The real jobs problem for CEOs isn’t hiring

In today's CEO Daily, CEOs are facing a talent shortage that cost-cutting measures cannot resolve. The primary focus is on tech leaders' wage increases. Globally, markets are experiencing a decline as oil prices rise. However, the article also covers various news and informal discussions from Fortune. It's post-Labor Day, a period when hiring typically increases.

The latest job report revealed that U.S. employers added 162,000 jobs in August, 98% of which went to women. Job growth was substantial in lower-wage sectors such as food service and home health care. The Bureau of Labor Statistics forecasts that total employment will rise by only 3.5% between 2025 and 2035, a decrease from the previous decade's 10.9% rate.

Discussions with CEOs reveal less optimism and more concerns about skills gaps, low engagement, the leadership pipeline, uncertainty about AI, and pressure to reduce costs. Many express their concerns through various initiatives. BlackRock is investing $100 million in skilled trade training programs and has partnered with Ford, Carhartt, and Alphabet on the Alliance for America's Skilled Trades. Meta has collaborated with CBRE and other organizations on a five-week program that guarantees a job upon completion.

Matthew DiCanio, president and incoming CEO of Concentra, a national healthcare company, observes that white-collar jobs are slightly declining, while blue-collar jobs are increasing. Despite the growing interest in trade schools, parents still prioritize four-year colleges for their children, as the annual cost can exceed $100,000.

However, they tend to select prestigious public or private institutions. Employee engagement remains a challenge, with fewer than a third of employees being engaged in their jobs. Gallup reports that over half of U.S. workers are experiencing significant daily stress. Trust and purpose are emphasized in top employers' surveys, guided by partnerships with Great Place to Work.

However, tangible signals matter more. Workers demand wages that keep up with inflation, but this is not occurring as real wages have fallen for four consecutive months. Benefits also play a crucial role; a CEO recently mentioned that a new travel reimbursement system deprived employees of personal loyalty benefits, leading to reluctance to travel or demands for compensation in other forms.

ADP CEO Maria Black highlights that AI should augment leadership's value by enhancing judgment rather than replacing it. However, data shows that AI is reducing entry-level jobs, which affects the development of essential skills. Voya Financial CEO Heather Lavallee emphasizes the importance of integrating talent of various ages while investing in training and mentorship.

She believes that learning best occurs on the job. CEOs of U.S. public companies typically serve an average of 8.5 years in their top roles, incentivized to cut costs rather than build the workforce from the bottom. While the federal government is taking steps to promote apprenticeship programs and various states are implementing similar initiatives, the most effective approach is for companies to hire and train more Gen Z workers.