Now that graduation season is upon us, there are all sorts of stories in the media about the horrible job market for college graduates, high student loan debt and so on.
With the national unemployment rate remaining high (7.5%), according to the U.S. Department of Labor's Bureau of Labor Statistics, and New York City -- home to a big portion of the nation's financial services industry -- having its unemployment rate stuck at 8.4%, it does seem that recent grads are facing a difficult job market. Keep in mind that the 7.5% unemployment rate doesn't include people who are no longer looking for work. Economists estimate that the "real" unemployment rate is around 14% to 15%.
The unemployment rate for recent graduates -- the so called Gen Y or millennial workers -- is right up there in the 13% to 14% range. Included in this group are the kids just coming out of universities, some with master's degrees.
Yet employers across all industries are claiming that they can't find qualified workers. An estimated 2.5 million to 3 million jobs are unfilled at any given time. Even homebuilders say there's a shortage of 116,000 qualified workers in the United States.
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So what gives? Have U.S. workers fallen that far behind when it comes to job skills? Did workers suddenly become unemployable overnight? Did they just forget all the skills that they once knew? Or are our universities failing to provide adequate education and skills to students? It's hard to imagine that an estimated 11.6 million willing workers are unemployable or that a large portion of Gen Y and millennial workers don't have the skills to join the workforce.
In better economic times, some of the bright minds coming out of the nation's universities went straight to Wall Street. Today, fewer of those opportunities exist. Yet financial services employers claim they can't find enough qualified employees, even after the industry has shrunk considerably since 2008, with the layoffs of thousands of workers.
Trading and the asset management business are changing rapidly, however. Equities trading volume is lower, so institutions don't need as many equities traders. At the same time, trading in other asset classes is up, as is the use of sophisticated trading strategies, financial models and algorithms. Many traders who left financial services a few years ago may not be up to speed. Traders looking for work will need to brush up on new asset classes and trading strategies.
This is not to say that the lack of qualified workers is all the employees' fault. The financial firms are also to blame. In years past, most had training opportunities and apprentice-like programs. Today, training is neglected. Employers expect someone else to train their employees for them, and they want new hires to be able to hit the ground running. If no one is investing in their employees or providing training, where will the next wave of talent come from?Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio