There is a secret surge of white collar unemployment happening—and here’s how companies can stop it

There’s plenty of talent out there.
There’s plenty of talent out there.
Image: Reuters/Robert Galbraith
We may earn a commission from links on this page.

There is a specter haunting the corporate world. It is the specter of widespread white-collar unemployment, driven by disruptive technology.

The International Labour Organization (ILO) projects that more than 200 million people worldwide will be unemployed in 2017, and not just in developing countries. Long-term unemployment in the US and Europe remains “stubbornly high” compared to pre-financial-crisis levels, the report notes; in Europe, it’s even climbing. Many of these long-term unemployed are older workers whose skills may have grown out of date. Studies show that while older workers have a lower overall unemployment rate, those that do become unemployed take much longer to find new jobs—a signal that there’s something structural keeping them out of the workforce.

I think of these alarming trends and stats every time that I hear an employer complain about the “skills gap” that’s currently plaguing international tech hiring. In a 2016 survey of 42,000 global employers by ManpowerGroup, 40% reported difficulty finding workers with the right skills to fill open positions, the highest level since 2007. There are plenty of workers out there capable of learning scarce and desirable skills—some I know and many I have read about. What there isn’t is a good system for training them.

Many commentators like to blame the skills gap on colleges, saying that they aren’t turning out graduates with tech skills relevant in today’s economy. But research shows that tech skills learned in college only remain relevant for five years after graduation. Unless we want to send workers back to school every five years to retrain, we have to admit that colleges aren’t the problem. Corporations—or more specifically, their lack of training programs and patience—are.

In the old IBM lifelong employment model of corporate training, managers plotted their employees’ career paths decades in advance, and lavished time and money on training them for jobs that might not be open for years. In today’s highly mobile employment markets, where workers only spend a few years at each company, there’s no going back to this system. But there is a middle ground between it and the chaotic lay-off-and-hire strategy employed by most corporations today.

It involves training internal candidates for new positions as they become available, diverting resources that would have been used for recruitment to training instead. As Wharton business school professor Peter Cappelli has noted, if recruiting the perfect candidate is going to take a lot of time and money, there’s no reason not to spend that on training an “otherwise good candidate” instead. “If you [the employer] have no idea what each of those options costs,” Cappelli writes, “you are probably paying more attention to purchasing office supplies than to your workforce.”

Amazon’s recently announced program to retrain US armed forces veterans in cloud computing skills is a step in the right direction. But to truly tackle the problem, companies are going to have to take on more, and do so with or without government help. (The Amazon program is a partnership with the US Department of Labor.) Our society needs to move past the archaic belief that learning stops after graduate school or college, and accept that periodic retraining will be a part of a professional career path well into middle age. Lifelong learning must become a core value of organizations. As Socrates once said, “Education is the kindling of a flame, not the filling of a vessel.”

This may sound like a tall order, but it is possible. At a time when corporate profits are at an all-time high, taking a longer term view to developing an organization’s greatest asset—its people—shouldn’t be a huge ask. Especially when doing so would not only close the skills gap, but also ameliorate a chronic unemployment problem that is causing unrest around the globe. It’s easy to forget, in all the capitalist rhetoric about free markets and bottom lines, that ultimately corporations have a stake in the stability of society.

In a recent op-ed, the Dalai Lama asks why, despite our relative prosperity, the rich world was filled with so much anger and discontentment today. His answer: equipped with skills the market doesn’t want, and faced with the further slimming of their job prospects due to automation, many long-term unemployed people no longer feel needed in their societies. “Feeling superfluous is a blow to the human spirit,” the Lama writes. “It leads to social isolation and emotional pain, and creates the conditions for negative emotions to take root.”

Corporations have some responsibility for creating these “negative emotions.” It’s time for them to take a part in soothing them down.