Corporate America: Don't give up on your workersNovember 13, 2012: 5:00 AM ET
If the nation's employers have to ship jobs overseas for lack of talent, they'll have no one to blame but themselves.
By Nina Easton, senior editor
FORTUNE -- America has a jobs crisis. Not the one that dropped out of the clouds of the Great Recession. A second, less noticed employment problem is unfolding -- and it's all about job-ready skills, or in our case, the lack of them. The likely result? U.S. managers will use this as an excuse to go on a shopping spree overseas for talent.
Here's what employers are saying: There are millions of jobs coming online that American workers aren't equipped to fill. These aren't jobs that require a college degree; they are well-paid positions for high school graduates with enough math and computer training to run machinery or fix utility lines. Nice story line for execs looking to hire foreigners, partner with overseas firms, or build a shiny new plant in, say, Ireland.
The numbers of the undertrained are staggering. Despite today's high unemployment and underemployment rates, 3 million jobs continue to go unfilled -- a number that has remained steady for the past 19 months. That's a vacancy rate that, stunningly, some economists say equates with 6% unemployment, not an economy hovering around 8%. By now, employer complaints about a shortage of high-skilled workers are becoming a familiar refrain. A 2012 ManpowerGroup global employer survey found that half couldn't find people to fill positions. About a third of employers complain that applicants lack technical competency and hard skills, up substantially from the previous year. And these shortages are about to get worse as industries such as aerospace, utilities, and nursing face a demographic cliff of retiring baby boomers. "We are going to have an enormous number of jobs to replace," says Thomas A. Kochan, a professor at MIT's Sloan School of Management who studies workforce needs.
For example: In Massachusetts, over the next decade some 100,000 manufacturing jobs, paying an average of $75,000, will open up -- a number that has held steady despite the financial crisis. More than 40% of mostly small and medium-size companies report difficulty finding skilled craftsmen to replace those retiring or leaving the industry. "It's what worries these CEOs most about their futures," says Barry Bluestone, the Northeastern University political economy professor who surveyed the state's manufacturing base in 2008 and again in 2012.
But employer complaints about skilled-worker shortages always beg the question: Why not offer your own apprentice and training programs? Some do, of course. But Manpower's survey detected only a slight uptick in the number of companies getting proactive about training. Compared with overseas competitors in countries like Germany, U.S. companies have an abysmal track record. Sure, some of that is understandable. Companies, particularly small and midsize ones, may not have the money to pull off such programs. The ones that do fear that their expensively trained workers will flee to higher-paying competitors. But it's a weak excuse. Business has to be much more involved. "If the American business community really made a commitment to invest in joint programs to train and educate," says MIT's Kochan, "we could fill these so-called shortages with U.S.-trained workers."
One way is working with vocational schools, which need far more support and guidance from business. Community colleges are popular among political leaders of both parties. But because of the lack of funding and a lack of direction, they have lost their critical edge in preparing workers for a 21st-century economy. Kochan argues that their funding should be tied to a proven ability to churn out in-demand employees with a clear career path, and to forge alliances with business communities.
Unlike the Great Recession jobs crisis, this is one we see coming down the pike. There are plenty of studies documenting the skill mismatch in America. Government's track record on job training is a weak one. It's time for corporate leaders to act, or confirm their critics' worst fears: that they really have given up on America.
This story is from the November 12, 2012 issue of Fortune.