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Ending the great recession: The impact on skilled labor of sending jobs overseas

Hi and welcome back. We’re finishing a conversation on why Corporate America can’t find the skilled employees they want to hire who are literally knocking on their door.

In part two, I shared that the reasons included corporations having a preference for hiring temporary workers rather than in-house employees, no longer seeking employees with “potential” or experience in parallel or complementary industries when hiring full time staff and the exponential increases in education, credential and experience criteria for candidate employees over and above actual position requirements.

Last time, I outlined HR screening practices of using only database screening programs to screen applications and the bias against hiring the currently unemployed, which eliminate desirable candidates from consideration.

In this final part, let’s close out our conversation by exploring the predictable results that sending our manufacturing overseas has had on the availability of skilled tradesmen in the USA and how many multinational corporations now see themselves.

Major (and many smaller) corporations continue to outsource overseas everything from manufacturing to administrative support.

This practice, in addition to the nationwide de-emphasis of vocational training, has actually created a shortage of skilled tradesmen in the U.S.

Much ado is made of sending low-skill or semi-skilled manufacturing jobs overseas while the U.S. supposedly maintains its edge through high-tech startups at home. The government likes to point to numerous high-tech startup companies as proof this strategy is working.

Some entrepreneurs do successfully start corporations that may eventually employ 50 white-collar workers. However, the product they create is outsourced to overseas manufacturing in a factory that employs perhaps 5,000 workers to produce it. Apple’s use of Foxconn in China, which employs 250,000 in manufacturing its devices, is the poster child example.

Granted, it may cost less per unit to manufacture there, but those 5,000 low-skilled or semi-skilled workers employed there are exactly the type of person most likely to be unemployed in the U.S.

Note, too, that when manufacturing is sent overseas, the outsourcing company essentially must teach the foreign corporation how to create the new product, which is new knowledge that a foreign power can use to its own benefit. China is the best example of this. We have successfully trained and paid the Chinese (and others) to beat us at our own game, as evidenced by China’s growing economic and military might (its first aircraft carrier is under construction), and a political presence that must be reckoned with.

Now after several decades of implementing this strategy, companies that do try to manufacture locally cannot find skilled machinists, tradesmen, and hourly technical staff available for hire. One Savannah entrepreneur recently told me (with some measure of desperation) that he couldn’t find someone who could simply drill a straight hole in a door frame.

So skilled labor and manufacturing, the great economic engine that for more than 100 years was the promise of the high school graduate being able to enter the middle class, has essentially disappeared, which in great measure explains the growing class rift in our nation.

Finally, multinational corporations no longer see themselves as American companies.

Huge corporations have grown beyond national boundaries and, in some cases, even national regulation. A corporation now headquartered outside the U.S. (for tax purposes or otherwise) may care little about local issues like government deficit spending, the unemployment rate, education of the general workforce or related social issues that it may have the resources to impact.

In fact, its interests may pretty much be limited to the currency exchange rate as it works to repatriate its profits back home in the local coin.

The bottom line

I think I’ve made the case that skilled workers are literally standing in line wanting to fill vacant positions, but Corporate America can’t find them. But maybe you disagree. What’s been your experience? Is there a solution? If so, what is it? I’ll look forward to your feedback at results@bgaccelerators.com.

Dan Elder is a business coach, management consultant, speaker, and author of The Business Growth Accelerators Guide to Dramatic Business Growth in the Face of Fierce Competition on Amazon.com. Learn more at www.bgaccelerators.com.

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