How the Talent Crisis and High Unemployment Co-exist

Talent crisis
How the Talent Crisis and Unemployment Coexist

We continue to hear mixed messages regarding unemployment.  In one month, the Unemployment rate goes down, but it’s because more people gave up and left the market.  Another month it goes down, but not as much as expected.  It’s hard to tell the good news from the bad news.

Yet, a talent crisis

Meanwhile, in my industry, IT Consulting, I get regular contacts from headhunters – who prefer to be called recruiters – saying that they have “immediate openings” for someone like me.  They call my team members with similar frequency and similar offers.

It would be hard to believe except that my firm is in constant recruiting mode.  They talk to us about incentives for referring highly qualified developers, project managers and consultants in general.

How can unemployment be so high at the same time firms are in such dire need of employees?

I took a look recently at some statistics from US Bureau of Labor Statistics  (http://www.bls.gov/news.release/empsit.t14.htm) and it tells a tale of two extremes.  The average unemployment rate for Financial, Information and Education & Health Services industries is approximately 4.8%.  Contrast that with the average for Leisure & Hospitality, Agriculture and Construction at approximately 13%.

Haves and have nots

This is clearly a case of the haves and the have-nots.  People in the former industries categories have jobs.  People in the latter have not. The housing industry has shown some signs of improvement which may help the employment levels in the construction industry.  But that industry will remain tepid until foreclosures reduce the supply of homes in the market.

The difference points out the effect of our transition from a service economy to a knowledge economy.  People who remain in the service industry will continue to compete with the oversupply of fellow job-seekers in a market who’s demand is dwindling.

On the other side of the economy, greater and greater demand for the smaller supply of information workers in information technology, financial services and health care will continue to limit the growth of industries that could provide the steam to get the economic locomotive running at full speed again.

Another factor has influenced a trend towards consulting, which has experienced an increase in demand in the top three industries – financial services, health care and information technology.

A different business world

The internet has changed how the world does business.  Not only does the consumer, armed with more information than he’s ever had, have much more power to make decisions, barriers to entry have been obliterated in many industries.  Want to write a book?  Who needs a publisher?  You can have it published as a Kindle ebook available on Amazon.com within minutes. Want to sell your creations to a world-wide market?  You can have your own micro-site on Etsy, eBay, Amazon and any number of other global sites today.

See my related post: What Are the Benefits of an MBA?

If the world can change that quickly, why should a company make the long-term commitment of hiring full-time employees, when their needs could change in a matter of months, leaving them committed to employees with obsolete skills?  Sure they can downsize them.  But that comes at huge costs – both tangible and intangible.

Why consulting?

Instead, the company can turn to consulting.  Consulting firms can provide short-term staffing for surgical strikes, as well as a full project team for larger efforts.

Need a marketing expert to help solve a problem?  Contract with a consulting firm for an expert for as long as you need her.  They go on their merry way when they’re done.  No severance, to nasty layoff, no morale issues.

Need to bring in a project team to develop a new website?  Have a consulting firm provide the full team of business analysts, designers, developers, testers and a project manager.  When they’re done, you can swap them out for a team to optimize your SEO.

The great recession and the new economy have created a significant change in the way we do business and the way we work. There is a shortage of jobs for people with certain skills.  There’s also a shortage of skilled workers for certain jobs.

It’s not the government’s responsibility.  It’s not industry’s responsibility.  Unemployed workers need to retool to meet the demand of the new economy.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

As always, I welcome your comments and criticisms. 

Related Posts
The Talent Acquisition Game
Prior to the 1982 baseball season, the Philadelphia Phillies traded their shortstop Larry Bowa to the Chicago Cubs for shortstop Ivan DeJesus.  To sweeten the deal, the Phillies threw in ...
READ MORE
When Leaving Your Job Is the Right Option
From the time we start school as a child, our transitions in life are decided for us for many years.  Each year we finish a grade in school, the next ...
READ MORE
5 Job Search Strategies to Differentiate Yourself in the Job Market
As one who has lost his job in each economic downturn that has occurred throughout my career and changed jobs once on my own accord, I’ve been through the painful ...
READ MORE
What Do They Mean By Strong Communication Skills?
Published job descriptions are full of ambiguous skill demands.  Demonstrated leadership skills…Flexible, powerful intellect…Creative and curious…Great team player. Those traits are hard to prove; and hard to disprove unless you were ...
READ MORE
The Proactive Job Search
You’ve probably known people who are in perpetual job-search mode.  As soon as they get a new job, they’re actively looking for their next job.  I’ve known people who don’t ...
READ MORE
That Consultant Eliminated My Job
Ron considered himself pretty lucky.  He had been at his job for nearly twenty years.  The company paid him well.  His family lived in a decent home in a well ...
READ MORE
5 Reasons College Grads Should Consider a Career in Consulting
While the unemployment rate remains high nationally, most college seniors and MBA students are facing the anxiety and fear of graduating into a work world that doesn’t want them.  According to a ...
READ MORE
Should I Join a Large Consulting Firm or a Boutique?
When I was in my last semester of college, I had interviewed with a lot of different companies and it all came down to three offers to decide among.  One ...
READ MORE
Considering Consulting in the Next Step in Your Career
I recently watched “The Sound of Music”, one of my favorite movies.  Never mind that Julie Andrews gave the performance of her life and that Rogers and Hammerstein’s music was ...
READ MORE
The Consultant’s Private Resume
We’re all familiar with the resume.  A document that “must” be (depending on who you ask) one or two pages.  It’s our primary sales and marketing tool for our career.  We list our ...
READ MORE
The Talent Acquisition Game
When Leaving Your Job Is the Right Option
5 Job Search Strategies to Differentiate Yourself in
What Do They Mean By Strong Communication Skills?
The Proactive Job Search
That Consultant Eliminated My Job
5 Reasons College Grads Should Consider a Career
Should I Join a Large Consulting Firm or
Considering Consulting in the Next Step in Your
The Consultant’s Private Resume