Wolf Richter: Startup CEO (Unwittingly) Explains Biggest Problem in America’s Unemployment Crisis

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.

The somewhat peculiar results of the Challenger Labor Shortage Survey showed that 77% of the approximately 100 human resources executives polled said their companies were having difficulty filling open positions due to a shortage of available talent. And 45% said they were having a hard time filling tech jobs, which run the gamut from software engineers to medical technicians. About half of the companies offered some sort of incentive, from referral and sign-on bonuses to relocation assistance, to get people to jump ship.

Peculiar because there are still many millions of Americans who are unemployed. But the report was the opinion of only a tiny group of select HR executives. So not exactly a universal statement.

But today, I ran into something that put that report in a different light, via Rebekah Campbell’s article in the New York Times, which describes her experiences in trying to rope in potential investors for her company, Posse. It was a story of how time and money – two commodities a startup CEO is desperately short of – went down the drain during her pursuit of VC, angel, and corporate investors.

A successful pitch led to lunches, dinners, and drinks, and to meetings, and some took weeks to set up, and more meetings with different people, and everything was exciting, and big money was being dangled out in front of her eyes, and then there would have to be a meeting with the senior guy, who was on vacation. Due diligence had started, and she and her team got peppered with questions, spreadsheets had to be redone, projections were challenged, but there was still no term sheet that would nail down the deal. And after months of seeing money and time spiraling down the drain, she ended up without a deal.

The article is a must-read for all those thinking about outside funding for their startup. Campbell is an excellent writer, and she’s probably a great CEO of her company. She is a compelling voice from the trenches of the startup world.

So I checked out some of her other articles and came across a crystal-clear explanation of one of the most dreadful aspects of the American jobs crisis that still exists despite Challenger’s peculiar Labor Shortage Survey. She spelled out what motivates employers like her, and big companies too, to keep the unemployed from being even considered for a job.

It’s not like we’re going to run out of job seekers: the rate of the unemployed, plus those in involuntary part-time jobs, plus “marginally attached workers” is still 12.2%. Nearly 3.2 million people are currently considered “long-term” unemployed. They’ve been out of work for 27 weeks or longer. And millions of other long-term unemployed have fallen off the list for a variety of reasons. Many of them, after looking for a job for years and not making any headway, have given up and have stopped doing the things needed, such as responding to job ads, that would qualify them for the list of the unemployed. These folks can sing a song about how hard it is to find a job once you’re out of a job. And the longer you’re out of a job, the more impossible it gets.

And Rebekah Campbell, the clear voice from the startup trenches, told us why. She used to post job ads for developers on the “appropriate websites” and then “braced for the flood of applications.” She’d delete three-quarters of them and email the rest a list with questions they’d have to answer by a deadline – “to filter out at least another half who either didn’t reply in time, wrote dud answers or couldn’t spell and didn’t pay attention to details,” she explained. In the end, she’d set up some interviews, which often “would all be disappointing.”

Then she discovered that “the best candidates all had good positions and were not reading job advertisements.” Later she added the corollary: “I know the people who apply through online job ads are seldom the best candidates….”

So she decided to chase down people who already had jobs, and to heck with the unemployed and those actively seeking jobs. Her company is in Australia, but the principles are the same. She signed up with LinkedIn Recruiter and was off to the races:

Some companies, like Google, have a reputation for hiring the best developers. On LinkedIn I can run a search specifically for engineers who have worked or are currently working for Google in my area and have been in their positions for more than two years – so they might be looking for a new challenge.

Her search method seemed to be successful: “In one afternoon, I was able to set up meetings with three senior developers who work at a large competitor of ours.”

It’s not that she is using LinkedIn’s Recruiter per se, but that she’s using it specifically to exclude from consideration any candidates who are currently unemployed. She’s using it as a poaching device, and not as a tool to re-integrate a job seeker into the workforce:

As a small-business owner, I recognize that building the right team is crucial. We only have room for A-plus players, who will always be in good positions and may require quite a bit of convincing to leave. LinkedIn gives us access to the passive job hunter market that used to be available only through expensive recruiters, and it helps us seek out top quality candidates from within other companies.

She isn’t the only one. That’s how it is done nearly everywhere, from small companies to large corporations. Convenient and relatively low-cost online tools allow companies to routinely court people who are already employed and are not looking for a job. In the past, only key positions were filled that way, usually via expensive recruiters or networking. Now any position can be filled that way. It’s less risky for employers: the record of what the employee is currently accomplishing for the competitor speaks louder than a resume.

With her credentials as startup CEO, Campbell delineated the prevailing attitude in today’s business world, and simultaneously one of the most harrowing problems for the millions of unemployed job seekers. It’s one of the reasons why the unemployment crisis in America is dragging on: if you don’t already have a job, forget it.

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About David Dayen

David is a contributing writer to Salon.com. He has been writing about politics since 2004. He spent three years writing for the FireDogLake News Desk; he’s also written for The New Republic, The American Prospect, The Guardian (UK), The Huffington Post, The Washington Monthly, Alternet, Democracy Journal and Pacific Standard, as well as multiple well-trafficked progressive blogs and websites. His has been a guest on MSNBC, CNN, Aljazeera, Russia Today, NPR, Pacifica Radio and Air America Radio. He has contributed to two anthology books, one about the Wisconsin labor uprising and another on the fight against the Stop Online Piracy Act in Congress. Prior to writing about politics he worked for two decades as a television producer and editor. You can follow him on Twitter at @ddayen.

74 comments

  1. Oregoncharles

    That means it’s still a buyer’s market, doesn’t it? Otherwise they wouldn’t be able to restrict their search so much.
    How big a portion of employment are they talking about?

  2. Clive

    I’m afraid whenever I hear this sort of refrain from a c-level exec that I have a Pavlov’s dog reaction — if you can’t find the people with the skills you say you need, have you considered training them ? This article is an extension of that conundrum (although it is hardly one which is tricky to resolve) — the nuanced implication being that the unemployed have some skills but which are likely to be stale (which is at least modestly a fact when short periods of unemployment are present and a stark reality for the long term unemployed).

    Training is, again a fact, a cost to the new employer. To not then have their investment walk out the door at the first available opportunity then need to treat their employees reasonably decently. Ah-ha. Can anyone see the snag here ?

    Naturally, if an employer doesn’t want to take that risk (which is tantamount to them saying they reserve the right to treat employees crappily) they can pay a premium for hiring non-stale skilled workers. But then they are doing what they don’t want other employers to do to them — skimp on training and reduce the risk of subsequent human capital flight. Fine, but if you do that, you have to pay somewhere. Another case of corporations wanting something for nothing. Even I learned at my mother’s knee that life isn’t like that.

    The current California case of collusion between Apple, Pixar and others shows how corporations are well aware of the dynamic at work here — and the shenanigans they are prepared to perpetrate to avoid the inevitable consequences.

    1. proximity1

      RE: “Training is, again a fact, a cost to the new employer. To not then have their investment walk out the door at the first available opportunity then need to treat their employees reasonably decently. Ah-ha. Can anyone see the snag here ?”

      I think so, but, might there be a logical error in this reasoning?–since the snag would apply in any case, wouldn’t it? Concerning treating employees reasonably decently–which must be a quite variably-defined thing, depending on the kind of work involved–isn’t it a fact that employees can be roughly sorted into to groups (from the short-sighted employers’ (S-SE’s) point of view, that is) : those deemed fit, by their actual or potential qualifications, to insist on decent treatment from the employer and, on the other hand, “everyone else.”? Now, in the S-SE’s point of view, these latter can be dismissed from further consideration. That leaves us with the former group. However they arrive–as either already-qualified and needing little or no training, or, requiring the investment of training, doesn’t the employer have to take into account the risk that, as actual or potential good employees, these people can and so probably shall expect to be treated decently–and may walk out the door if they are not? So the training-investment-loss risk is there “either way” the employer goes about it. Training only presents a higher loss risk if the employer is counting on not having to treat the resulting employees decently enough to expect them to stick around. The highly-employable–as proven by the fact that they already hold steady work and have to be lured away from it by better terms and conditions, are going to rightly expect and deserve this decent-and-better treatment, right?

      Just by the way, while the assumption that most of “the best people” (however defined) are already employed may be true, the assumption that they all are is practically by definition, I suspect, false.

      1. Clive

        Yes. You’re right, there are a lot of variables and no guarantees in this area. Employers could take a risk and up skill an employee and — ungrateful ingrate that they are — they still leave even if they are treated decently.

        Conversely, you can treat employees crappily and they may, for a variety of reasons, still not choose to leave.

        As a generalisation, though, the following must apply in the long term to the majority of employees (I wish the phrase were mine, it isn’t, but it fits here):

        You can pay us like crap and treat us like kings
        You can pay us like kings and treat us like crap
        But you cannot pay us like crap and treat us like crap

        (because at the very least, in the case of the latter, the disgruntled employee will eventually leave for a job which offers equally crap pay and equally crap treatment but at least doesn’t continually reward the bad actions of the employer).

        With all these marvellous generalisations, we’d better not loose sight of the context here. Here we have a CEO vetching that they can’t get “good” (i.e. skilled) people without paying a wage premium — or else fall “victim” to a skills shortage. Well, madam, you either have to pay the piper the going rate plus an incentive to join your startup or else you have to convince would-be employees that while you won’t pay them any more, they’ll either have more fun or be less miserable working for you than working for wherever they are currently working. If you don’t make good on the last promise then it is more likely than not that (because your lured employee has already jumped ship once to join your company) they will once again defect and work somewhere else.

        1. watermelonpunch

          “You can pay us like crap and treat us like kings
          You can pay us like kings and treat us like crap
          But you cannot pay us like crap and treat us like crap”

          Yes, I’ve been saying this…

          Employers seem to be very ignorant about what workers want. It’s like there’s now a taboo against even acknowledging that workers might be humans with their own needs, desires, and decision making processes.

          Are people in hiring positions really clueless? Do they really not realize that someone might NOT opt for a job with unsociable hours, dangerous working conditions, stressful work environment, and/or a lot of responsibilities & demands, if that job doesn’t come with higher pay?

    2. washunate

      Well said. The crappiness of the workplace today is really one of the underappreciated trends in American authoritarianism.

      It is of course entirely unshocking when workers with a tiny bit of bargaining power – gainfully employed somewhere else with a particularly useful professional background – demand reasonable compensation to jump ship to a place that expects them to come in and ‘hit the ground running’.

      I love that quote where she says she only has room for A plus players. Wow, even the A students aren’t good enough. Never mind the B and C students.

      1. sgt_doom

        I appreciate your comments, washunate, well stated.

        Nice blog posting, also, and yet, contrary to the subject’s opinions, we’ve read numerous stories over the years about innovate and successful tech types who were rejected by the likes of Google and Micrsoft?

      2. Jim

        Fabulous quote: “The crappiness of the workplace today is really one of the underappreciated trends in American authoritarianism.”

      3. Stelios Theoharidis

        So she complains when VCs don’t fund her shitty startup copy of yelp which isn’t going to help in any way for her to get future funding and then she complains that she can’t find A+ prospective employees. Maybe the A+ employees don’t want what she is selling which is probably a low wage high equity scenario for working for a company that hasn’t secured funding while the owner is too busy writing NYT articles rather than focusing on her core business. It seems to be a lot of blaming everyone else.

    3. Carla

      “Another case of corporations wanting something for nothing. Even I learned at my mother’s knee that life isn’t like that.”

      Yes it is. Some special people and some corporations (i.e., banks and credit card companies), get something for nothing ALL the time.

      Our mothers didn’t really prepare us for this.

  3. Jesper

    The article explains a bit about crappification :-)

    Use a knowitall who knows nothing about the subject matter to hire experts. Yep, that’ll work….
    http://www.dilbert.com/2014-08-24/

    As for big corporation hiring: To be hired by them an applicant need to get past the firing and anti-hiring department – also known as HR. HR is at best a necessary evil, what they do is sort out applicants that are not to be hired. Criteria varies from:
    -not having enough buzzwords in application
    -unemployed (if you’re not working then there must be something wrong with you…..)
    -anything that picks their fancy (its their job to weed out applicants so weed them out they do)

    Recruiting from big companies is a risk, the ones who climb the corporate ladder are good at climbing the corporate ladder but there is no guarantee that they have many other skills.

    Oh, and the article by her might as well have been a paid ad for Linkedin ;-)

    1. Clive

      Yes indeed. And anyone who uses LinkedIn for any sensible purpose deserves to go bankrupt. It even suggested to me that I become Lambert’s friend (or whatever gibberish phraseology it uses). The very idea…

      Here’s my own LinkedIn story which corroborates your notion, at least in part. My LinkedIn profile is in Japanese, an intentional move on my part to avoid being spammed by recruiters. The only reason I set up a profile was to have a community of translators be able to get in touch with me. So my profile is completely unintelligible to 99.9% of people which is exactly what I wanted. I, like so much of our society, am only interested in a specific 0.1%.

      The one field which is in English is my employer.

      Guess which recruitment spam I get sent ? Yep, companies in the same line of business as my employer. About positions which are nothing whatsoever to do with my LinkedIn profile…

      1. proximity1

        ;^)

        Welcome to the dismal techno-present and future: machines which can’t exercise judgment, run or reliedup on by people who have none.

    2. proximity1

      And yet, I see people all the time who are employed at large companies, but who, by their outward appearance, are anything but fitting the “dressed for success” profile. Granted, these people are not in any sort of management position and they are not working for the top consulting or financial firms, but they are employed. Consider what I’ll describe as the “Abby Sciuto” phenomenon (See : https://en.wikipedia.org/wiki/Abby_Sciuto ) –that is, an individual who is at once highly eccentric in appearance and behavior and also exceptionally smart, skilled and competent in work. She wouldn’t, for example, have appeared at her first professional job interview–where she’d have had no shining work-history to offer–without those tattoos and she might not even have shown up without the distinctive dress, either. What’s an (unimaginative) employer to do?

    3. Dave

      @Jesper, yes, it’s amazing how much executives are attracted to people who, like themselves, are good at making positions for themselves, but may be poor at accomplishing the work of the business. So they hire rock stars and gamechangers and disruptors and self-starters and leaders. Eventually they discern that someone needs to actually produce something, but it may be too late by several years.

  4. CB

    1) In some jobs, you have to be current, or nearly, and maybe her first interviewees weren’t.

    2) Some unemployed scattershot their resumes and apply to many job listings they’re not remotely qualified for. Screening is what headhunters are for.

    3) Some employers aren’t expert in the particulars of the jobs they need filled and write inappropriate, even nonsensical, job descriptions. A mgr I worked for did that and got a raft of unqualified applicants. After I wrote the ad, we were knee deep in entirely qualified applicants, bc I wrote an ad that only qualified applicants could understand. Maybe the CEO needs to poach among already high competence employeds bc she isn’t expert in the particulars of the jobs she needs filled and can’t write a proper job description: if you hunt among the already employed and high functioning, of course you’ll find competent employees.

    4) Most of the long term unemployed I know of, including myself, are dumbing down our applications for part time sales associate type jobs, supermarket cashiers, etc. I describe myself as retired and the jobs I’m applying for aren’t high skill.

    5) Of course there’s a cascade effect. I’ve raised the cascade issue before and this is the first I’ve seen any notice of it, but it’s been a problem since the crash. The effect is pernicious.

    1. Ed

      I think a career development book teaching someone with alot of education and/ or a professional or managerial work history how to get a job such as a sales associate, supermarket cashier, etc. would sell very well. I’m completely serious. During my spells of unemployment, I would have gladly taken one of these jobs, and they have their points over the highly politicized (and increasingly low pay) “higher jobs” today, but of course ran into the overqualified problem.

  5. Moneta

    There is a lack of imagination in general in our system. Most of the imagined best are only the imagined best because they fill a set of desired qualifications. Right now, it’s all about preserving the status quo. I’ve had to interview people and it’s tough. I know darn well that interview are USELESS. The best way is to know a person’s strengths and weaknesses and that happens over time. And even then it’s a crapshoot on how they will bond with other colleagues. Also, one has to really understand people and most people are bad at this since most are focused on number 1.

    IMO, the biggest assets that I have met are what I would call diamonds in the rough but if they aren’t polished, generally they get discarded… only the true best will choose them… but the true best are rare!

    So the problem is that the worker population in general, which is average, is shooting itself in the foot by looking for the best but not really being able to spot the best. So we get everyone doing the same thing.

  6. Steve

    Great if loyalty or a long term relationship is not a requirement. A person who is easily poached by you will be just as easily poached from you.

  7. jonboinAR

    Back in the early ’80’s, I remember, my dad, an engineer, was looking for a job. In the middle of his search he told me that all of the employers were trying to poach from other companies workers who already had the precise qualifications they needed to have in order to hit the ground running. Most of these discussions I see about current hiring tactics imply that something has changed in the past few years or generation or something, but has it, actually? I don’t know. I’m just asking.

    1. Clive

      Can’t speak for the US, but here in England (which I don’t think is radically different) it does seem exactly the same. My Dad (who’s in his early 70’s for cryin’ out loud) gets pestered by agencies and offered contract work (no-one wants to extend any commitment beyond a rolling monthly renewal option, oh no) in, as you mention, a very specific skill set. He’s qualified and certificated to work with high voltage power lines (11Kv+ typically in England). You can’t just pick up a spanner and have a go when dealing with those sorts of voltages, you’re a danger to yourself (bad enough) and others (which means lawsuits if things go wrong). So you need (in this country) a valid HV certificate to be allowed to work on such restricted sites.

      Obviously, getting the certification requires skills and a fair amount of real-world experience too. This takes time to acquire. No-one in construction wants to train people to get those skills. Unfortunately, the people who have them are, quite literally, dying out. It’s not even that on-the-job training opportunities are limited to non-existent; a degree in electrical engineering helps, but why study that when getting into the FIRE sector is where the money is ?

      So we do have a lot of MBAs. But if you want to build out a new 11Kv/400v ring of substations, for, say a new housing tract, well, you’ll struggle to find anyone who can implement it on the ground. And the even older chap who lives across the road form my mother in law and worked in the national telecoms company got phoned up, 10+ years into retirement and asked if he wanted to get a contract with them. Having been early-retired by them (when they outsourced anything that wasn’t nailed down) he told them where to go, but seemingly they are now finding out the hard way that you can’t just drag in off the street anyone with a pulse and expect them to figure out how infrastructure dating back to the war actually hangs together… All anecdotal of course, but I really aren’t convinced these are isolated incidents.

  8. GlassHammer

    Everyone wants to find the ideal employee, no one wants to build one anymore. (I don’t know if it is funny or sad that we don’t even build skill sets in the U.S. anymore.)

  9. Banger

    There are good reasons other than lack of imagination why businesses poach employees from MS and Google and that is that the difference between a great programmer/analyst and a mediocre one is like the difference between an average college basketball player and an NBA starter. IT projects can get incredibly fouled up if you don’t have very clear thinking people on board. Those kinds of skills can’t really be taught in a cost-effective way. BTW, they can be taught and ought to be taught at the university or trade school level but, usually, there are no teachers who possess those skills. This has something but not much to do with heuristics (though most IT people are weak there) but with confidence and clear-thinking.

    In my experience HR people are usually not very good and know relatively little about IT and I’m not sure why that is. You’d think that companies would sink a lot of resources in that department but they won’t so, instead, the trend has been to use recruiters who are often even worse that the original HR departments. They are usually staffed by 20 somethings who cannot read a resume–they only do keyword searches. Their jobs are to talk talk talk, email, email, email and then talk some more–they generally get paid, it seems, based on the numbers of bodies they deliver to potential employers–that may have changed since I last looked for work a few years ago. Now employers and recruiters have resorted to online tests and evaluations–that’s useful for low and mid-level work, maybe, but weeks out the inexperienced but talented. I personally would only give problem-solving tests that had little to do with IT–languages can be learned pretty quickly. I remember picking up one by just landing in a temporary job (they just needed a body to land on that job hoping for a miracle) knowing very little about this language so I just spent the first couple of weeks on the internet gradually picking up the techniques I needed to accomplish a rather complicated app which I did because I have good problem-solving skills.

    1. GlassHammer

      “There are good reasons other than lack of imagination why businesses poach employees from MS and Google and that is that the difference between a great programmer/analyst and a mediocre one is like the difference between an average college basketball player and an NBA starter.”

      To be fair, not every IT project requires a great programmer/analyst. There is plenty of work to be done by the average and inexperienced.

      And as you know, it is quite difficult to setup a team big enough to do the job when your employer stalls hiring by demanding nothing less than the absolute best and reduces the existing staff by constantly thinning the bottom and the middle of the talent pool. I can’t tell you how often my co-workers and I look around and say “We really need additional bodies.” At this point my team members would welcome someone with below average talent as long as they were willing learn/improve. Our experienced workers have gotten so bogged down by tasks well below their skill level that project quality is falling rapidly.

  10. Jesper

    I came across the documentary discussed here:
    http://www.usnews.com/news/articles/2012/07/09/hbo-doc-takes-a-hard-look-at-the-long-term-unemployment-crisis

    There is a phone-interview in the documentary which might explain a lot. The applicant was asked about willingness to work:
    Unpaid overtime? No problem.
    Always on call? No problem.
    Salary expectation? Desperate for work

    Anyone in work where there is extra work that needs to be done can choose between:
    -volunteering to do it for free (avoid getting fired and maybe increase chance for promotion)
    -recommending a friend to be hired (a potential competitor comes into play)

    The current work-climate leads to some people being worked to death while some others are completely without a job. Congratulations, the winner takes it all. But of the two, who is the winner?

    At least the company makes a profit & that is what it is all about, isn’t it?

  11. Everyday Freethought

    I think part of the problem is that a lot of companies have a too-high opinion of themselves. She said, “We only have room for A-plus players”. Every startup thinks it is the most important company that ever existed, yet when they flame out nobody remembers them.

    1. GlassHammer

      She said, “We only have room for A-plus players”.

      The leaders of new startups have a very warped understanding of how their industry began.
      Like PaulArt said, many of the current leaders in tech started with little to no background in their field.
      I believe much of this warped understanding comes from the business school nonsense they are exposed to (Particularly stories based on survivorship bias and ones that leave out earlier days of the industry).

      1. sgt_doom

        I believe GlassHammer states the situation exactly!
        These entrepreneurs are really the typical mindless Ameriexecs whose talent lies principally in offshoring jobs, importing foreign visa scab workers, or creating junk paper.

    2. washunate

      That is my favorite line from the whole article. Just classic in its mathematical hubris and unintentional humor.

    3. sd

      If she’s an A-list player, then why doesn’t she have funding? Because she’s not A-list. She’s C-list deluding herself and everyone around her of her own self-importance.
      A-list pick up the phone and have funding at the end of an afternoon. That’s A-list.

  12. PaulArt

    There is no hiring and no job growth because there is very little innovation anywhere. Corporations have lost purpose. Contrast this to the 90s boom in Internet, Cellular, GPS, Networking. There was a bloody pressing urgency and the Fat Cats knew how much money was there to be made through these technologies and so people hired warm bodies and trained them. I know this because I along with a bunch of my class mates graduated in 1993 and went to Silicon Valley. I can count on the fingers of my hands the number of them who actually studied anything in our Master’s Engineering degree they directly used in their jobs. The chap who went to Borland knew little about compilers. The chaps who knew next to nothing about databases went to work for Sybase and Oracle and they are now senior Managers there. The chaps who knew a smattering of the first few chapters of the seminal text book TCP/IP Illustrated (Richard Stevens) got hired by Cisco (in 1993 it was a medium sized company). All of us learnt our trades courtesy of our seniors at work. Brilliant, patient and persevering people who found time to train us and share their knowledge with us.
    The most awesome story in our batch was this one guy who knew zero about cellular communication but was picked up by a start-up that was working in CDPD (rival to CDMA) staffed with guys from MIT and Stanford who trained him in testing Cellular infrastructure. Today he owns his own cellular infrastructure maintenance company.
    The technology age needs retooling to tackle global warming and also to figure out how we can move away from this consumption driven economy. We need to come up with sustainable ways to sustain the population of the world without a consumption economy and without capitalism. I don’ t think the Fat Cats will ever allow that. We had a brief blip 1945-77 when they were all muzzled and caged until idiots like Jimmy Carter came along.

    1. redleg

      Your comment brings to mind the NC post about MBA-ing of everything leading to crapification.
      Innovation is generally outside of the focus area of a company, is unbillable, and distracts time and resources from the tried-and-true cash cows (even if they are now in minature) of the business sector. This is rampant in the engineering consulting business I’m currently encumbered with today. “Tailor the work to the price” is the motto, and it means “do sub- or barely- standard work since we (mgmt.) decided to underbid the project”.

      Corporations have a purpose – make money for the shareholders NOW while distributing as much risk as possible anywhere else. Innovation is a risk.

      1. Moneta

        Well all those retirees need high guaranteed returns… it’s not the time for innovation but for exploiting those cash cows, burning the furniture to heat the house, squeeze the lemon until it’s dry, etc.

        We all want high returns with no risks. So we are reaping what we sowed.

  13. Ishmael

    If you fall off of the boat do not expect to get back on. That is the modern Amerika.

    I sometimes am hired on an hourly basis to find employees for companies. The difference is (1) I totally understand the area I recruit for and understand people’s background in that area (unlike HR) and (2) I will talk to the unemployed. For one company I filled three positions (CAO and Director of Internal Audit were two of them) before outside recruiters got a foot in the door.

    Modern companies do not want to look at your accomplishments they just want to see that you are working for a Fortune 500 company even though it is a shit position.

    It should be noted this contributes to the fraud in Amerika. No one in Finance and Accounting wants to say no or blow the whistle because they would lose their job and not find another.

    As they said in Apocalypse Now – Don’t get off the boat! Don’t get off the boat!

    1. roadrider

      As they said in Apocalypse Now – Don’t get off the boat! Don’t get off the boat!

      That’s not of much use to those of us who have been thrown off the boat …

  14. washunate

    “… 77% of the approximately 100 human resources executives polled said their companies were having difficulty filling open positions due to a shortage of available talent…”

    I agree that can sound peculiar. But it’s like fortune cookies. You have to add the magic phrase at the end: due to a shortage of available talent at the wages and working conditions being offered.

    Whenever I hear someone talk about talent or skills or whatever, I chuckle. They are either ignorant of how funny they are being, or they actually do know what they’re saying, and they say it anyway. If employers actually faced a skills gap, they would train people.

    1. Pelham

      To reinforce your point: A local electronics company was recently looking for people with high-end math skills. The starting pay? About $1 an hour above minimum wage.

      1. jonboinAR

        All this has happened because we allowed them to put the American worker into direct competition, with very few caveats, with a 6 billion-member labor pool – bottom line. We (American workers), by our very inattention, have allowed ourselves to be you-know-what’ed, and now we have been.

        1. Carol Joy

          And why did we allow this to happen? Why, I believe it is because so many people felt themselves superior to other Americans. I was out in Silicon Valley in the early Nineteen eighties, a great time to be there. But the IT crowd really got to think of itself as very special. So when the textile union workers in the South and Southeast had their jobs shifted over to Bangladesh, the IT crowd was all, “What did they expect? If they had gone to school and gotten a degree in computer science like I did, they would have a job now.” The same comments came from the IT crowd when the auto workers had their jobs go overeas. Exact same response. (And not one IT person I knew ever mentioned how well rounded some auto plant workers were – they could run computer diagnostic’s, handle machinery, repair machinery, and then spend the weekend polishing their golf game.) Then in the nineties, all of a sudden programming and computer customer service jobs were going overseas, and suddenly it was all “What a tragedy pour mo! How could this ever happen?” If people in the US had stuck together none of this out sourcing would have happened, or at least a significant fight would have occurred over the issue, but people here like their little clique’s “exceptionalism” until they find out that in today’s big bad world, nobody is all that special.

  15. Pelham

    One wonders whether the currently employed workers that companies are poaching from one another would measure up if they were required to jump through all the silly hoops required of the unemployed — submitting resumes, answering written questions and suffering through interviews.

    My experience with currently employed tech specialists suggests that they’re every bit as moronic and language- and deadline-challenged as the most miserably unemployed. For instance, I’ve yet to encounter one techie among the many I’ve known who can write a decent sentence with an identifiable subject-verb structure. Spelling, of course, is atrocious. And often the content of what they write and say — if it can be deciphered — raises serious questions about their fundamental ability to reason and function.

    Separately, three out of four brand spanking new American college grads with tech and science majors can’t find jobs in their chosen fields — even as we’re constantly told there’s a severe shortage of such workers. Keep in mind that these grads are highly trained job candidates as yet untainted by any record of unemployment. So what’s up with this?

    Something doesn’t smell right.

    1. washunate

      Yeah, it’s one of the real disconnects. What I wonder is why so many educated liberals have been okay with the smell for so long.

  16. ep3

    another thing is this also removes from the employer’s burden the cost of job training. back in the blue collar days of america, the employer hired a candidate and then invested in training the employee to do the job. Now, employers like the lady mentioned in the article hire already qualified persons who integrate into a position they are already familiar with. An unemployed person, or a person moving from blue collar to white collar, may have some experience (or just graduated from college), but cannot slide into a position without training and learning the job, which could be up to 6 months of integration.

  17. Jay

    The inability to hire and train enough employees at the right price in this labor market, is a failure of management. For employees, setting a task, making a deadline, and seeing a project through takes time and on-the-job training. But this is also true for management. Creating a startup is not easy. But we can see that the person referred to above did not accomplish the task of successfully creating a startup, and took too long doing it. Should it be any surprise that their inexperience and extreme conventionality would also manifest in their inability to identify likely prospects? It’s possible with this labor pool to turn sows’ ears into silk purses, but if you don’t know how, you complain about the lack of qualified candidates instead, because when it comes to management, it’s always someone else’s fault.

  18. Enquiring Mind

    The party is winding down. America’s growth binge and economic predominance are now subject to mean reversion. That was accelerated by the ill-advised gifts to China via outsourcing, trade deals and abetting in IP theft, where the patrimony of America was effectively valued negatively. Future generations will pay for many such short-sighted, reactive policies.

    1. jonboinAR

      Agree completely. The ones who masterminded globalization seem to be making out OK though. I just wish I weren’t part of the generation of American middle/working class that snoozed and allowed it to happen.

  19. Jeff Bailey

    Extrapolating from the labor market for computer programmers to say something about the overall unemployment situation! Let’s all get out and visit with other kinds of people a bit more often, shall we?

  20. roadrider

    Well this comes as no shock to those of us who have had the misfortune to lose our jobs in this ongoing depression (sorry economics types, to us non-academics this is and ongoing depression). I have good skills (software development) and a strong work history (prior to the past 13+ months of course) and I can’t even get to first base. And this just didn’t start recently. Even after 3-4 months of unemployment I was having the experience of interview processes not going beyond the initial phone screen once people found out I was unemployed. Now I’m not even getting the phone screens.

    The funny thing is that back in the late nineties tech boom companies were falling all over themselves to hire anyone with even rudimentary programming skills (and of course making the same complaints about not being able to find people). Now, 15 years later I have far more experience and a far deeper skill set and yet I’m sure the companies that have rejected me without as much as a second glance are still whining about the “skills gap”.

    My apologies (sarcasm) to the employers – I’ve never worked for Google or Microsoft. Google didn’t even exist when I started my career! And my further apologies (further sarcasm) for not having 5 years of experience in areas that are barely 5 years old and that were not relevant to any job I’ve ever held but that, given my skill set and background, I could easily come up to speed on in a short period of time.

    In a case where there was such a market distortion affecting the wealthy, politically-connected classes government would be jumping through hoops to shower them with taxpayer-funded largesse and exemptions from regulations. But for labor – fugheddaboutit! Obama and the Democrats are just as committed to their Reaganesque, trickle-down economic policies as the right wing is their anti-labor extremism. Expecting help from either one is delusional.

    I don’t know the solution, either for my own situation or for the country. But something has to give and soon because people’s lives are being destroyed and their talents and potential contributions to society are being needlessly discarded by the intellectually bankrupt thinking and outright bigotry of the employer class.

  21. ambrit

    Friends;
    Somehow, the lady’s problem doesn’t elicit much empathy from me. This post focuses on what I would consider the high end of the labour market. What about the mid and low tiers of the work world? When I suffered through the Lowes Experience, I was surrounded by older bitter enders, trying to hang on till retirement, or underemployed college students. Many of these college kids were degree holders unable to get work in their fields. I’m talking Chemistry Majors, Particle Physics Majors, and a whole slew of Business Majors. All struggling along at ten to fifteen dollars an hour. Several people working there were ex-military or reserve military. All, without exception, marveled at how badly run the corporation was. One remarked to me, “If we fought a war with Home Depot, I’m not sure what the outcome would be. If we fought one with the Girl Scouts, they’d be running this place in weeks.”
    The big tragedy here is that, once upon a time, if the private sector couldn’t or wouldn’t supply jobs for everyone, the government would. That was considered one of the Governments responsibilities. Now that the Government is viewed as a subset of Business, business rules prevail. Now, when business can’t or won’t supply jobs, the government wrings its hands and pleads inability.
    What a bunch of maroons.

  22. Matthew G. Saroff

    Clearly, the answer is to post inaccurate information on Linkedin and similar sites.

    Say, for example, that you are currently employed, as opposed to out of work. If anyone asks, just say that you neglected to update your status in a timely manner.

    Remember, you are not submitting false information to an employer, you are posting a story on a random website, and you can bring your CV to the interview.

    You are not lying to the employer, your profile is between you and LinkedIn.

    FWIW, I think that I once got a job that way: I had been out of work for over a year, and the job shop put me in for an interview. They had reformatted my resume to drop out things like my contact information, and it was on the manager’s desk.

    My upside down reading skills are decent, and it appears that they added a year to my end date, taking my unemployed time from 14 to 2 months.

    The manager never asked to confirm any of the information, and I did not see fit to correct him. It was between him and the placement agency.

  23. st33ve

    Um, I hate to state the obvious, but if open Job A (at X company) gets filled by poaching the person currently doing the similar Job B (at Y Company), that doesn’t reduce the number of job vacancies available to the unemployed. Job B has simply replaced Job A as an available job.

    Am I missing something?

    1. Binky Bear

      Nope, those tasks get portioned out to other people in the company until somebody dies or collapses in their cubicle, then a task force assesses the situation and hires two people from other companies, which do the same. At some point a genius decides to hire an H1b or some other indentured servant grateful to be away from the effects of our Foreign Policy.

  24. Alex

    I wonder why the self-important Ms Campbell thinks I care about her problems.

    She’s loaded her company up with debt, which is not very smart.

    And it’s social media? Oh boy, more vapor ware.

    And she’ll cash out and leave others holding the bag.

    Band manager? Pfui!

  25. Ishmael

    One thing I wish to point out is recruiting is just a side line and not my real business. Having held senior finance and accounting positions (including several CFO positions right into 2000 when I could not watch the CEO burn through all the money I had raised after I had basically being the restructuring officer returning the company to profitability – and I did not lay off one person- and quit thinking no sweat I have great unblemished credentials) I understand the total job search thing first hand. Luckily, I have been on most days able to make a good living because I can do a lot what company staff can not do. Does that get me a full time job nope. The one exception is what I called the Groucho Marx jobs. Usually, I do not want to take a job with someone who wants to hire me because (1) near bankruptcy, (2) no morals or ethics, (3) want to pay me peon wages while working me 80 hours a week and (4) the CEO gets mad during the interview when I ask him/her what his strategy is to change the direction of the company after years of losses. In 15 years of looking I have rarely been interviewed for a job I would be interested in and I am not that terribly picky.

    Let me point out a couple of things. The CEO makes it sound so tiring to go through a bunch of resumes. I can go through 100 resumes in about an hour. If you know what you are looking for it does not take long to separate the wheat from the chaff. Lots of people apply for anything. Into the garbage can. Now I am down to 50. Pretty soon I am down to 5 or 10. A few phone calls and I have what I am looking for.

    I wish to point out that this CEO says she is from Australia. Having worked downunder for a major consulting firm I would have to say many of these firms are not the most above board firms in the world. Yves has mentioned several times the situation in New Zealand and I would say Australia is right there with the only places worse being China (yes experience there) and India (experience there also as well as Pakistan). While working in the land of Oz I walked down the hall of the office yelling I can not believe we are associated with such companies. Another manager from Canada said he forgot how bad it was until I got there. Since then I was the CFO for a public company with a CEO from NZ. He was the prior CFO – fraud was rampant through out the company. I exited fairly quickly. Later I served as the expert witness against another NZ CFO for a public company. After my deposition she pleaded guilty to fraud. My point here is you probably do now want to work for this lady anyway and whatever she says I would take with a grain of salt. It is not just a problem of very few jobs out there. The majority of the jobs you do not even want (see above list for reasons why).

    Of course one time (right before MCI blew up) I had a guy who had held a number of VP of HR positions that I should not be so unflexible. I should have told him I do not look good in orange.

  26. MrColdWaterOfRealityMan

    In technical and engineering fields, technologies come and go with remarkable rapidity. Back in the 80s, I was a typesetter on some of the first digital typesetting machines for which I was sent for training. These machines retailed for a $500,000 or so. They existed for just about 5 years before they were obsoleted by PCs and Macintosh computers.

    CEOs, newly minted MBAs and HR departments are remarkable in that they completely miss this, or more accurately, couldn’t care less. They want to push the costs on the the employees.

    And how’s that working out for everyone?

    1. CB

      The software that ran some of those machines was god awful. You needed a PhD in Unnecessary Complexity to get anything out of them. And then there was IBM’s patent department erecting impenetrable thickets around IBM’s technology. Ah, those were the days.

  27. Sneaky Pete

    No one has mentioned ageism yet.

    Using LinkedIn ( where most of the people have pictures posted ) allows the CEO to avoid those tech workers over the age of 40. Recruiters are also usefull in avoiding older candidates as well.

    Many tech companies, especially those seeking VC investments, hew the advice of Mark Zuckerberg – “young people are just smarter”.

  28. MLS

    A friend has connections with a number of small and medium-business CEOs through his work, and two themes he has heard consistently from all of them:

    – for skilled positions such as those requiring an advanced degree (engineering, etc.) one of the big problems in many areas is finding candidates who are qualified to do the job. They just don’t have the background or experience to make them a fit. For those that do have the skills, those individuals turn out in many cases to be foreign students that got their degree here but can’t secure the necessary visas to stay in the country.
    – for positions that don’t require as much education or experience the biggest challenge is finding somebody who can pass the drug test. How true or anecdotal that is I don’t know, but that’s what was said.

    1. roadrider

      @MLS

      Did you bother to read the post? The whole fucking point was that employers whining about not being able to find people were deliberately ignoring a large group of potentially qualified people because they had the misfortune to be unemployed.

      These “themes” you refer to are like a guy in a bar looking to get laid complaining that there are no supermodels in that particular bar who are willing to hop in the sack with him even though he’s an average (at best) looking guy who is not a celebrity and is not rich.

      There are millions of us who have good skills, tons of experience and have demonstrated an ability to learn new skills and adapt to new environments and problem domains but can’t even get to first base with dickheads like your friend’s CEO buddies because they’re over 50 (40?) and or out of work.

      So I call bullshit on your friend and his CEO buddies who are apparently just making lame excuses so they can hire more low-paid indentured servants H1-Bs from some third-world shit hole.

      1. MLS

        Yes I read the post. The point of my comment was to offer two possible explanations as to why small business owners are saying they can’t find qualified candidates – either they can’t keep them in the country or they can’t find ones that can pass a drug test. Are they also ignoring people just because they are unemployed and/or they don’t want to train them? That’s definitely possible, but other reasons may also be coming into play. Just because those reasons don’t fit your preconceived notion that all business owners are evil scum looking to screw over their workers and look down on the unemployed doesn’t mean it’s not true. Read the last sentence of my post again – I offer up that what I was hearing could be anecdotal, meaning I don’t claim that what they said was the sole reason.

        The fact that experienced professionals out of work and in their 50s (40s) have a tough time finding a job is not unique to this receession. Even when times are good that is a common occurrence.

    2. CB

      Skills or willingness to work for low pay? And small benefits, of course.

      If a company really, actually needs a skill set, I’m thinking they’ll find someone. Griping and not hiring suggests there is no need, just attitude. I used to work for a small company whose owner/ops manager described American employees as too expensive. Took money out of his pocket, they did.

  29. ewok

    “Newly Minted MBAs” are not the problem; in fact we are the victims of the problem. I went to an MBA to change my industry (banking). After graduating from a top tier program (FT, Economist), I found doing so to be impossible as HR departments wanted newly minted MBAs that were NOT changing careers. Even some of the management consulting firms pulled that nonsense.

    Most of my classmates had to go back to our old industries, myself included. Two years on, several of my classmates are STILL unemployed; it took me a year and a half for me to get a contract gig after about 50 interviews.

    1. JPT

      Sorry to hear it. I’m not sure when continued education became such a counterproductive scam, but there is almost no getting around the fact anymore. It’s not just limited to MBA programs, either. I was a fairly good and experienced trim carpenter back in 2007. I took the “opportunity” of multiple, successive layoffs to pursue an engineering degree.

      Construction jobs are returning, but the operations are “leaner” now, they only have room for engineers with practical experience. And, of course, my new skills and knowledge soundly over-qualify me for the type of work I was excelling at before the crash. So, I work at a hardware store, and fill out a lot of applications in the evenings.

      …because, efficiency?

      1. jonboinAR

        I was a trim carpenter for quite a few years, mostly on high end homes in Los Angeles. Last job I held in carpentry was about ’03. Nearly every job I got was word of mouth or just show up and start working. I may have filled out an application once, never submitted a resume. It might just be that all of us around there knew each other.

        1. jonboinAR

          If you’re looking for a finish carpentry position in LA, Westside, I can probably hook you up, unless they’re just not building. I don’t live there anymore, but I think I still know guys who work for themselves and hire crews. It helps to have a license so they can hire you as an independent contractor. That’s unfortunately the way they do it a lot.

  30. ewok

    One more fun fact: i was applying to both contract and perm roles, however nearly all my interviews were for perm roles. Several temp staffing agencies refused to deal with me because I was unemployed.

    After I got the contract gig, recruiters of perm roles told me that getting a perm role was impossible. Thankfully I proved them wrong, but WTF?

  31. Ishmael

    Making over 50 year olds a protected class without many of the other requirements of the EEOC just keeps older employees from being hired.

    If you are a company operating in a community and that community is 14% you could be determined to be in violation of the EEOC if your workforce is not 14%. I do not believe the same rules apply to older employees.

    Combine lots of companies have young CEO’s and CFO’s so they do not want a bunch of old farts telling them how to do it in the old days with HR departments who do not want older employees causing their benefits costs to increase with the federal govt making it difficult to fire an older employee without getting sued and what you have is no market for older executives.

    Lots of older employees also hurt themselves. As I type this I am in the middle of a training course. I put in 40 to 80 hours of training a year. Yup, cost money out of my pocket but there is demand for people on an hourly basis who can do things. Keep your skills up to date. Walk like you are going someplace in a hurry. When asked how things are going say Great! Exercise!!!!

    Sorry, I can not change the way the world is. All I can do is attempt to live in it.

    1. roadrider

      If you are a company operating in a community and that community is 14% you could be determined to be in violation of the EEOC if your workforce is not 14%. I do not believe the same rules apply to older employees.

      the federal govt making it difficult to fire an older employee without getting sued and what you have is no market for older executives.

      Two huge steaming piles of delusional horseshit. Are you fucking kidding or what?

      There is no effective legal barrier to selectively firing older employees. And not everyone is an executive so limiting your “analysis” to those pukes is flat out dishonest.

      Firing an older at-will employee without encountering legal consequences is nothing more than an idiot test. As long as no manager explicitly told the employee that hes/she is being let go because of age or repeatedly made negative reference to the employee’s age in front of witnesses willing to testify to the conversation(s) the employer has nothing to fear from the government. Its the easiest thing in the world for an employer to give negative reviews for arbitrary reasons in order to build the case for dismissal against an older employee. This has happened to me as I have rarely received good reviews since I turned 50 whereas before that I rarely received even mildly bad ones. I did notice that the managers and executives got a lot younger though.

      I have never heard about this percentage of the community rule but I can tell you from my own experience if it does exist it has no practical effect. Furthermore I would be willing to bet that employers below a certain size are exempt.

      Lots of older employees also hurt themselves. As I type this I am in the middle of a training course. I put in 40 to 80 hours of training a year.

      is that all? I have routinely put in far more than that and I have been laid off 3 times in the past 8 years. I’m putting in tons more time self-training in the past 13+ months I’ve been out of work and it has not helped at all because I don’t even get a chance to demonstrate it.

      Walk like you are going someplace in a hurry. When asked how things are going say Great! Exercise!!!!

      This is just more worthless, bullshit self-help advice,

      Sorry, I can not change the way the world is. All I can do is attempt to live in it.

      And its dick-headed attitudes like yours that perpetuates the mythology that’s used to discriminate against those who have had the misfortune to lose their jobs.

      Ishmael, huh? Too bad Moby Dick didn’t get you too.

  32. JPT

    The talk of a “skills gap” in Tech-land and other big-money corporate sectors carries with it the stench of desperation. How many absolutely useful and innovative ideas die on the vine because of this obsession with the legendary “risk-free” business venture? How many workers never attain their potential skill because no one wants to take the initial hit of training them up to it.

    Here’s a thought: Maybe an idea that can only thrive under the care of an ideal, “A-Plus” team isn’t actually all that good.

    Maybe, instead of some indispensable component in the engine of capitalism, you’re basically just a private sector Scott Walker: You don’t make jobs or enable innovation so much as you steal them from others, and you’re only contribution is being too self-involved and entitled to see the distinction.

    All of these start-ups demanding and expecting nothing short of exceptional or ideal employees remind me of the Institutional Private Equity investors, all assuming top-quartile returns on their money, because anything less would spell certain disaster. The majority of these folks are in for a rude awakening.

    1. Ishmael

      roadrider says – is that all? I have routinely put in far more than that and I have been laid off 3 times in the past 8 years. I’m putting in tons more time self-training in the past 13+ months I’ve been out of work and it has not helped at all because I don’t even get a chance to demonstrate it.
      ———————————————————————
      I read his response and wonder why he keeps being laid off! Maybe it is his or her attitude.

  33. Fraud Guy

    An additional point of information.
    I work for a large finance corporation, and had the joy of filling a position within the past year. HR no longer does hiring, but there are outsourced internal recruiters who assist in getting applicants for your positions.

    The first choice candidate is internal-if you’ve tagged someone for the position, their work is done. Their preferred method is to cull applicants from your LinkedIn and Facebook profiles, or other media. They then go to specific recruiting boards based on position, university, or other relational criteria to you or the position. The last choice is open job boards, even specialized ones.

    They want you to provide the buzzwords for them to search for a candidate. They use simple screens to keep out candidates that do not have a sufficient number of these words, and pass on those who get past those screens (even if upon reading the resume it is immediately apparent that the person is not qualified). Their phone interviews basically regurgitating the job placement, and they kick up applicants who can’t explain anything they said they did on their resume. And the job of the recruiter ends (i.e., they get paid) once they have submitted 3 “qualified” candidates for your position, even if you don’t like or hire any of them.

    Of course, if the hire doesn’t work out, HR no longer has responsibility; the recruiter can point to your requirements if the hire is flawed; and the upper management threaten to take away the position if you don’t fill it within a very short time frame, so you have to keep relobbying for your new hire.

    However, if you time it right, by the time they flame out, you’ve moved on to a new position and your replacement (or the person who closes down the now unnecessary group) are responsible for dealing with the system.

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