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Execs battle skills gap in hiring despite high unemployment 

Execs battle skills gap in hiring despite high unemployment 

By Ken Tysiac 
July 26 2012

For the past six years, VASCO Data Security has dealt with a chronic problem: It hasn’t been able to easily recruit qualified workers for its software and internet security operations in Europe. And the plight hasn’t gotten easier – even as a global economic crisis has led to high unemployment throughout the continent.

“It seems like in Brussels and in Zurich, both, we have a hard time when a spot opens up, filling it,” VASCO CFO Gary Robisch said. “A lot of times we have to settle for somebody that doesn’t exactly match the qualifications that we want.”

The economics don’t seem to make sense. High unemployment, one would presume, would make it easier to fill jobs. The 17-country euro currency bloc hit a record in May when unemployment rose to 11.1%, while the rate across the EU was 10.1%, according to Eurostat, the EU’s statistics office. US unemployment has hovered between 8.1% and 8.3% for the past six months.

Yet employers worldwide are still struggling to find workers with the skills to fill a wide variety of jobs. The situation is fuelling a human resources conundrum as employers ponder whether they should hold out and pony up for candidates with key skills or look to on-the-job training for promising candidates.

Companies report difficulty locating IT professionals, engineers, accountants and specialised workers such as tugboat captains and MRI technicians. The conundrum is particularly glaring in pockets of relative prosperity, as VASCO is learning; the unemployment rates in Belgium and Switzerland are lower than European averages. A similar scenario has emerged in the United States, where companies have been clamouring to grow after years of cuts.

“It just astounds me,” said Tom Kennedy, vice president and CFO of marine construction and environmental remediation company J.F. Brennan, which is having trouble recruiting a safety director, tugboat pilots and project manager-level engineers who are willing to travel for a company that does business in 18 US states.

“After doing this for 35 years, I’ve never seen it like this,” Kennedy said. “You could run an ad any place [in years past] and get 30 or 40 applicants. Now you get five to 10.”

The American Institute of CPAs’ Business and Industry Economic Outlook Survey for the second quarter of 2012 demonstrated the recruitment difficulties that management accountants are facing. Half of the 1,250 respondents said they have had difficulty filling open positions because their organisations haven’t been able to find individuals with the appropriate qualifications.

Worldwide problem

Other reports indicate a similar problem worldwide. In the PwC Global CEO survey for 2012, 43% of global respondents said that, in general, it has become more difficult to hire workers in their industry. Just 12% said it has become easier to hire. In addition, 29% of CEOs said they were unable to pursue a market opportunity because of talent constraints.

A recent World Economic Forum report said there is a worldwide talent shortage with 10 million manufacturing jobs unfilled across the globe. Craig Giffi, chairman of the Global Manufacturing Industry practice of Deloitte Touche Tohmatsu, called the problem “a pretty daunting challenge” that’s unlikely to abate soon.

Manufacturing is providing a path forward for emerging economies, but the jobs it creates often aren’t menial labour positions. “Even when there’s a high use of labour versus capital-intensive technology, the skills that are required are much more sophisticated than they’ve been in the past,” Giffi said.

The long-term solution for manufacturing could involve changes in educational systems. India’s government has engaged private industry to create a new National Skill Development Corporation to identify and fund vocational education businesses, according to the World Economic Forum report.

In the United States, the Manufacturing Institute launched a Manufacturing Skills Certificate System to work with high schools and community colleges to train future employees, the report says.

“I think we’re just going to see more of those types of collaborative development of the workforce outside of the school systems, and collaborative work between companies, community colleges and school systems, to turn out the workforce they need,” Giffi said.

Hire and train

Short-term solutions to the skills gap are more elusive.

Companies worldwide are trying to combat the skills gap by integrating human resources with high-level business planning, according to the PwC report. But CEOs are frustrated with the issue of talent, the report says, because productivity and labour cost metrics do not isolate skills gaps or identify the pivotal jobs that drive value.

“Close to 15% of energy-related investments around the world fail or are lost because a suitable workforce is not available,” Zsolt Hernádi, chairman and CEO of Hungarian oil and gas company MOL Plc., said in the PwC report.

Baba Kalyani, chairman and managing director of India-based auto component manufacturer Bharat Forge Ltd., said in the report that talent is the most strategic issue for India. Kalyani said there is a gap between the skills of technical institute graduates and those needed by industry.

Some companies are hiring and then training workers who are missing one or two skills. Ryan Sutton, a senior vice president at staffing firm Robert Half, said a hire-and-train model can be an answer.

“At some point you need to drop back and really come up with a development programme that allows you to pay the right wages according to your guidelines as an organisation,” Sutton said. “If you need a staff accountant and you can’t find them with Oracle experience, really look at finding someone who doesn’t have that, and then through a training and development process, get them the right skills internally and really work on developing those people.”

‘The needle-in-the-haystack search’

Robert Lawson, assistant controller for government accounting compliance for US defence contractor ITT Exelis, is using a version of that tactic. He struggles to find accountants with enough working knowledge of governmental compliance accounting to do a job that deals heavily with regulatory issues.
But he is taking junior-level employees with some working knowledge of the regulations and training them internally for more advanced positions.

A rural US hospital, meanwhile, stopped providing MRIs and other high-end scans on weekends because it couldn’t find enough technicians to run the machines.

“If you come in with a trauma injury, we’re going to life-flight you out [to another hospital], and it’s going to cost you a lot of money for the air ambulance to go someplace,” said Coshocton County (Ohio) Memorial Hospital CFO Robin Nichols. “Unfortunately, that’s where we are. We can’t provide the service.”

Concern over the economy obviously is another big factor for employers who are reluctant to hire. But the shortage of available, skilled talent also is a significant hurdle in a wide variety of industries.

“We hear horror story after horror story about the needle-in-the-haystack search when they’re looking for skilled employees, and the frustration that companies have when they hire somebody and they don’t get the skills they thought they had,” Giffi said. “At the same time, when you talk to the executives of the C-suite, when you talk to the CEO, they know that they have to change the way they’re [hiring].”

Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.

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4 Comments


Comments
Valerie Campbell

I live in the US, Seattle to be exact, the home of Microsoft and Amazon, companies who state they cannot find qualified talent for any area of business operations.  

Most companies have laid off older workers to avoid the cost of benefits.  It is the older workers who built the success of these companies and brought these companies into our new age of technological evolution.  It is the older workers who understand how to mentor and bring concepts to fruition and use the creativity inspired by younger workers bringing new talent and education to the workplace.  There is value in having the older experienced person in the employment ranks.  Perspective, reduced learning curve, ability to learn and apply knowledge in new ways.

Since gutting the workforce of the older workers, companies are now saying there is no one to fill the "all of a sudden need for technology skills that its obvious Americans don''t have" ????  This is simply inexperienced younger staff, who are under qualified for the advanced jobs they now hold, complaining that no one is there to fill a specific need because they don''t know how to manage.

Sort of like "hey mom, can you do my laundry?" rather than knowing how to do the laundry.  Its pathetic.

There is always a need for new college graduates with new skills, but never before in the history of this country have companies gutted their management teams and put junior in charge.

We don''t need to open our borders to unlimited IT workers from India because we do not want to hire experienced programmers back into the workforce.

People from other countries may have tech skills that they want to hire, but they don''t have the ingenuity, creativity, and drive to innovate.  Innovation belongs to the first world companies and innovation comes from those employees who have depth of experience.

Sure there will be a few flashes in the pan and new PhD''s with amazing research, but you need the structure to make it all work.

In finance, especially at Amazon and Microsoft, they have changed all the accounting job titles to "Analyst" for the purpose of reducing pay scales.

In the US the job title Analyst is compensated at a lower rate than Accountant.

Changing the job titles and merging 3 jobs into one might seem like a good idea in the judgment of a younger person, but in the end companies will suffer.

The unemployed people have been interviewing long and hard without getting a job over the last 5 years and we now know the cultures of many of these large companies.  Most times during interviews, older candidates have been mistreated and discriminated against blatantly.  Therefore we now know who we will not work for. This has resulted in many applicants ignoring various companies that have poor culture or lack of ethics.

The people who kept their jobs during the recession and treated people badly will now realize they are not able to recruit the underqualified or the overqualifed because of how they have displayed their culture to candidates.

The unemployed have networking groups and share information readily and grade companies and make decisions about what jobs they will accept based on how their networking partners have been treated in interviews by these arrogant companies.

So yes, there is a lack of talent, for bad company cultures.  No we should not open our borders, and yes, CEO''s need to wake up and realize what they have done to the public and their company reputations.

The idea behind CPAs needing to disengage themselves from bad ethics situations is that no CPA should be found to fill that position.  Due to non disclosure agreements replacement CPAs never have any information about why the last CPA left the job.

But the theory is that CPAs should not take these roles not only to protect their own reputation, but to cause others not to take the role.  When the company cannot find good employees then the idea is that it must change its culture.

For what it is worth.

Sep 28, 2012 4:03 AM
Comments
MargaretLong

Adrian I agree. There are a lot of knowledge workers who are working for executives that are less qualified. I am tired of the whining at the executive level, especially when I do not see them posessing or improving their own skills to match what they are trying to hire. I have spent nearly a quarter of a million on my education and certification over 25 years in my field. Most of the whiny ones have bachelors degrees and no certification. Is it any wonder why they cannot recognize and pay for good talent? It is because they are overpaid and self serving. Good executives have good networks and set a good example. I never have problems finding qualified people or treating them respectfully.

Sep 7, 2012 8:06 AM
Comments
Dennis Russell

Amen! ... if I had the authority I would hire you in a New York minute. Hang in there ... don''t give up ... Godspeed and God bless!

Aug 31, 2012 7:01 AM
Comments
AdrianShiel

Getting a little tired of all the CFO''s and CEO''s whining that they can''t find talent.  I am, so my CV suggests, a well Qualified CIMA (1997) CPA (2011) MSc (2001) who has worked across multiple sectors, in different size companies and in a variety of finance roles.

BUT I have been applying for jobs now for 3 months, 53 applications for jobs ranging from Finance Analyst, Finance Manager to CFO, Financial Controller.  One interview so far but what excuses I have received?

Overqualified, Underqualified, No Industry experience, Wrong System Experience, No SOX experience, Not worked for a US business, Had my own business (really that was an excuse why I couldn''t now work for a big corporate.)

The problem and answer is in the above article a) Stop Looking for perfection (it doesn''t really exist) b) Settle for 80% and train the rest - YES INVEST IN THE PERSON.

If I have used 6 financial systems over my career do you think not having your system on my list is a major drama?  NO it isn''t because I learn systems quickly and bring a wealth of previous experience with me.

If I am underqualified for the role (lets face it I wouldn''t apply if I thought I missed the mark that much) then tell me, offer me the job and invest in me.

If I am overqualified think of all the free experience I can bring to your company AND don''t worry that I want your job, that''s a good thing for the company.

If I don''t have your industry experience (and lets hope you don''t want me to make delicate viral weaponry) then look on the experience I bring from other industries as a major plus - after all YOU the CFO or CEO will mentor me to learn your industry.

Aug 31, 2012 4:55 AM
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