Why Jobs Go Begging Amid Layoffs

Are American employers too picky? Are they rejecting reasonable candidates at the same time they claim to have lots of openings they would like to fill?

That's a key question because the job market is still getting worse even as the overall economy shows signs of reaching bottom. On May 6 the ADP National Employment Report said the private sector shrank payrolls by an estimated 491,000 jobs in April. Economists—who don't always trust the ADP numbers—expect the Bureau of Labor Statistics to report on May 8 a decline of about 600,000 jobs in the private and public sectors combined. The median unemployment-rate forecast in the latest Bloomberg survey of economists is 8.9% for April, vs. 8.5% in March.

With the labor market so weak, it's hard to understand why so many jobs are unfilled. As BusinessWeek pointed out in a recent magazine cover story, employers reported that they had 3 million openings they were actively trying to fill as of the end of February. (The March job-openings total will be released May 12.) By contrast, there were more than 13 million people unemployed in March.

Outdated Skills

So what gives? Why don't employers give jobs to some of those 13 million people who are eager to work? Wouldn't that make everybody happy?

Employers don't see it that way. They say that jobless people don't necessarily have the skills they're looking for—especially since the sectors with the most openings (education and health care) are very different from the ones that are losing the most workers, manufacturing and construction. Even within the same industry, employers say, there are people whose skills are outdated or out of sync with what's needed for the jobs that need filling.

But BusinessWeek was deluged with comments from people, many of them unemployed, who said employers are too picky, want to avoid paying for training, want to export jobs, or would rather hire cheap foreigners on H-1B visas. Here's a typical comment from someone who signed herself Lucy: "I don't believe this article at all; it's hogwash. IBM is not laying off people because of a skills-mismatch problem. They are laying off people because they want to offshore all U.S. jobs to low-wage countries, or bring in more people to the U.S. under the H-1B visa program. They also don't want to train U.S. employees."

Workers offered similar perspectives to BusinessWeek while the story was being reported. Donald Smith, who lives in Alamo, Calif., says he has decades of experience in the semiconductor-manufacturing business but has not been able to land a job in the field since 2003. The fact that he's not currently working in the field counts against him, he says. Employers' attitude is: "You're obviously not the most qualified person because if you were, somebody would want you," Smith says.

Leery of Bad Hires

Even some headhunters said they think employers are super-picky at this stage in the recession. Managers put their own jobs at risk if they make a bad hire at a time like this, says Jay Kizer, who heads life-sciences recruiting for Korn/Ferry (KFY), a big executive recruiter. Says Kizer: "The search is open, they'd like to fill it, but they're being extremely cautious about pulling the trigger."

Of course, employers have a comeback. IBM (IBM), for example, says it has a $1 billion-a-year training budget and aims to fill many newly created jobs by shifting workers who are no longer needed in other parts of its business. In many cases, employers say, workers really don't have the ability to do the jobs that need to be done.

C. Michael King, business development manager for Workplace Staffing in hard-hit Rockford, Ill., told BusinessWeek that "we have people coming in with really no tangible skills to offer." Also, says King, some people have skills that have been rendered obsolete—for example, many tool-and-die makers. King says he knows of one skilled manual machinist who had to move into sales because he couldn't master computer numerically controlled machines.

Says King: "He's someone who doesn't have a computer at home and really doesn't know how to use a computer."

Are employers too picky, or do the unemployed have unrealistic expectations? The answer is a little bit of both.

Before it's here, it's on the Bloomberg Terminal.