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Minnesota’s hiring difficulties are due to more than lack of skills

A new report found that some Minnesota employers are having a difficult time filling job vacancies, but the reasons vary and cannot be pinned solely on a shortage of qualified applicants.

Key obstacles to hiring in Minnesota include unattractive characteristics of the employer or job itself, such as wages offered, work hours, and location.
REUTERS/Erik de Castro

While Minnesota employers in certain industries have been struggling to fill vacant positions, their hiring difficulties can be attributed to more than simply a lack of skilled workers.

That’s according to a new report by the Minnesota Department of Employment and Economic Development (DEED). The study is not representative of the overall Minnesota labor market; rather, DEED cherry-picked certain industries that had demonstrated a difficulty in hiring and explored why employers are struggling to fill jobs.

The study looked at the nursing industry, including registered nurses, nurse practitioners, and nurse anesthetists; engineering, including industrial engineers and technicians and materials engineers; and select production occupations, including operators of computer-controlled machines, numerical tool and process control programmers, and machinists. Within those industries, DEED interviewed 213 employers that collectively accounted for more than 1,500 job vacancies.

A key takeaway from the study: Employers most frequently said that hiring difficulties are due to a combination of supply-side issues (inability to find a match based on applicants’ skills) and demand-side problems (unattractive characteristics of the employer or job itself, such as wages offered, work hours, and location). In fact, employers said that only 33 percent of the vacancies they have difficulty filling are due solely to a lack of adequate candidates. The majority, or 54 percent, of difficult-to-fill vacancies were attributed to a mix of supply and demand issues, while the remaining 13 percent were due only to unappealing characteristics of the company or position.

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While discussing the study’s findings during a Thursday conference call, Oriane Casale, assistant director of DEED’s Labor Market Information Office, said that there is no one-size-fits-all solution to addressing hiring difficulties across industries, and while the answer must combine efforts on the sides of both educators and employers, simply expanding education options may not be the answer. That’s because employers in the study often cited a lack of experience rather than lack of education as a sticking point in the hiring process. This indicates that employers should take steps to offer more opportunities for hands-on experience in the form of internships, apprenticeships, or on-the-job training, Casale said.

Interestingly, surveyed employers said they were having the most difficult time filling jobs that require only a high school diploma. This can be explained in part because some employers are unable to find high school graduates with appropriate skills, as machine shop classes are becoming less common and fewer young people are being steered toward manufacturing careers due a poor image of blue collar jobs, Casale said. But employers said they are having trouble hiring for jobs across the board with respect to necessary education and experience.

The study also found that hiring difficulties are more prevalent in Greater Minnesota than in the Twin Cities.

Of the three studied occupational groups—nursing, engineering, and production jobs—employers in the production field said the greatest percentage of their vacancies are difficult to fill, followed by engineering and nursing.

DEED said the nursing industry reported the least difficulty due largely to the success of the state’s post-secondary educational institutions efforts in responding to a well-documented nursing shortage.

Twin Cities BusinessDEED Labor Market Information Office Director Steve Hine said during Thursday’s conference call that Minnesota’s hiring issue is a complicated one.

“This is a multi-dimensional problem that we need to address in numerous different ways, and a correction will require changes” not only in the approach by educators and employers, but also in terms of information proliferation, Hine said. For example, if an employer is having difficulty filling a position due to the fact that it is not offering competitive wages, but said employer is unaware of what constitutes a competitive wage, supplying that information will play a role in addressing the issue.

Also, employers “might need to be a bit more realistic” about the qualities they’re seeking in job candidates, Hine said, adding that in certain areas such as durable goods manufacturing, wages have grown slowly despite demand for open positions.

The hiring problem can have a variety of consequences, according to DEED. For example, some employers redistribute their workloads, which can increase employee stress. Others might outsource work or simply be unable to meet customer demand, the agency said.

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DEED’s report is based on reported job vacancies in the second quarter of 2012, as well as subsequent employer interviews. To view the full DEED report, click here.