Jeffrey Joerres, the chairman and chief executive officer of ManpowerGroup, spends a lot of time thinking about why so many people can’t find a job. Is it because there’s a mismatch between the skills that workers have and those the workplace needs? Or is it that there aren’t enough jobs to go around? Or something else? In an interview with Bloomberg Businessweek Economics Editor Peter Coy, Joerres argues that “skills mismatch” has become a meaningless catchall phrase. Below is a condensed and edited Q&A.
BBW: Why is unemployment so high?
Joerres: Businesses, governments, financial markets are grappling with powerful forces. Speed, price, labor arbitrage, re-domiciling. It’s creating a vortex that is creating pressure on the labor market, which is then being described as a skills mismatch. It’s much more nuanced than that. [Skills mismatch was first said to be a problem in] software, then it became manufacturing, then services, then education. We’ve collected this like a big tornado. We’re losing our ability to go after the problem.
BBW: Manufacturers complain a lot about finding the skills they need.
Joerres: Shop floors are becoming more complicated. Why? Global inputs, just-in-time manufacturing, new technology, smaller footprints. Workers are no longer led by a supervisor. They’re team-led. Continuous improvement. All these pressures require a different output. There are all these sophistications. Now you have to plug a worker into that.
BBW: Is this a uniquely American issue?
Joerres: I can travel around the world—China, Vietnam, India, Italy, France, Brazil, Mexico. We all have skills mismatch and gap discussions. Which is one way of saying it’s not just lack of demand. Emerging markets are experiencing this. “Skills mismatch” is too much of a generalized statement, though. It’s become this catchphrase. If you’re sitting on a panel talking about this, it becomes a tower of Babel. Welders. Ruby on Rails programmers. Language skills. What do we do with that? The fact is, yes, it exists. Yes, it is more acute than before. And no, it’s not the one thing that’s our big issue.
BBW: Could employers get the skilled workers they needed if they paid more?
Joerres: We’ve tested that on an micro scale. Welding. I sat with a company that needed 100 welders and interviewed 1,200 and ended up with 50. Only 50 could make it through the specialized requirements. They are, yes, paying more. [To get all 100 they needed] you would have to raise pay dramatically and steal the talent from someone else, which now creates a problem for the other person. That’s not solving the skills shortage, it’s solving your skills shortage. Now we move from welders to, let’s say, CNC [computer numerical control machinery] to QA [quality assurance]. It’s across the board. One could say if all wages were higher, but the highest wages are in manufacturing anyway, compared to service, and you still have all these openings in manufacturing.
BBW: What’s wrong with manufacturing?
Joerres: We’ve lost the honor in technical skills and apprenticeship jobs. I’m 53. I was the first part of the knowledge economy. [The message was] everybody has to go to college. That was kind of a mono theme. We need to have a little bit more complicated message. There are all these jobs over here. They can be a plumber and make $80,000 a year. There’s this perverse sense that it’s better to be a history major and wait tables than to be a plumber and make four times as much.
BBW: How can we fix this?
Joerres: It’s education. Everyone’s got a shared responsibility. You’ve got to get people in the flow of learning. It’s got to be iterative rather than episodic. Schools aren’t equipped to do [iterative teaching]. Employers aren’t, either. At McDonald’s the person behind the counter is no longer making change, no longer putting on an extra pickle. They dummied the skill down. You need less skilled people than you did 10 years ago. The quest for most companies is to dumb down jobs. But in manufacturing, after simplification of tasks, they did aggregation of those tasks to create a better output. [So jobs got more complex after all.]
BBW: So education and training are the answer?
Joerres: I try to clear my mind. The problem needs more definition. We’re trying to solve for a skills mismatch, and we should be breaking it down to job, region, etc. Business is under intense pressure, and they have to be careful not to set up a training program that has poor efficacy or the game changes on them two years from now or a year from now. Training has to be more iterative, build as you go. Because things will change. It will only get faster. That’s the sad part of it for the long-term unemployed. They haven’t built muscle strength during the most critical period for training. We’re in a constant state of change. You can come back to work after vacation and feel like you’ve gone down the rabbit hole.
We’re losing our focus. We need more constructive answers instead of just throwing that big balloon up in the air.