolish? And that means have they cut so much that they are now kind of making mistakes? You know, in a typical company they really don't know how much it's costing them to keep a vacancy open but what they do know is their cost per applicant and their cost per hire.
So when they automate the system this way on those measures it looks like they're doing well. If they keep a vacancy open because they measure the cost of workers, it often looks like they're actually saving money because they're not paying that person. But to assess the benefits of having somebody do a good job there, that's a little harder to do so they don't do that.
So I think in most of these companies the simple question you're asking, doesn't it pay to adjust your expectations a bit down, doesn't it pay in particular to perhaps provide some training for people who are not perfect fits for the job or at least give them a little time to get up to speed, you know, the answer is obviously yes, particularly when you're keeping these vacancies open for months or more as a lot of companies are now.
But the internal accounting systems are often such that it doesn't appear that way.
MARTIN: Now you're making the point that employers are asking for too much and also offering too little for the positions that they're trying to fill, but in this economy isn't that defensible, that people are going to offer as little as they can for - because there is so much demand for these positions?
CAPPELLI: Yeah. Here's the - I guess - the pushback on that. In this survey that the folks at Manpower did where they're asking employers about their problems hiring, 10 percent of those employers say the problem is people won't accept the jobs at the wage we're willing to pay. Right? So, if 10 percent are willing to say that - basically, admit the problem is we're too cheap - the real answer is probably double that or maybe more. Right?
So, if the problem is you can't get people to do the job at the wage you're paying, then you're just not paying enough and we certainly can't say that's a skills problem. You know, there's not enough applicants out there or they're not quality enough. The problem is, you know, you just don't want to pay the market wage and that's, frankly, you know, your own problem.
MARTIN: We only have a couple of minutes left, so I'm curious about whether you are seeing any response to your provocative argument. I noted that it's been, you know, picked up and is increasingly being discussed, particularly in the business press and it's kind of making its way into the general audience media. Do you see any sign that employers are listening to you?
CAPPELLI: Well, interestingly, I spoke to a group of employers this morning and, you know, I figured this would be a reasonably hostile audience - and these are HR people. But I think the arguments, frankly, begin to resonate with them. There's a lot of things that are strongly believed in the business community that simply aren't true - like, for example, the idea that there's a big skills gap, that employers can't find qualified people, that the problem is that schools are failing and people don't have the appropriate academic skills.
When you look at the evidence, for example, when you survey people who are actually doing the hiring, they never complain about a shortage of academic skills. The things they complain about are the things that employers have complained about forever with new hires. People aren't mature enough. Their discipline in the workplace isn't good enough. They've said that for 30 years that I've been paying attention to.
So, you know, some of it is bursting the bubble on some of these myths. Also, the view that, on average, schools are getting worse. That's not true. There are certainly failing schools, but academic achievement is not collapsing. It's actually ticking up slightly over the last 20 years or so. So, you know, I think it's beginning to resonate with them once they get some evidence and get some of the facts.
MARTIN: So it's not me. It's you.
CAPPELLI: Right.
MARTIN: Peter Cappelli is a professor of management and the director of the Center for Human Resources at the Wharton School. That's at the University of Pennsylvania. He's the author of a number of books, including his latest, "Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It." He was with us from Philadelphia.
Professor Capelli, thanks so much for speaking with us.
CAPPELLI: Thank you.
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MARTIN: Just ahead, it's graduation season for millions of students, but more and more students are also dropping out of college with a huge pile of debt, and now one expert says the colleges themselves are partly to blame.
ANTHONY CARNEVALE: There is a certain amount of entrapment going on here. We wave money at young people and we're surprised when they take it and then don't use it well.
MARTIN: Debt and the college dropout. That's just ahead on TELL ME MORE from NPR News. I'm Michel Martin.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.