Bill Begal says he has spent almost $2,000 since March on help-wanted ads in newspapers, websites, and state employment services up and down the East Coast to find sales and administrative staff for his Rockville (Md.) disaster cleanup company. “I want people to come out and work for me,” says Begal, 42, whose teams responded to Hurricanes Katrina and Wilma in 2005. “Where are they? I just don’t see it.”
Behind the highest jobless numbers in a quarter century is an unexpected twist: Employers such as Begal and Microsoft (MSFT) struggle to fill some positions, as 13.9 million Americans remain without work.
The inability of tech companies to land enough new hires with advanced engineering skills is pretty well-known. Yet qualified workers are missing even in sectors where you would expect to find them. “It’s a very much across-the-board phenomenon,” says Jeffrey Joerres, chief executive officer of Milwaukee-based ManpowerGroup (MAN), the world’s No. 2 provider of temporary workers. “Companies are all feeling the pressure of not finding the level of talent their businesses require.”
Begal, founder of Begal Enterprises, is among a half-dozen entrepreneurs interviewed for this story who said that they’re struggling to hire new employees in the Washington area, which has a jobless rate of 6.2 percent. Some candidates lack the “right set of skills”; others fail to meet the “most basic of qualifications,” such as proper spelling on applications, the business owners said. So even though the pool of potential employees “has gotten deeper,” the “top talent searches remain as challenging as they were before the recent market conditions,” says Julie Rakes, a spokeswoman for bank and credit-card issuer Capital One (COF).
The recession accelerated existing trends that make hiring harder, from increased efficiency at companies to higher skill requirements, says Manpower’s Joerres. With demand sagging again, he adds, “companies can wait” and have “raised the bar.” Salespeople, he says, now need a better understanding of finance, PowerPoint skills to make their own presentations, and a working knowledge of customer relationship management software.
Divya Gugnani, CEO of fashion accessory Internet site Send the Trend, says she has filled only one of five openings, even though she’s received more than 1,000 applications. She says candidates are using a “dart” approach—submitting lots of résumés in hopes one will attract attention—and sometimes even failing to specify which position they want. Getting the right people is like “finding a needle in a haystack,” she says.
The search for that needle crosses regions and industries, according to the Fed’s Beige Book survey of economic conditions released on July 27. Advertising and consulting companies in the Northeast say their inability to land qualified people is hurting growth. Truckers in the Midwest need drivers, and Chicago area manufacturers aren’t getting “appropriately skilled workers,” the report says. “The more this drags on, the more concerned we should all be getting that a lot of human capital is being lost,” says Daniel Aaronson, director of microeconomic research for the Federal Reserve Bank of Chicago.
A lack of mobility—particularly for homeowners who owe more than their dwellings are worth—keeps workers from going to where the jobs are, says Scott Paul, executive director of the Alliance for American Manufacturing. There’s also a bias against hiring the long-term jobless, he says. Longer term, companies face a dearth of machinists, lathe operators, and other skilled workers because vocational education has been “decimated” in parts of the U.S., and young people aren’t interested in manufacturing work.
Some companies, such as ArcelorMittal (MT), are molding prospective employees themselves. The world’s biggest steelmaker has a “Steelworker for the Future” program that pays U.S. high-school graduates to undergo 2.5 years of training, with the chance to earn $17.39 an hour with the company upon completion. ArcelorMittal started the program because older steelworkers were retiring, and it needed workers grounded in mechanical and electrical crafts.
Begal says he began posting ads five months ago in places such as the Washington Post, Craigslist, and Monster Worldwide (MWW) to fill three to five sales positions with pay that could exceed $100,000 apiece, as well as two office jobs offering at least $40,000. He first required sales candidates to have experience in marketing disaster-restoration services. Few responded, so Begal re-wrote the ads asking for two years of experience in any field. Not much better. He’s on his fourth rewrite, has dropped the need for two years’ experience, and is seeking applicants who are simply “hungry.” “I keep tweaking the ads to appeal to more people,” he says. “The results are disappointing: zip, zilch, de minimis, pathetic, horrible.”