New posts on my SideWise blog
Been some time here since I mentioned my other more business-oriented weblog, SideWise.biz. I’ve added a fair few items over the past few months:
- The market as economy: how ‘the market’ consists of much more than just transactions, and how three distinct forms of ‘the economy’ intersect in one place
- Power, responsibility and bullying in the workplace: “When power in the workplace transmutes into bullying, we have a problem. A big problem.”
- Surviving the skills-learning labyrinth: “How do you and your staff learn new skills? And what can be done to make it quicker and easier to learn those needed skills? One answer is to explore the patterns in the skills-learning process.”
- Making continuous-improvement visible: If continuous-improvement consists of many small, almost-imperceptible changes, how do we make overall improvement visible? This article explores how.
- Money is the root of all… wasted time?: The usual claim is that ‘money makes the world go round’; but if so, why is it that the world seems to come to a halt each money has to change hands? This article explores the importance of a whole-of-system view of economics.
- The rise of the business-anarchist: To get the best from a stable system, you need business-analysts; but when the world is changing around you, you need the help of your business-anarchists! This article explains who they are, what they do, how they help to manage change, and how to find them within your own organisation.
- Ten ways to fail – and how to avoid them: “Success often arises just from avoiding failure.” This article explores ten key causes of failure, and what to do to avoid them.
- Where have all the good skills gone?: This article explore a rarely-acknowledged cause of the current ‘skills-shortage’: an incomplete understanding of the limits of automation.
- The relationship is the asset: “‘Our people are our greatest asset!’ How often have you stopped to think about what that phrase means – and what it implies in real business practice?”
More to follow over the next few weeks, of course. Share and Enjoy, perhaps?
When you use the phrase “labor shortage” or “skills shortage” you’re speaking in a sentence fragment. What you actually mean to say is: “There is a labor shortage at the salary level I’m willing to pay.” That statement is the correct phrase; the complete sentence and the intellectually honest statement.
Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.
If you start raising wages and improving working conditions, and continue doing so, you’ll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.
Re: Shortage caused by employees retiring out of the workforce: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.
Okay, fine. Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.
There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices — and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.
Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the “going price” has been held below the market-clearing price.
For basic-level skills – up to the 1000-hour mark – yes, I would probably agree with you: the rather crude current concepts of ‘the market’ would probably provide a practical incentive, and enough of an incentive, for people to shift their skills-base.
But I fear you may be missing the point for true skills capable of operating in the complex-space and above. There, one of the primary drivers for skills-shortages is not money, but time: it takes literally years to bring someone to that required level, and no amount of throwing money at the problem is going to change that. (Okay, there’ll be plenty of people who would claim to solve it with money alone, but I can guarantee that the skill-levels will be inadequate to the task.) And that, of course, assumes that the aptitude for the skill exists in the first place: for example, just how many people are there in the world who are even capable of understanding the deep-math of nuclear physics, or the subtleties of a financial market? At these levels, the skills-shortage will always be real.
I’d also guess that you live in an area where there are plenty of people with a high general-education level and a significant amount of experience. In most of the countries I’ve worked, the technical-skills pool has always been very small – hence a constant problem of overload, frequently at risk of burnout, and, again, a very real skills-shortage which no amount of throwing money at the problem would resolve.
In short, I fear you may have an over-idealised notion of the capabilities of ‘the market’, and perhaps not enough experience or understanding of what real skills – as opposed to high-level trainings – actually entail in practice. (To give one very simple rule-of-thumb, if it’s possible to do a certification for the ‘skill’ by a multiple-choice exam, it’s not a skill but at best a training – and not capable of handle real-world complexity without experienced help.) It is relatively easy to train up people to do the same tasks that computer-systems already can; it is not easy, or quick, to develop their skills beyond that point. The people we need most are those who can define the capabilities for new computer-systems, and/or can take over beyond the capabilities of those computer-systems – in other words, can deal with the real world rather than some convenient over-idealised abstraction.
To say that “Shortages are purely a function of price” betrays a serious lack of knowledge or understanding of how the real world really works – such as the complex intersections of the transaction economy, attention economy and trust/reputation economy, as described in another of the SideWise posts. Of course, you would be in good company in that lack of real-world understanding, because it seems most current economists make much the same myopic mistakes – which is precisely why our current economy is in such a chaotic mess!
So apologies if this seems rude, but I truly do not believe that you have thought about this in any depth at all, beyond the most simplistic of price-centred economic models: and as such I really cannot take your critique seriously. But many thanks for writing, anyway.