Sep 23, 2015

Should we care about the low-wage sector skills gap?

The hourly-jobs sector is the heart of the U.S. labor force with 76 million workers, and open positions are staying open for 30 days -- longer than ever recorded in the 15-year history of the National Mean Vacancy Duration Index [1].

With over nine million workers looking for jobs, why is it taking longer than ever for employers to fill open positions? The popular explanation is that the American economy is currently suffering from a surplus of unskilled workers.

Half of U.S. employers experience difficulty filling “mission-critical” positions [2], and 61 percent claim they’ve hired someone who did not meet the job requirements [3]. In sectors such as manufacturing, the skills gap represents a loss of up to $14,000 per open position in revenue annually [4].

More than half of adults in the U.S. lack the literacy skills necessary to identify or interpret one or more pieces of information [5], a key element for success in work. And while extensive research exists on the skills gap affecting sectors such as engineering, manufacturing and technology, there is also a major gap in the low wage hourly sector. reports gaps on basic skills required to be a merchandiser, retail clerk, customer service rep, hotel housekeeper, delivery driver or fast food restaurant worker, among many others. Up to 35 percent of job seekers are missing one simple skill such as having a driver’s license, a security guard certification, a food handling permit, or knowledge on how to read a planogram, build rapport with a customer, or operate a specific piece of equipment. These gaps keep them from getting a job that represents, in some cases, a double-digit percentage increase in their hourly wage. In most cases, job seekers were not even aware of the need to have that skill, and instead spent time and money getting trained in skills that are not beneficial in the job market.

A shift might be needed to help individuals find the right path to the right job, recognizing that most jobs do not require a four-year degree.

How do we deliver the right training, be it four years, one year, one month, one week or one hour -- to the right person? And how do we simultaneously inform potential employees that the job is out there and if necessary, show how to improve their skills based on what the employer wants when making the hire?

Many experts point to low wages as a root cause of the skills mismatch. This scenario is evident even in skilled industries where, although employers should pay more to attract and retain qualified workers, current market dynamics and consumer behavior demand the cheapest possible good or service, thus adding downward pressure to wages. This results in a lack of incentive, on the worker’s part, to invest in proper training.

Why pay to go to a technical school or even to a four-year college or university only to make marginally better wages?

A 2014 study by CareerBuilder found that 92 percent of employees become more loyal to a company that invests in training them. In the hourly sector, with attrition rates as high as 200 percent, even a marginal improvement in retention can have a meaningful financial impact on reducing the costs associated with a constant hiring cycle. This money can then be used to bump up wages for workers with the right skills.

The U.S. private sector has been addressing the need for skills training for some time, with companies such as Comcast launching their own learning institutes. Since 1999, they have offered over 4,000 training courses, delivering 4.7 million hours of training to their employees, with the majority of the resources spent on front-line hourly employees. In 2014, the average annual spending on training in companies with more than 10,000 employees in the retail and service sectors was over $19 million while companies with 1,000 to 9,999 employees invest $0.5 million to $1.6 million.

In 2015, over 40 percent of U.S. companies plan to invest in Learning Management Systems and online learning tools, and 23 percent in mobile learning. Many companies plan to increase their investment in worker training in 2015. In the retail sector, two of every three companies plan to increase spending, along with two of every five companies in the service sector. The key drivers behind this higher spending are the increase in the workforce (more people to be trained) and the acquisition of training technology [6].

Technology must continue to develop along with the trend for more worker training, as most content needs to be adapted to the mobile web and video format as a result of the changing behaviors of the current and next generation of hourly workers. Among millennials, who account for 35 percent of the total workforce, the penetration of smartphones is over 80 percent and growing.

Mobile technology can enable the private sector to address basic skill gaps in real time.

For employers, this can result in a better trained and more loyal workforce. For workers, it can represent an increase in income as they get exposed to continuous, relevant and up-to-date training and education -- the specific training they need to move up one notch in their journeys.

The question is:

Do we care enough about the sector and understand well enough the potential benefit for the U.S. economy if we address not only the high and mid-level skills gap, but also the lower/basic skills gap for hourly workers?

  1. DHI-DFH Measure of National Mean Vacancy Duration April 2015 -
  5. Program for the International Assessment of Adult Competencies (PIAAC), 2012
  6. 2014 training industry report - Dec 2014 - training magazine,

Mar 31, 2015

Mobile recruiting in the dark ages

How many times in a given day do you access the web on your phone? You do it so often that you don’t even think about it. Americans spend an average of three hours a day on the phone, 55 percent of that time accessing the Internet from a mobile device: paying bills, house hunting, getting a ride, shopping and streaming music. And at some point, you and 70 percent of the U.S. population will conduct a mobile job search to pay all those bills! Our phones are with us 24/7, becoming an extension that connects us to the world.

Yet, mobile recruitment is still in the dark ages.

How dark? Research done by Jibe found that 60 percent of respondents believe that, even if mobile friendly, job applications are more difficult to fill out than mortgage, student loan or health insurance applications.The complexity is not necessarily related to the difficult questions that are asked, but the actual functionality of the job application.

In their 2014 summary job report of large enterprises, which processed close to one million mobile job applications, Jobaline data shows that 80 percent of applicants abandon job applications that are non-mobile. This is because they find themselves trying to type in tiny spaces designed for PC interface, having to take unnecessary steps in the application or going through too many changes of context, including advertisements in the middle of a job application.

The result: Job seekers waste too much time and employers have a large negative financial impact on their operations. This is especially true in the hourly jobs sector, where attrition rates are up to 200 percent per year, and part time jobs or seasonal jobs result in a continuous hiring cycle. Mobile job applications done wrong cost large employers over 80 percent of their job advertising budget.

Simply Shrinking the Job Application Interface for Mobile Delivers the Same 80 Percent Dropout Rate of the larger screen.

Just like the e-commerce or entertainment industries, which went through significant changes to embrace the mobile web, mobile recruitment must go beyond just making the job application fit into a smaller screen.

An inefficient process in a big screen is just as inefficient in the smaller screen. Online recruitment requires reinventing the experience, while taking advantage of the many other dimensions that mobile brings to enrich the job recruitment process. Otherwise, employers are wasting time and money creating online application experiences that, even if mobile, still results in a wasteful 80 percent of their advertising dollars and recruiters’ time.

If you just apply a responsive design to the old “taxi” web pages, we get “taxi” mobile - it’s the same old and dated process, with the same business results, just in the small screen. By reinventing the experience, you get Uber or Lyft, instant match of people that need a ride with people that want to make a living out of offering rides to others. In this context, advanced mobile matching technologies will be the dominant factor in the Human Capital Management sector over the next decade.

Thanks to the ubiquitous nature of mobile devices that are attached to us almost 24/7, we can capture voice, images, location, time, activities and assess skills in real time. We can combine the power of observed information, which is often more meaningful for matching purposes than the declared information captured through standard online or paper-based applications. Observed or inferred information can often paint a more complete picture of a job applicant, resulting in better matches that hopefully result in long lasting employment relations.

In a side-by-side comparison of people completing interviews from mobile devices, the completion rate is five times higher and the quality of candidates is up to eight times better when the proper mobile experience is enabled.

Taking things one step ahead, the use of advanced technologies for algorithmic analysis of the voice of job applicants can take the quality of the match to a whole new dimension. On the other hand, just doing a mobile redesign or a mobile app of an existing Applicant Tracking System process results in only marginal improvement in applicant volume, quality or satisfaction.

If the web is mobile, why aren’t employers embracing it faster? CareerBuilder found a variety of reasons employers don’t use mobile application processes: 38 percent of employers haven’t invested in the required technology; and more than 35 percent don’t have the resources or can't find a mobile solution that does more than take their Applicant Tracking System and make it mobile. Interestingly, more than one-fifth of employers aren’t sure why they don’t offer a mobile application process.

The web is mobile and recruitment is mobile, especially in the hourly-jobs segment. Beyond the obvious difference in the screen size, if technology is leveraged properly, mobile recruitment allows for a richer experience that can remove friction from the job application process.

With close to half-a-billion job applications processed every year to hire over 55 million people, properly using mobile recruitment technologies represents a multibillion-dollar cost savings opportunity for the U.S. economy.

Aug 16, 2014

Life after Microsoft - Create and Nurture

It’s a big risk, leaving a big company to join the ever-evolving startup world.  This past month journalist Rachel Lerman from the Puget Sound Business Journal interviewed me and other leaders on the subject. This is what we talked about.

by Rachel Lerman, who covers technology and retail for the Puget Sound Business Journal.

Luis Salazar still remembers when he was in the process of leaving in 2008 to join a startup. Going from a guaranteed, very high salary at Microsoft, where he was general manager of what is now Office 365, to a world with no guarantees was stressful, but it was worth it because he wanted to build something from scratch.

In 2012, Salazar started, a Kirkland-based software company that connects hourly wage workers with companies that are hiring.

Life after Microsoft is all about passion, he said — if you don’t care about what you’re doing, the money is not going to come.

“Make sure you are running into something,” he said, “and not that you are running away from something.” That’s how he hires people: passion first, then experience, then skills.

Things change rapidly in the start-up world, and that’s not for everyone. But Microsoft did help him prepare for that — plans may be useless, but planning is not, and Microsoft teaches that skill over and over.

It’s a difficult shift from thinking in billions to thinking in single units, he said. That meant the first $5 his start-up made were a big deal.

At Microsoft, he never worried about cash flow; it was all about profit and loss. But decision-making changes dramatically when all of a sudden you have to worry about cash.

“The start-up world is way more agile, there is no place to hide,” he said. “Starting a start-up, your results are seen by everybody.”

It’s not common to be much in touch with the start-up world while at Microsoft, he said.
“You don’t know what you’re missing.”

He wishes he knew: “That it was going to be this much fun.”

His best quality post-Microsoft: “I have an insatiable curiosity that drives some people nuts.”

  • Left Microsoft: 2008
  • Now: CEO & Cofounder, the largest and faster growing mobile & bilingual marketplace for hourly-wage jobs
  • Jobaline employees: 20
  • Jobaline total funding raised:$11.3 million Survival skill: Tapping passion

  1. Make sure you understand the culture of the company you are about to join— it matters. 
  2. Take your time to decide what kind of opportunity you want next.
  3. Don’t waste your time joining a startup if you like predictability and a big paycheck.