Skip to main content

When Peter Cappelli published an industry-admonishing article vis-a-vis the 'skills gap' in the Wall Street Journal, it attracted a good bit of notice.  Steven Cherry at IEEE Spectrum recently interviewed Cappelli masterfully.  Cappelli demolishes the irrational beliefs, the vaulting greed, of the jobs-market gatekeepers.

Cappelli is an expert on management at the Wharton Business School. Not only is his expertise in management formidable, he is a free-marketeer and by no means interested in challenging the economic paradigm.  Instead, he convicts private industry of hypocrisy--claiming to be following the 'invisible hand' (and urging that workers acquiesce to unreasonable demands) while really doing no such thing:

Steven Cherry: Employers can’t find workers at the going wage. True or false?

Peter Cappelli: That’s false, and that’s almost by definition the case, because we know how markets work, and markets adjust and wages adjust. I had an employer write to me the other day saying they had a skills gap, and they really did. It wasn’t wages, because they did market wage surveys, and they were paying what everybody else was paying, and all the employers, by the way, are having a skills gap, so it’s a big problem. Well, if everybody’s got the same problem, and you’re all paying the same wage, it’s probably the case that you’re not paying enough. So the way markets work isn’t you set the wage and say, “Well, this is good enough.” You pay what it takes to get the people you need, and if wages have to go up, then so be it, right? You wouldn’t say, for example, that there’s a shortage of diamonds. Diamonds are very expensive. They cost a lot, but you can buy all the diamonds you want as long as you’re willing to pay.

Much of the blame for this illusion that--There. Are. No. Qualified. Applicants.--lies squarely at the feet of the untouchable HR department:
"...now every company will tell you they’re getting thousands or tens of thousands of applicants for positions. You couldn’t possibly screen them all by hand, because you can’t look at them all, so they use automated systems to do the screening. But the screening is never as good as somebody who has human judgment, and the way screening works is you build in a series of typically yes/no questions that try to get at whether somebody has the ability to do this job. ...And you have to clear them all, and I think people building these don’t quite understand that once you have a series of these yes/no questions built in, and the probabilities are cumulative right? You have to hit them all, then you pretty easily end with no one that can fit.

"So say that the odds are 50 percent that the typical applicant will give you the right answer in terms of what you’re looking for for the first question, and a 50 percent that they’ll give you the right answer to the second question. Well, then, you’re down to one in four people who will clear those two hurdles, and once you run it out to about 10 questions, it gets you down to about one in 1000 people who would clear those hurdles. And by the way, the first hurdle is usually, What wage are you looking for? And if you guess too high, out that goes, right? So then you’re at the purple squirrel point, where at the end of the day, you find that nobody fits the job requirement."

This is how, Cappelli describes, an opening for a standard engineering position turned up 25,000 applicants and no match. Of course, this drive to reduce applicants to tests (if this seems familiar, it may be drawing parallels with our recent disastrous foray into standardized testing-based education) fails at judging qualitatively, something you need a human's judgement to do on an individual basis. Cappelli argues as such, by the way.

The interview is 16 minutes long and can be listened to here:
http://spectrum.ieee.org/...

Originally posted to Nulwee on Mon Jun 25, 2012 at 09:05 AM PDT.

Also republished by In Support of Labor and Unions, Unemployment Chronicles, and EconKos.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site