As the labor market contracts, it’s not just that there are fewer people to hire. Employers looking to fill open positions also have fewer options to find workers with the right skills because most well-qualified candidates already have a job.
Solving the skills gap is typically discussed within the context of the education system. Hot topics include ways we can improve STEM training and encourage more students to attend vocational schools. But in order for businesses to keep growing and remain competitive today, they can’t afford to wait for systemic or cultural change.
That’s why some employers are starting to offer on-the-job training (OJT)to workers with fewer skills.
Not every industry is moving quickly enough (if at all) to train their employees. Our data confirms the time-to-fill is expanding. In the first quarter of 2018 it took about 17 days to fill an open role posted on ZipRecruiter.com. In Q2 that figure jumped to 31 days, as the total number of job openings soared to an all-time high.
We analyzed thousands of job postings in our database by industry and location to determine where the best opportunities lie for applicants interested in getting paid to be trained. We also pinpointed the industries where employers have failed to respond to the skills gap by increasing OJT.
Employers quickly got comfortable with the healthy supply of cheap talent on the market during the recession. Although that supply has been shrinking steadily for the past several years, they’ve been reluctant to offer OJT primarily because it hits their bottom line. It takes time and money to bring on workers with little to no relevant skills and get them up to speed.
The industries increasing OJT so far this year are industries where compensation is either relatively low or depends heavily on performance, such retail and real estate. Training costs can be offset in these fields, because employers are likely to pay less for labor during the on-boarding period when workers are earning lower, entry-level wages or have yet to pull in a large commission.
One major exception here is the construction industry, which has been forced to offer more OJT to meet the extreme hiring demand brought on by a residential and commercial real estate boom, a fact clearly illustrated by our metro area comparison.
As of July, construction wages grew 3.5 percent annually, which is close to a full percentage point higher than the national average, and a recent study from Zillow showed residential construction wages growing 5 percent year over year in April.
Add the cost benefit of company-funded training to getting paid a steadily increasing wage, and the construction industry is clearly the leading example of how to hire in a low unemployment environment. The proof is in the numbers: According to the latest jobs report, total employment increased in July by 1.6 percent compared to last year. The construction industry grew payrolls by 4.4 percent.
Change in Jobs Posted to ZipRecruiter
Offering On-the-Job Training Q1-Q2 2018
Industries Offering More Opportunities Quarterly Increase
Retail: 61 percent
Sports and Recreation: 31 percent
Construction: 25 percent
Real Estate: 18 percent
Food and Beverage: 4 percent
Industries Offering Fewer Opportunities Quarterly Decline
Finance and Insurance: 81 percent
Business: 59 percent
Travel: 53 percent
Manufacturing: 41 percent
Healthcare: 37 percent
Top 10 Metros With the Most
On-the-Job Training Growth Q1-Q2 2018
Metro Quarterly Increase in Jobs Offering OJT Industry
1. Sacramento, CA 66% Construction
2. Syracuse, NY 51% Construction
3. Washington, D.C. 35% Construction
4. San Diego 31% Retail
5. Chattanooga, TN 30% Finance and Insurance
6. Springfield, OH 15% Healthcare
7. Bridgeport, CT 11% Retail
8. San Francisco 9% Construction
9. Chicago 5% Construction
10. Portland, OR 4% Construction
