U.S. job openings are at a record high of 5.8 million, and a new survey from Duke University provides a key reason: Employers say they can’t find workers with required skills for many openings. As a result, employers are planning to boost pay in an attempt to find workers. They also continue to push for more foreign workers through high-tech visas known as H-1Bs. The risks of a workers’ skills gap? A less competitive U.S. economy, and companies might be forced to relocate overseas if they can’t find workers here, warns a Duke economics professor.

*Mostly they are saying they can’t find employees with the required skills,” Duke finance professor John Graham tells WRAL TechWire, referring to the just-released Duke-CFO Global Business Outlook survey.

It’s just not high-tech, either. Graham says companies need more mechanics, more people who can work in the “trades” like welders.

Affirming U.S. government data released Wednesday about the millions of open jobs, 93 percent of companies participating in the Duke survey say they have job openings.

Why? Finding talent.

The quarterly report says “nearly half” of chief financial officers at U.S. firms complain that jobs are going unfilled because of a skills gap.

An example of companies being unable to find talent came Wednesday at SAS, which hosted a program stressing the need to train more students in fields such as data analytics. The software giant is reaching out to Wake tech and more universities than ever in an attempt to encourage more students to seek degrees in STEM (science, technology, engineering and math) skills.

CFOs are fighting back in an attempt to fill vacancies. One result is better pay for those who do have the requisite skills.

CFOs say on average they are planning to boost wages by more than 3 percent this year.

“CFOs say they are increasing wages in response to labor market pressures and difficulty finding key workers,” said Graham, who teaches at Duke’s Fuqua School of Business and is director of the survey. “Employment should continue to increase over the next year but at a somewhat slower pace. All else equal, we expect the unemployment rate to remain relatively constant.”

Threats of talent shortage: Foreign jobs, foreign moves

In a Q&A with WTW, Graham talks about the skills gap and how it is affecting businesses.

  • Many tech companies and others continue to press for more H-1B visas. Does this survey reflect in part a need for more highly skilled foreign workers? Please explain.

We did not ask this quarter but in previous surveys yes, tech firms very much want to hire high-end skill workers.

  • Are our schools not producing enough trained workers in needed areas or are workers simply not polishing up/expanding their own skill sets to meet the requirements for employment today?

In past surveys, CFOs have complained that the U.S. does not train enough workers. Many businesses would like “trade” training (diesel mechanics, welders, etc) to increase.

Also, there have been jobs for open for mechanics, etc, for quite some time in the Midwest .. and yet workers seem unwilling to move there and/or obtain the training on their own.

  • Will higher wages and more benefits be enough for companies to find sufficient workers or will they have to get more involved in training (such as SAS in Cary which is working with community colleges and universities to train more people in analytics)?

Probably both.

Companies (small firms especially) don’t want to train someone who might then leave the firm … so they first need to train them, then pay them enough to retain them. “Train and retain”. Of course, if wages went up enough, that would attract more workers to a given job

  • What are the short-term threats to companies that can’t find needed talent?

Lose business to overseas.

Threat to workers: in some cases, the firm might shift the job overseas or across the border, and it might stay there.

  • What are the long-term threats?

[A] less competitive US economy

  • If all 5.8 million jobs could be filled tomorrow, what would the unemployment rate be?

Back of the envelope:

There are 157 M people in labor force

5.8/157 = 3.7%.)

So, all else equal, the unemployment rate would fall to 5.1% – 3.7% = 1.4%.

But, that would never happen

1) there is always more unemployment just bc a certain portion of the workforce is between jobs (even when moving up to a better job)

2) to fill all open positions, wages would have to jump, and that would increase the labor force participation rate, so the Unemployment rate would not fall as much

Other findings in the survey

Based on the survey’s other findings, the job news is not good in all fields.

Look for employment to “shrink” in the coming year in:

  • finance
  • energy
  • agriculture industries

CFOs also are concerned that the U.S. stock market is “still overvalued” despite recent losses.

“CFOs are very bearish on the U.S. market,” said Fuqua professor Campbell Harvey, who was a founding director of the survey. “Our survey took place during a volatile time where there was a 10 percent market correction. Even after this drawdown, 55 percent of CFOs thought the market was overvalued.”

Overall, CFOs rate the U.S. economy at a “60” on a scale of 100. That’s down from 65 in the spring survey of this year and 63 in the previous quarter.

Still, the U.S. economy remains the world’s strongest.

What presidential candidate is best for business?

Donald Trump gets the most “votes” from CFOs, as WTW reported last week.