Job Crisis in America - july 2013 prepared by PMOAdvisory.com

1. Job Crisis in America -
Today and Tomorrow
2013
TE WU
PMO ADVISORY LLC | www.pmoadvisory.com

2. Management Consulting with a Social Conscience
Page 1
Job Crisis in America - Today and Tomorrow
Introduction
The United States is facing a crisis. In many ways, this crisis is larger than the national deficit or the
ongoing threat of terrorism. In fact, left unchecked, this crisis will almost certainly erode our country’s
competitiveness and create economic consequences that will last for generations, if not forever.
This crisis strikes at the heart of our historic national success, built largely with a world class workforce
first trained and unleashed after World War II. The education and training provided by the G.I. Bill
propelled America’s rise as the most competitive large economy in the world.
But today, with thousands of college graduates unable to find solid entry-level professional jobs, a
vacuum of vast proportions is being created. If left unchecked, this vacuum will continue its rapid
growth, resulting in a shortage of future managers, executives and leaders.
In this paper, we will look at the observable causes for the problem and propose a viable solution.
Crisis Contributors
As the American economy begins to once again steam forward, a large swath of the workforce is being
left behind. Many recent college graduates are not able to find entry level professional employment in
their field of study.
This opportunity void did not developed because students have chosen limited or exotic degrees such as
art history. The void is also not directly related to the shrinking of America’s manufacturing base. In fact,
the lack of entry level professional opportunity is often most prevalent in the very professional fields
that historically drove the greatest systemic wealth for the nation. According to Payscale (Payscale,
2013), these fields include business and business management (Rank #1), economics (Rank #10),biology
(Rank #8), English (Rank #9), legal services, research and development and computer science.
The Size of the Problem
But, just how severe is the crisis? In a March 2012 Forbes article, job placement firm Adecco reported
that at least 60% of recent college graduates could not find an entry position in their field of
study(Crotty, J.M., 2013). In a more recent article by Huffington Post, underemployment among recent
graduates can be as high as 40%. (Berman, J., 2013) Business and management majors are 8.2 times
more likely to be underemployed. If you imagine a professional career as a ladder where each rung is
built on the success of the previous rung, between 4 to 6 out of 10 college graduates are left without the
ability to create their first rung. Successive rungs, including those that develop management skills, may
never fully develop.

3. Management Consulting with a Social Conscience
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The Three Major Factors to the Problem
The Education Factor
American business and professional schools are one ingredient in the growing crisis. Many
undergraduate degree programs do not include basic workplace skills including moderate problem
solving, project management and communication skills. Some do not have the basic skills of using
Microsoft Excel or PowerPoint. A 2012 Chronicle of Higher Education and American Public Media’s
marketplace study of 50,000 U.S. companies showed that over half of the companies surveyed reported
significant problems finding recent graduates with appropriate skills.(Fischer, K., 2013)
Secondary education points to their ability to generate internships as their de facto solution to advancing
basic workplace skills for students and this may be a partial solution. In their book, Quarterlife Crisis,
Abby Wilner and Alexandra Robbins note that recent college graduates are leaving a lifetime of clear and
structured steps and entering a workplace that offers no clear roadmap. (Robbins, A. and Wilner, A.,
2001) At the same time, graduates are also defining themselves personally.
The difficulty with internships for graduates lies in that they are often veiled outsource opportunities,
not leading to a legitimate employment offer. The Forbes magazine article also reported that employers
complain that the short-term nature of many internships does not allow time for interns to clearly
demonstrate a graduate’s ability to stay with a project or employer for years versus months.(Forbes,
2013)
Some internships also do not aid in the formal development of the first career ladder rung because the
intern is toiling in menial tasks. In fact, a short term internship may do more harm than good by isolating
the intern from the habits and skills found in a functional workplace.
The Graduate
The graduates themselves areanother ingredient in the American workplace crisis. ACT, the educational
research and testing organization, reported that 70% of recent college graduates do not have the work
ethic needed for success in the professional workplace. (Chacon, B., 2013)
Many recent graduates suffer from “ambition inflation,” according to psychologist Jean Twenge. In her
findings reported by DailyMail.com, Twenge and her partners noted that many college students suffer
from an inflated sense of their abilities coupled with an unrealistic expectation of how the workplace will
reward their efforts.(Anonymous, Dailymail, 2013) When this “inflation” meets the real world, graduates
are unprepared to adjust their expectations and align them with reality.
Parents may contribute to this by promoting the idea of gaining “life experiences” rather than actual or
independent workplace experience. If parents do not allow and help their children learn to manage
disappointment and failure but rather “protect” their children from any unpleasantness, graduates may
not be ready to handle real life difficult situations after college.

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The Offshoring and Outsourcing Factor
American business is the final and perhaps the most important ingredient in the employment crisis. Job
outsourcing has become a staple for business leaders driven to short term economic gains. For a
company to quickly reduce costs, outsourcing appears to be a simple solution and first rung positions are
typically the easiest to outsource to hungry and low cost foreign workers. It is not surprising that cost
reduction or control is cited as the number one reason for outsourcing.(Job Outsourcing
Statistics)Companies save significantly by avoiding recruiting, hiring and training costs.
Furthermore, American business, particularly the large publically traded flavor of American business, has
a very short economic attention span. Results are measured in calendar quarters and the delta between
costs and profits is the immediate and constant driver. Chief Executive Officers have an average tenure
generally reported to be between four and eight years. So, “long” range planning often only extends
into the next year or two.
This perpetual cost pressure often does not allow room for the time and effort required to even partially
develop a college graduate and many senior and middle managers take shortcuts and outsource entry
level functions to foreign countries.
Probable Crisis Outcomes
When all of these ingredients come together, the lack of a career first rung has two clear outcomes. For
the graduates, it is likely that their entire adult work life will not truly recover economically. The
combination of delayed employment in their field and basic financial needs will almost certainly place a
burden on the already thin American support system with continued unemployment and welfare
payments.
Perhaps a larger concern to American business should be the future lack of new managers. As long as
there have been businesses in the United States, there has also been formal and informal grooming
processes for developing tomorrow’s middle and senior managers. By transferring first rung
employment opportunities to outsource providers, American companies are trading short term financial
savings and lower head counts for a certain inability to manage their companies in the future. The
valuable trade of entry level employment and the mentoring and observation needed to develop next
generation managers is lost in the outsourced business model.
A Solution to the Crisis
Although many solutions have been proposed, they have severe design flaws. Some solutions, such as
the promise of government sponsored additional training are not economically feasible or the training
themselves relevant to today’s business needs. The proposed solution of stemming outsourcing through
regulation is worse as it impedes the competitive abilities of American companies and rewards foreign
providers not burdened by the same regulations.
We believe that the solution requires three successful components that together develop a virtuous
economic partnership that also avoids continued government or corporate handouts.

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First, today’s graduates must develop real and relevant skills for today’s business environment. This
includes the need to work on real projects being completed in real U.S. companies.
Graduates will benefit from operating in the world beyond the classroom and field of study theory. They
will also have a real-world education in work ethic, communications and problem solving skills they will
need to fully develop their first and subsequent career ladder rungs.
Second, graduates must be willing to invest in themselves through continued training opportunities and
trial by fire. Also, they need to be willing to share the costs of this education and the sometimes
negative results that are often the inevitable result of trial and error. Sharing in the “pain” of their
shortcomings while also delivering tangible value to customers will give graduates skills that the
American free market system will recognize and reward.
Finally, businesses must recognize the true cost of outsourcing and be willing investment partners in the
United States. There can be no future for an American business if there is no early development of
tomorrow’s team leads, managers and leaders.
About PMO Advisory
Our company, PMO Advisory, is a socially progressive firm created with a dual mission: 1) Helping our
clients to be more successful by improving their business effectiveness and achieving execution
excellence; 2) helping our society by nurturing the next generation of business leaders and by promoting
greater sustainability (e.g. green project management). Our senior leaders are both seasoned business
professionals and experienced educators. We have constructed an environment that permits students
and graduates to work on moderate and long term real world projects under the supervision of our
experienced professionals.
Our company is not against offshoring or outsourcing; they are the reality of today’s business. But we
believe unless we stem the loss of future talents, both individual graduates and America will lose. By
unleashing the basic market economy forces, in the form of lowering cost to customers, creating real and
tangible business value, providing experience and robust learning to today’s graduates, balancing the risk
by engaging experienced professionals, PMO Advisory is leading the creation of a new socio-economic
business model that is both sustainable and virtuous. It is a win-win for our graduates, for our
customers, for the business professionals, and for our country.
For more information, please visit us at www.pmoadvisory.com.
Address: 466 Pompton Avenue, Suite 4, Cedar Grove, NJ 07009
Email: advisor@pmoadvisory.com
Office: 201-688-0680

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Reference:
1. Anonymous, Dailymail Reporter (2013), How college students think they are more special than ever,
January 5, 2013, MailOnline. Retrieved form http://www.dailymail.co.uk/news/article-
2257715/Study-shows-college-students-think-theyre-special--read-write-barely-study.html
2. Berman, Jillian (2013), Underemployment Widespread Among College Graduates, Worst For
Business Majors: Analysis, Huffington Post, June 18, 2013.Retrieved form
http://www.huffingtonpost.com/2013/06/18/underemployment-payscale_n_3459887.html
3. Chacon, Belen (2013), #1 Thing Hurting New Grads In Their Job Search, Careerealism.com, March 15,
2013. Retrieved form http://www.careerealism.com/job-search-new-grads/#chitika_close_button
4. Crotty, James Marshall (2013), 60% Of College Grads Can't Find Work In Their Field. Is A
Management Degree The Answer?, Forbes, March 1, 2013, Retrieved form
http://www.forbes.com/sites/jamesmarshallcrotty/2012/03/01/most-college-grads-cant-find-work-
in-their-field-is-a-management-degree-the-answer/
5. Fischer, Karin (2013), A College Degree Sorts Job Applicants, but Employers Wish It Meant More, The
Chronicle of Higher Education, March 2, 2013. Retrieved form http://chronicle.com/article/The-
Employment-Mismatch/137625/#id=overview
6. Job Outsourcing Statistics (2013), Sourcing Line Computer Economics, July 20, 2012. Retrieved form
http://www.statisticbrain.com/outsourcing-statistics-by-country/
7. Payscale (2013), The 10 Most Underemployed Majors, Retrieved form
http://www.payscale.com/data-packages/underemployed/slideshow/business-administration-major
8. Robbins, Alexandra and Wilner, Abby, Quarterlife Crisis: The Unique Challenges of Life in Your
Twenties, 2001, Penguin Putnam Inc, New York.