12
HR
West
O
ne way to answer this question is to see
whether the level of hiring now is different
than one would expect given unemployment
rates this high. This ratio of job openings to
unemployment when calculated over time is known
in economics as the Beveridge Curve, named after
the British economist William Beveridge. Several
studies during this recession seemed to indicate that
the situation was similar to previous recessions, but a
recent study points to one big anomaly: Job openings
are not being filled nearly at the rate they have been
in previous recoveries. In other words, vacancies are
staying vacant for a very long time.
If so, then the next question is, why? Why aren’t
employers filling those jobs? The popular explanation
that there is something wrong with the applicants
has no support. There is no “mismatch” between the
industries and occupations where people were laid off
and where hiring is taking place, for example. Jobs
have not changed over the last couple of years in any
way that changed skill requirements substantially. The
“failing schools” notion, even if it was true, couldn’t
explain the continued unemployment of the majority of
job seekers, who graduated years ago and had jobs
just before the recession.
The better answer comes from the ways in which
contemporary practices have made hiring more
difficult. Companies regained profitability during the
recession with a relentless squeeze on costs, and most
of that squeeze was associated with labor. We know,
for example, that employers are spending far less to
recruit and hire a candidate than before the recession,
which may make it harder to find the right person.
Line managers with profit-and-loss responsibility also
have a big financial incentive to avoid adding new
employees and the associated costs, so the pressure
to hire often comes from overworked employees who
demand more help when business and the workload
picks up. But even when managers give permission to
hire, they may drag their feet about actually bringing
someone on. With all those people looking for jobs,
why not be picky? Candidates routinely report that
WHY EMPLOYERS AREN’T
FILLING THEIR OPEN JOBS
By Keynote Speaker, Peter Cappelli
> JOBS HAVE NOT CHANGED
OVER THE LAST COUPLE
OF YEARS IN ANY WAY THAT
CHANGED SKILL REQUIRE-
MENTS SUBSTANTIALLY.
Keynote Speaker
Therearemanysigns that theU.S. economy is improving, but themost important
one, the unemployment rate, remains stubbornly rooted in recession territory.
We had jobless recoveries coming out of the last recessions in 2001 and 1992,
but this one put the budget squeeze on recruiting and has gone on for a very
long time. Does it mean there is something really different this time?
