The demands of cashflow management and finance terms don’t really allow for workers to have much onboarding time.

Skills Gap 4: Undercapitalization

7 Billion people are competing for a couple Billion jobs. That makes it silly to suggest that we face Talent Shortages. In the US, slightly less than 50% of the population has something that can be called a job. That’s a lot of people available.

You can be forgiven for imagining a mob of people standing around  embodying a quote from a recent election. On first glance, that looks like an extraordinary resource to be applied to supposed workforce problems. Unfortunately, a significant majority of the people who don’t work are either too old or too young.

Then, there are the folks who have given up on work. It’s hard to tell whether or not they’ve gotten work as freelancers. That part of the economy runs close to the ground and is full of tax avoidance schemes (cash is a good substitute for an offshore account when you’re talking about thousands instead of millions). The numbers are hard to collect.

You can be pretty sure that income is being earned somehow. Unless the welfare rolls have exploded (and they haven’t), discouraged workers have to bring home some kind of bacon. With no big crime increase and no particular growth in daytime TV viewers, it’s hard to imagine that the disenfranchised are really just lying in bed.

The number of free bodies has nothing to do with whether or not an employer can find the skills it requires. Changing strategy, relentless technology and external competition  conspire to make consistency in hiring the stuff of theories. Having work and not being able to get it done is a predictable experience.

Undercapitalization (usually caused by an extreme debt load) makes it difficult to invest in workers with the right potential (formerly known as training). The demands of cashflow management and finance terms don’t really allow for workers to have much onboarding time. This has increased employers’ desire to have plug and play workers. Some of the skills shortage is simply a question of the company’s debt load. They can’t afford to hire someone who is ‘close enough’.

If you are searching for someone who can do this job right now, they are much harder to find than someone who can do it with a little training. It’s a problem that involves the fact that there are gross differences between the same job at different employers. Virtually no one is equipped to directly step into a job without some level of familiarization.

There are a variety of financial circumstances that make it hard for an employer to hire imperfectly skilled people and provide the necessary training. In some cases (like moving a C++ programmer onto Ruby On Rails), the dollars involved are insignificant. But, if you need your workers to be productive from day 1, any investment is too much.

It’s probably better to understand these cases as outsourcing decisions that haven’t been made yet. If the employer can’t afford either a competitive wage or the costs of training, that department is headed for the chopping block.

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Read the series

• Skills Gap 1: The Hiring Paradox
• Skills Gap 2: Outsourcing
• Skills Gap 3: The Pace of Change
• Skills Gap 4: Undercapitalization
• Skills Gap 5: The Future is Here