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Is There a Skill Gap In Management?

Controversy has sprung up in recent articles and books about whether a skills gap really exists in US business.  A huge 2013 survey by ManPower Group of 38000 employers revealed that 39% of US employers said it is hard to fill open positions.  But HR experts like Peter Cappelli and Paul Krugman have said it isn’t a real problem.  Cappelli says that employers are going about it the wrong way, establishing unrealistic expectations for new hires, and overburdening a slimmed-down staff, so that people leave.  Skills gap proponents argue that today’s workforce is under-educated, that immigration restrictions prevent employers from bringing in qualified people, and that Millennials are unmotivated.

Based on what we see from employers, the truth may be somewhere in the middle. Certainly, when it comes to the management ranks, where we work, companies are struggling to find “A” players for key roles. Whether a skills gap is real or not, better hiring practices can alleviate the situation.

Our observation is that employers make several key errors that contribute to a perceived skills gap in management:

  • They promote people to positions beyond their competency – to their level of incompetency.  Remember the “Peter Principle?” Still applies.
  • They fail at successorship planning and building bench strength – this need is cited by clients in the majority of our engagements.
  • They use a checklist approach to finding candidates who have every conceivable requirement to fill a vacancy (and especially for strategic replacements) to ensure they don’t make a mistake in hiring.

To correct these issues, employers can:

  • Figure out what it takes to actually DO the job, rather than use a basic requirements checklist approach.  By establishing performance objectives for each role, employers can avoid the Peter Principle – they will only promote people who are actually qualified.
  • For basic requirements, distinguish between must-haves and nice-to-haves.  Asking that simple question for each item can dramatically shorten the checklist.  HR will be able to submit more people to you.
  • Hire stronger for every position, not just management.  To build bench strength and fuel successorship, new hires or promotions in middle management have to be capable of making another step up within 2-3 years.

Another reality that will influence the skills gap issue over the next few years is simple demographics:  The baby boomer generation is actually retiring (after remaining longer than expected in the workforce), and the next generation is 20-30 million people smaller.  People who are really effective managers, and who have a longer runway, will be harder to find.  This is especially true in the Aerospace & Defense sector, where a large amount of hiring happened 20-30 years ago, and those folks are now ready to retire.

There is no question that companies are struggling to fill important positions, and are likely to continue to do so, as the number of available people qualified to do management shrinks.  Companies will have to employ more creative ways to bring in people who can step up, and, they will also have to instill the same discipline in hiring that they apply to other internal processes.