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Cheap talk

Rochester Business Journal
August 22, 2014

Employers have been complaining about a “skills gap” for years, saying there’s a shortage of qualified candidates for jobs they seek to fill. But what if the gap truly does not exist?

That is the provocative stance taken by Peter Cappelli, a professor of management and director of the Center for Human Resources at the University of Pennsylvania’s Wharton School. He argues that employers deserve blame for their inability to hire capable people.

How so? In a new working paper, Mr. Cappelli maintains that employers could attract and hire skilled workers if they were willing to pay more. Alternatively, they could step up training to teach the skills needed to perform at a high level on the job.

The new paper echoes earlier writings by Mr. Cappelli. For instance, in a New York Times piece two years ago, he told employers: “If you could get what you want by paying more, the problem is just that you are cheap.”

To that, he added: “The fact that I cannot find the car I want at the price I want to pay does not constitute a car shortage, yet a large number of employers claiming they face a skills shortage admit that the problem is getting candidates to accept their wage rates.”

Mr. Cappelli is not the only one who thinks paying more would make a real difference.

In the most recent Rochester Area Skill Needs Assessment and Business Climate Survey, conducted by Monroe Community College in partnership with the Center for Governmental Research Inc. and the Rochester Business Journal, employers estimated that a pay hike of 20 percent would be enough incentive to fill most middle-skill openings.

So why don’t they just do it and stop complaining about the skills gap? Maybe it’s because they believe they cannot afford a 20 percent increase in labor costs.

Does this make them cheap or prudent?

Certainly, employers need to do whatever they can to attract good job candidates. And they should not expect government or educational institutions to carry the full load of training workers who have a high school diploma but lack specific skills.

But reducing the skills gap to a blame game won’t solve anything.

8/22/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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