WASHINGTON The jobs crisis has brought an unwelcome discovery for many unemployed Americans: Job openings in their old fields exist. Yet they no longer qualify for them.
They're running into a trend that took root during the recession. Companies became more productive by doing more with fewer workers. Some asked staffers to take on a broader array of duties — duties that used to be spread among multiple jobs. Now, someone who hopes to get those jobs must meet the new requirements.
As a result, some database administrators now have to manage network security.
Accountants must do financial analysis to find ways to cut costs.
Factory assembly workers need to program computers to run machinery.
The broader responsibilities mean it's harder to fill many of the jobs that are open these days. It helps explain why many companies complain they can't find qualified people for certain jobs, even with 4.6 unemployed Americans, on average, competing for each opening. By contrast, only 1.8 people, on average, were vying for each job opening before the recession.
The total number of job openings does remain historically low: 3.2 million, down from 4.4 million before the recession. But the number of openings has surged 37 percent in the past year. And yet the unemployment rate has actually risen during that time. Companies still aren't finding it easy to fill job vacancies.
Take Bayer MaterialScience, a unit of Bayer. When the company sought earlier this year to hire a new health, safety and environment director for one of its plants, it wanted candidates with a wider range of abilities than before. In particular, it needed someone skilled not just in managing health and safety but also in guiding employees to adapt to workplace changes.
Joe Bozada, chief of staff for Bayer's CEO, said the company initially interviewed 30 candidates. Then it did final interviews with seven. But none had the additional experience the company now wanted. Ultimately, Bozada said, the company chose one of its own employees it had already trained.
That shift, across multiple industries, has caught the eye of David Altig, research director at the Federal Reserve Bank of Atlanta. Workers aren't just being asked to increase their output, Altig says. They're being asked to broaden it, too.
A company might have had three back-office jobs before the recession, Altig said. Only one of those jobs might have required computer skills. Now, he said, "one person is doing all three of those jobs — and every job you fill has to have computer skills."
The trend is magnifying the obstacles facing the unemployed. Economists have long worried that millions of people who have lost jobs in depressed areas like construction don't qualify for work in growing sectors like health care. But it turns out that some of the jobless no longer even qualify for their old positions.
Frustrated in their efforts to find qualified applicants among the jobless, employers are turning to those who are already employed.
"They're hiring a known quantity that already has this specific experience on their resume," said Cathy Farley, a managing director at Accenture. "It is slowing some of the re-hiring from the ranks of the unemployed."
Only 49 percent of people laid off from 2007 through 2009 were re-employed by January 2010, according to a Labor Department survey. It's the lowest such proportion since the survey began in 1984.
And more than 40 percent of the nearly 15 million unemployed Americans have been out of work for six months or longer. That's near the record high set during the recession.
Some of the unfortunate ones are information technology workers. One reason is that tech companies are increasingly combining business analyst and systems analyst positions.
Suppose a company wants a new software application. A business analyst would seek the least expensive approach and then propose the technical requirements. Separately, a systems analyst would build the technology.
But now, employers want "those two skill sets in one human being," said Harry Griendling, chief executive of DoubleStar Inc., a staffing firm outside Philadelphia.
The trend reflects the push that companies made during the recession to control costs, squeeze more output from their staffs and become more productive. Productivity measures output per hour worked. Economy-wide, it soared 3.5 percent last year. It was the best performance in six years.
And it means workers are bearing heavier burdens. In manufacturing, employees increasingly must be able to run the computerized machinery that dominates most assembly lines. They also have to carry out additional tasks, such as inspecting finished products, notes Mark Tomlinson, executive director of the Society of Manufacturing Engineers.
Manufacturers advertised nearly 200,000 jobs at the end of August, a jump of about 40 percent from a year ago, according to government data. Yet hiring by manufacturers has risen less than 6 percent over that time — evidence that they are having a hard time finding qualified workers.
"There are jobs available, but the worker just has to have more skills than before," Tomlinson said.
Bob Brown, 49, has felt the demand for broader skills firsthand. After working for 30 years in manufacturing, including 20 as a plant supervisor, Brown was laid off in July 2009.
He spent a year looking for a new job. His efforts yielded only three calls from employers in the first four months.
But once things began to pick up, Brown noticed something else: The plant manager jobs he used to have, and that he was aiming for again, all required certifications in productivity-boosting management practices.
So Brown paid for courses at a community college to learn a management strategy known as "six sigma." It's an approach to cutting waste and raising efficiency popularized by General Electric. The courses allowed him to obtain his certification. In August, he was hired by an electrical product assembly plant near Williamsport, Penn.
"That's the way the industry's going," Brown said. "Everybody wanted certifications."
Human resource specialists say employers who increasingly need multi-skilled employees aren't willing to settle for less. They'd rather wait and hold jobs vacant.
HR specialists even have a nickname for the highly sought but elusive job candidate whose skills and experiences precisely match an employer's needs: the "purple squirrel."
"There are lots of requests for purple squirrels nowadays," said Joe Yesulaitis, chief executive of Aavalar Consulting, an IT staffing firm.
Monday, October 11, 2010
3 win economics Nobel for job market analysis
STOCKHOLM – Two Americans and a British-Cypriot economist won the 2010 Nobel economics prize Monday for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies.
Federal Reserve board nominee Peter Diamond was honored along with Dale Mortensen and Christopher Pissarides with the 10 million Swedish kronor ($1.5 million) prize for their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets.
Diamond — a former mentor to current Federal Reserve chairman Ben Bernanke — analyzed the foundations of so-called search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market.
Their work, dating back to the 1970s and '80s, sheds light on why the classical view of markets, in which prices are set so that buyers and sellers always find each other and all resources are fully utilized, doesn't always apply to the real world.
One example is the housing market, where buyers can struggle to find new homes even though there are a number of unsold properties available.
Another is the labor market. Because searching for jobs takes time and resources, it creates friction in the job market, helping explain why there are both job vacancies and unemployment simultaneously, the Royal Swedish Academy of Sciences said.
"The laureates' models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy," the citation said.
Their work resulted in the so-called Diamond-Mortensen-Pissarides model, a frequently used tool to estimate how unemployment benefits, interest rates, the efficiency of employment agencies and other factors can affect the labor market.
"One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times," the academy said.
Diamond, 70, is an economist at the Massachusetts Institute of Technology, and an authority on Social Security, pensions and taxation.
President Barack Obama has nominated Diamond to become a member of the Federal Reserve. However, the Senate failed to approve his nomination before lawmakers left to campaign for the midterm congressional elections.
Senate Republicans have objected to what they see as Diamond's limited experience in dissecting the inner workings of the national economy.
Bernanke was one of Diamond's students at MIT. When Bernanke turned in his doctoral dissertation back in 1979, one of the people he thanked was Diamond for being generous with his time and reading and discussing Bernanke's work.
Diamond said he was returning to his suburban Boston home from New Zealand when he found out about the prize. His wife and son picked him up from Logan Airport and he got a phone call from a friend.
"Fortunately I was sitting down and wasn't behind the steering wheel," Diamond said.
Pissarides, a 62-year-old professor at the London School of Economics, was the first Nobel winner with Cypriot citizenship, academy spokesman Erik Huss said.
Speaking from his north London home, Pissarides told The Associated Press the announcement came as "a complete surprise" though his work had already helped shape thinking on both sides of the Atlantic.
For example, the New Deal for Young People, a British government initiative aimed at getting 18-24-year-olds back on the job market after long spells of unemployment, "is very much based on our work," he said.
"One of the key things we found is that it is important to make sure that people do not stay unemployed too long so they don't lose their feel for the labor force," Pissarides told reporters in London. "The ways of dealing with this need not be expensive training — it could be as simple as providing work experience."
Mortensen, 71, is an economics professor at Northwestern University in Evanston, Illinois. He is currently a visiting professor at the University of Aarhus in Denmark, where the academy reached him by phone as he was having lunch with colleagues.
Mortensen told AP he was asked not to share the news until the announcement in Stockholm 30 minutes later.
"So I was sitting there at the table and I think they knew from the smile on my face what had happened. Everyone knows this is the day," he said.
Diamond wrote a paper in the early 1980s that found that unemployment compensation can lead to better job matches. Workers "become more selective in the jobs they accept" because of the employment aid. And, that makes for better matches and increases efficiency, he found.
He told a Senate committee during his nomination hearing in July that a central theme of his research has been how the economy deals with risks that affect both individuals, and the entire economy.
"In all my central research areas, I have thought about and written about the risks in the economy and how markets and government can combine to make the economy function better for individuals," he said in that hearing.
The economics prize is not among the original awards established by Swedish industrialist Alfred Nobel in his 1895 will, but was created in 1968 by the Swedish central bank in his memory.
The economics jury was the last of the Nobel committees to announce 2010 winners.
Last week, British professor Robert Edwards won the medicine prize for research that led to the first test tube baby. Russian-born scientists Andre Geim and Konstantin Novoselov shared the physics prize for groundbreaking experiments with graphene, the strongest and thinnest material known to mankind.
The chemistry award went to Richard Heck and Japanese researchers Ei-ichi Negishi and Akira Suzuki for designing techniques to bind together carbon atoms.
Peruvian novelist Mario Vargas Llosa won the literature prize and the imprisoned Chinese democracy campaigner Liu Xiaobo was named the winner of the Nobel Peace Prize.
The awards are always handed out on Dec. 10, the anniversary of Nobel's death in 1896.
Federal Reserve board nominee Peter Diamond was honored along with Dale Mortensen and Christopher Pissarides with the 10 million Swedish kronor ($1.5 million) prize for their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets.
Diamond — a former mentor to current Federal Reserve chairman Ben Bernanke — analyzed the foundations of so-called search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market.
Their work, dating back to the 1970s and '80s, sheds light on why the classical view of markets, in which prices are set so that buyers and sellers always find each other and all resources are fully utilized, doesn't always apply to the real world.
One example is the housing market, where buyers can struggle to find new homes even though there are a number of unsold properties available.
Another is the labor market. Because searching for jobs takes time and resources, it creates friction in the job market, helping explain why there are both job vacancies and unemployment simultaneously, the Royal Swedish Academy of Sciences said.
"The laureates' models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy," the citation said.
Their work resulted in the so-called Diamond-Mortensen-Pissarides model, a frequently used tool to estimate how unemployment benefits, interest rates, the efficiency of employment agencies and other factors can affect the labor market.
"One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times," the academy said.
Diamond, 70, is an economist at the Massachusetts Institute of Technology, and an authority on Social Security, pensions and taxation.
President Barack Obama has nominated Diamond to become a member of the Federal Reserve. However, the Senate failed to approve his nomination before lawmakers left to campaign for the midterm congressional elections.
Senate Republicans have objected to what they see as Diamond's limited experience in dissecting the inner workings of the national economy.
Bernanke was one of Diamond's students at MIT. When Bernanke turned in his doctoral dissertation back in 1979, one of the people he thanked was Diamond for being generous with his time and reading and discussing Bernanke's work.
Diamond said he was returning to his suburban Boston home from New Zealand when he found out about the prize. His wife and son picked him up from Logan Airport and he got a phone call from a friend.
"Fortunately I was sitting down and wasn't behind the steering wheel," Diamond said.
Pissarides, a 62-year-old professor at the London School of Economics, was the first Nobel winner with Cypriot citizenship, academy spokesman Erik Huss said.
Speaking from his north London home, Pissarides told The Associated Press the announcement came as "a complete surprise" though his work had already helped shape thinking on both sides of the Atlantic.
For example, the New Deal for Young People, a British government initiative aimed at getting 18-24-year-olds back on the job market after long spells of unemployment, "is very much based on our work," he said.
"One of the key things we found is that it is important to make sure that people do not stay unemployed too long so they don't lose their feel for the labor force," Pissarides told reporters in London. "The ways of dealing with this need not be expensive training — it could be as simple as providing work experience."
Mortensen, 71, is an economics professor at Northwestern University in Evanston, Illinois. He is currently a visiting professor at the University of Aarhus in Denmark, where the academy reached him by phone as he was having lunch with colleagues.
Mortensen told AP he was asked not to share the news until the announcement in Stockholm 30 minutes later.
"So I was sitting there at the table and I think they knew from the smile on my face what had happened. Everyone knows this is the day," he said.
Diamond wrote a paper in the early 1980s that found that unemployment compensation can lead to better job matches. Workers "become more selective in the jobs they accept" because of the employment aid. And, that makes for better matches and increases efficiency, he found.
He told a Senate committee during his nomination hearing in July that a central theme of his research has been how the economy deals with risks that affect both individuals, and the entire economy.
"In all my central research areas, I have thought about and written about the risks in the economy and how markets and government can combine to make the economy function better for individuals," he said in that hearing.
The economics prize is not among the original awards established by Swedish industrialist Alfred Nobel in his 1895 will, but was created in 1968 by the Swedish central bank in his memory.
The economics jury was the last of the Nobel committees to announce 2010 winners.
Last week, British professor Robert Edwards won the medicine prize for research that led to the first test tube baby. Russian-born scientists Andre Geim and Konstantin Novoselov shared the physics prize for groundbreaking experiments with graphene, the strongest and thinnest material known to mankind.
The chemistry award went to Richard Heck and Japanese researchers Ei-ichi Negishi and Akira Suzuki for designing techniques to bind together carbon atoms.
Peruvian novelist Mario Vargas Llosa won the literature prize and the imprisoned Chinese democracy campaigner Liu Xiaobo was named the winner of the Nobel Peace Prize.
The awards are always handed out on Dec. 10, the anniversary of Nobel's death in 1896.
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