Peter Cappelli was a keynote speaker at Cielo's Annual Talent Rising Client Summit. Peter Cappelli shares his thoughts on the current issues regarding hard-to-fill positions, the talent mismatch, and continued education.

1. 1Content Property of Cielo
WHY GOOD PEOPLE
CAN’T GET JOBS
PETER CAPPELLI, THE WHARTON SCHOOL
2014 Talent Rising Client Summit
May 14-15, 2014

2. Why Good People
Can’t Get Jobs
Peter Cappelli
The Wharton School

3. Employers Continue to
Complain about Not Finding
Candidates They Want
Less recruiting, lower wages, higher expectations (no
training), pressure not to fill jobs because of profit concerns,
crazy hiring practices, etc.?

4. Crazy Hiring Processes?
Applicant tracking software

5. Is Education the Problem and the
Answer?
• Need more STEM degrees
• Every report from the business community
says this
• Bill Clinton – more four year degrees
• President Obama – at least one year of post grad
for everyone

6. Are They Right?
• Is more education necessarily good and for whom?
• Fallacy of composition: Pays to have an MBA, e.g., but not if
everyone has one
• Who pays for it? Is it a good investment for individuals?
• Are employers using the workforce skills they have already?

7. Where the Jobs Are…

9. Are US Schools Really Failing?

10. How about
compared to other
countries?
Latvia and Liechtenstein are gaining on us!
In Asia – 75% also go to cram schools….

11. Most Americans are
Overqualified for their
Jobs*
* And the gap is growing. See Education and its Discontents: Overqualification in
America, 1972-2002. Stephen Vaisey. Social Forces, 88:121-146. See also Handel, Michael J. 2003.
"Skills Mismatch in the Labor Market." Annual Review of Sociology 29:135-165.

12. Being overqualified: College grads bump high school grads
(educational attainment of persons in jobs requiring
less than a high school diploma, 2010, for Wisconsin )
JOB Title % WITH SOME COLLEGE %=BA % Total
Parking Lot Attendants 56.1 4.1 60.2
Retail Salespersons 40.8 19.3 60.1
Bartenders 43.9 12.7 56.6
Waiters and Waitresses 41.9 7.0 48.9
Counter and Retail Clerks 37.2 10.5 47.7
Stock Clerks 33.1 6.9 40.0
Cashiers 33.1 6.1 39.2
Ushers, Lobby Attendants 23.0 14.3 37.3
and ticket takers
SOURCE: Marc V. Levine The Skills Gap and Unemployment in Wisconsin: Separating Fact from Fiction. University of Wisconsin at Milwaukee,
Center for Economic Development 2013

13. The Jobs STEM Grads TakeSource:Salzman,Kuehn,Lowell.2013.GuestworkersintheUSHigh-SkillLaborMarket,EPI.

14. Hiring managers Not complaining
about academic skills in new hires

15. Complaints about new hires….

16. Hiring from college is not a big practice…

17. What do employers
actually look for in
school leavers?

20. Now we start to see
the new model…
Employers want “hit the ground running” skills –work-based,
on-the-job skills
Colleges are rushing to provide them

21. Thebigchangeistheplug-and-playlabormarket:
*Experiencedhiresnow
* 90%jobsfilledinternallybefore1980
* 30-40%filledinternallynow.

22. WhoProvidesExperience?
LessThanHalfasMany16-24yroldsareinRegistered
ApprenticeshipsNowComparedto 1950.*
TrendsinApprenticeship...;U.S.,DepartmentofLabor,NumberofRegisteredApprenticesReaches18-YearHigh,Release,USDL-8218,April
171967.and http://www.doleta.gov/OA/data_statistics.cfm.
,

23. Colleges want to fill the gap
• Business is by far the biggest major – 3x liberal arts
• Education is second – tight link to teaching
• “Liberal arts” is shrinking all the time
• Adventure tourism?
• Turf management?
• Casino construction?
• Pharmaceutical marketing?

24. College costshaverisen 4x the rate of inflation
Source:http://www.bloomberg.com/news/2012-08-15/cost-of-college-degree-in-u-s-soars-12-fold-chart-of-the-day.html

25. Percentage of US student loans in default
largely because of a lack of jobs after
graduating…
Source:Collegeboard

26. Time lags 4+ years
are long in this
supply chain
And the lags exacerbate disequilibrium…

27. Highest paying majors 2013–
all in the most cyclical occupations

28. Warning letter to new petroleumengineers…
Dear Admitted Aggie PETE Applicant,
Recent data suggests that some concern about the
sustainability of the entry level job market during a
time of explosive growth in the number of students
studying petroleum engineering in U.S. universities
may be prudent….

29. Why it is a bad idea for colleges
to provide practical job skills
1st – they aren’t good at it. Classrooms are a bad way to do it
2nd – it’s really expensive for parents who now have to front-load
the costs of learning
3rd – students and their parents take a lot of risk: No promise of
jobs in these “hot” fields
4th – who do you trust for info on job prospects from different
fields?
5th - the entire focus here is on the first job. Who is thinking
longer-term?

30. Are there alternatives?
• Employers could be more realistic about hiring
• Be reasonable about requirements, wages,
credentials
• Spend some $ on hiring – “pennywise and pound
foolish”
• “Recruiting” is easier than “selection”
• Scare away the wrong ones
• Get close to colleges

31. Yes, we can afford to train
• Consulting firms, accounting firms, all make
money doing it and still lose virtually all their
trainees!
• Training wages are legal
• Requiring course work in advance
• Set up arrangements with not-for-profits

32. THANK YOU!
2014 Talent Rising Client Summit
May 14-15, 2014