By now, most of you have read the news about the record number of job openings the US has as of June 2017. Over 6 million positions are available according the US Department of Labor (USDL).
Yet there are still more than 6.9 million people looking for work.
Yes, the unemployment rate is at historically low levels, but how would this fact help someone that is out of a job?
How could this happen?
The answer is surprisingly simple.
Some of the 6.9 million unemployed are people in-between jobs. On any given day, there are so many people that have lost a job and have yet to find their next position. This is not a major issue because these people will typically find a job soon.
Why is this problem occurring?
The main issue is in the long-term structural mismatch between the skills required by new jobs and those of the unemployed. This is a major problem today, and it is getting worse.
Simply put, people are losing jobs in many traditional declining industries, where the demand for talent is shrinking. For example, automation and the changing consumer needs are causing significant declines in many manufacturing sectors. Per the USDL, manufacturing tops the industries with the most rapidly declining wage and salary employment
At the same time, jobs are being created in new and fast-growing industries where the demand for talent is high and the supply is low. For example, the IT industry has consistently added more jobs than any other sector.
The U.S. Bureau of Labor Statistics has made the prediction that by 2020, the US could generate as many as 4.2 million new jobs in computing and IT.
The problem is that people who lose jobs in the first category are not qualified to apply for the new jobs created in the second. For example, a recent survey by Indeed showed that job seeker interest in software architect job postings meets only 29.4% of the employer demand, and software developer job postings meet only 39.6%.
This is an Unfortunate Trend.
With the exponential up-tick in the adoption of emerging technologies like Green Energy, Artificial Intelligence (AI), Internet of Things (IoT) and Cloud, the supply needs to expand at a significant rate to keep up with the increase in demand.
Unfortunately, even though most people recognize the opportunity, the laws, the educational programs, and hiring practices are not evolving fast enough to keep up with the increase in demand.
As a result, we can expect more shortages. For example, cyber-security, could have more than 1.5 million unfilled positions by 2020. International Data Corporation (IDC) predicts a talent gap for data management and interpretation skill sets to be as much as 1.8 million by 2018.
What should we do?
Government, schools, universities, companies, and non-profits need to do more, and act faster to avoid major employment issues in the future. I will expand on this in my next blog.