Unemployment: Don't Blame Small Business
A recent book by Wharton professor Peter Cappelli argues that companies and employers are the ones to blame for the difficulty they encounter finding qualified workers.
Earlier this year, Inc. interviewed Cappelli about Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It. He says that rather than stiffening their requirements and filtering out candidates, companies should be implementing training programs to bring in "talented" workers who can then learn on the job.
It may sound like a reasonable enough concept, but Cappelli fails to consider another side of the story. I work with small business owners on a daily basis, so I know that there are three major issues with Cappelli's thesis:
1. The cost of building a training program is too expensive for many small businesses.
2. In addition to a decline in development programs, there has been a decline in loyalty to employers.
3. Demand is not strong enough to justify hiring people that don't already have the skills for a position.
We can try to point the finger at entrepreneurs and small business owners and say they're not doing their part, but we'd be blaming the wrong people. It's easy to suggest companies ought to do more training, but it's the small business owners who take the risks and put their money on the line every day.
It's simply not efficient for a small company to bet precious dollars on training employees who may leave for a competitor in short order. If I'm hiring 1,000 people for a large corporation, I might be able to make a training program efficient, but if I'm hiring two, it's a different story.
At SurePayroll, we have extensive training for our customer service and sales staff, many of whom didn't have previous experience, but when we were smaller we couldn't afford that luxury.
Finally, it all comes back to demand. In a recent SurePayroll Small Business Scorecard survey, we found that 50% of small businesses are growing revenue, but their productivity is outpacing growth. They're not in dire need of hiring new people, and when they do, they have an abundance of options. According to the most recent U.S. Labor Department report, there are more job seekers for each new job opening by a ratio of nearly 3:1.
In many cases, if I'm hiring a sales rep, I'd rather have no one in a territory than someone who doesn't know what she's doing. Most small business owners don't have the time or the money to do extensive training, and really they shouldn't have to; the pool of applicants is considerably larger than it was prior to the recession and they can pick and choose the best people.
It's one thing to grow and nurture people who are already a part of your team, because you know what you have. But live a day in the life of the small business owner. They will tell you that the environment is too competitive right now, the pressure to win too intense, and with limited positions available, they can't give away at-bats to inexperienced hitters.
MICHAEL ALTER | Columnist | President of SurePayroll
Michael Alter is president of SurePayroll, America?s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.