Saturday 17 August 2019

US employers struggle to find the right staff among 13.9 million unemployed

Vivien Lou Chen and Jillian Berman

Bill Begal said he has spent almost $2,000 since March on help-wanted ads in newspapers, websites, and state employment services up and down the East Coast of America to find sales and administrative staff for his Maryland-based disaster-clean-up company.

"I want people to come out and work for me," said Mr Begal (42), whose teams responded to hurricanes Katrina and Wilma, which struck New Orleans and Florida in 2005.

Behind the highest unemployment levels in more than a quarter century is an unexpected twist: employers like Mr Begal and Microsoft are having a difficult time filling some positions, even as 13.9 million Americans remain without work.

The problem is especially acute in pockets such as Washington DC and North Dakota, which bucked the worst of the 18-month recession that ended in June 2009, and in industries such as technology where competition for recruits remains high.

"It's a very much across-the-board phenomena," said Jeffrey Joerres, president and chief executive officer of Milwaukee-based ManpowerGroup, the world's second-largest provider of temporary workers behind Switzerland-based Adecco SA.

"Companies are all feeling the pressure of not finding the level of talent their businesses require," from "entry-level service positions" to "high-end engineers."

The failure to match willing employers with appropriate workers is contributing to a jobless rate that has stalled around 9pc or higher since April 2009 and is keeping the unemployed on the sidelines for longer. The rate was 9.1pc in July.

More than 40pc of people out of work have been without a job for 27 weeks or more, according to the Bureau of Labour Statistics, making it more difficult for them to re-enter the workforce later as their skills erode.

US central bank researchers are trying to determine how much of the elevated unemployment rate is caused by permanent labour market changes that monetary policy can't fix.


"You do have a skills mismatch out there and a significant one," said Brian Barish, Denver-based president of Cambiar Investors LLC.

While Mr Barish said he didn't have a strong idea what Federal Reserve Chairman Ben Bernanke and his colleagues would do at their meeting tomorrow, "there's a reasonable likelihood they would hint at additional policy action", including a change to the wording of their pledge to keep interest rates near zero for "an extended period".

The Fed cut the target for the benchmark federal funds rate to between zero and 0.25pc in December 2008.

Low rates over a longer period will ultimately help the US stock market, in spite of last week's declines, Mr Barish said.

Mr Begal, founder of Begal Enterprises Inc, is among a half dozen entrepreneurs who said during interviews that they were having a hard time landing new employees in the Washington, DC area, which has an unemployment rate of 6.2pc.

Some candidates lack the "right set of skills"; others fail to meet the "most basic of qualifications," such as proper spelling on their applications, the business owner said.

So even though the pool of potential employees "has gotten deeper," the "top talent searches remain as challenging as they were before the recent market conditions," said Julie Rakes, a spokeswoman for bank and credit-card issuer Capital One Financial Corp.

The recession that began in December 2007 accelerated existing labour market trends in the US, from increased global competition for talent to companies becoming more efficient and exacting in their requirements for new workers, said Manpower's Mr Joerres. With demand for goods and services now sagging, "these things are driving the latency in hiring", he said. "Companies can wait" and have "raised the bar".

Divya Gugnani, chief executive of fashion-accessory internet site Send the Trend in New York, said she had filled only one of five openings, even though she had received more than 1,000 applications. Candidates are using a "dart" approach -- submitting lots of resumes in the hope that one will attract attention -- and sometimes fail to specify even which position they want.


Getting the right people is like "finding a needle in a haystack", said the 34-year-old business woman.

The hiring struggle crosses regions and industries, according to the Fed's Beige Book survey of economic conditions released on July 27. Advertising and consulting companies in the north-east say their inability to land qualified people is hurting sales growth. Truckers in the midwest are coming up short on drivers, and manufacturers in the Chicago Fed's five- state area aren't getting "appropriately skilled workers," the report said.

Redmond, Washington-based Microsoft, the world's largest software maker by sales, has lobbied Congress for years to boost the number of H-1B visas available to employ foreign workers in the US, even as the company cut jobs there.

The US is "falling short" on education, creating a situation where "jobs move in search of the right people" rather than the other way around, the company's general counsel Brad Smith said.

"We will not bring unemployment down to the extent desired until we 'skill up' the population to attract the jobs that otherwise will be located elsewhere," Mr Smith said.

Mr Begal said he began posting ads five months ago. "I keep tweaking the ads to appeal to more people," he said. "The results are disappointing: zip, zilch, de minimis, pathetic."

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