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Here's Why You're Not Hiring

Openings increase, but hiring slows; no wonder the job market is a mess.
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Job openings are up--but hiring rates are down, and unemployment is flat.

If this set of data confuses you, you're not alone: The conflicting labor market trends have left experts in disagreement about the current and future state of the American workforce.

No wonder it's been so hard to fix the U.S. job market.

The Department of Labor announced on Tuesday that there were 3.64 million job openings in the U.S. at the end of May, an increase of nearly 200,000 jobs from April. But those openings haven't actually turned into new jobs: Last week's Labor Department report found that hiring increases for June were actually below economists' expectations.

Vicious Cycle

Some analysts point to a vicious cycle: The economy's uneven recovery has itself factored into companies' reluctance to hire, with employers hesitant to increase overhead by way of adding to payrolls.

"Firms are hiring a lot slower because firms are a bit more risk averse than they were a year or three years ago," says Eric Tinch, COO at career development firm Careers in Transition, of Tucker, Georgia. "Because of that, you'll put a job posting out there, and you'll take your time."

Technology has also, paradoxically, made the hiring process more inefficient, Tinch argues. "Because there's so much out there, it's hard to get to the quality picks," Tinch says. "It's getting a little bit tougher to sift through the pool of applicants."

Market Mismatch

Others suggest that the gap between job availability and employers' willingness to hire indicates a discrepancy between what workers want and what companies are offering.

John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, said that many of his clients have been unwilling to accept positions in which they would be "underemployed."

"There may just be a wage gap," he says. "Companies may not just feel pressure to raise their wages. We've seen candidates not interested in jobs at some of the levels companies are offering jobs at."

Missing Skills

A skills gap is also playing a part, says Jack Plunkett, CEO and founder of Houston industrial research firm Plunkett Research: "There is a significant, well-recognized disconnect between the types of jobs that are available and the skills of the workforce."

Plunkett places part of the blame on a shift in the U.S. educational system. "Over a long period of time we've evolved into an education system where getting a college degree is a great idea and a launch into a successful and well-paid career," Plunkett says. "That's not necessarily the case.

"Today, we see the connotation of being in the trades--a plumber, an electrician--means that you're lower class," he adds. "The fact is, a plumber or electrician can make a whole lot of money, whereas someone with a degree in psychology or business from a blue ribbon university may not be able to get a job."

IMAGE: Photo via Flickr userSenator Chris Coons
Last updated: Jul 11, 2012

JOHN MCDERMOTT | Staff Writer

John McDermott is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com.




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