CEOs say the real jobs problem is not hiring but skills, engagement, and leadership gaps
August job growth of 162,000 positions masks deeper concerns among CEOs about skills shortages, low employee engagement, the thinning leadership pipeline, and the impact of AI on entry-level roles.
American employers added 162,000 jobs in August, but the number that matters most to chief executives is not the monthly payroll figure. In conversations with business leaders, the dominant worries are skills gaps, disengaged workers, a weak leadership pipeline, uncertainty about artificial intelligence, and relentless pressure to cut costs. The hiring market, in other words, is not the real problem.
Much of the recent job growth has landed in lower-wage sectors such as food service and home health care, and the Bureau of Labor Statistics projects total employment will expand only 3.5 percent between 2025 and 2035, a sharp slowdown from the 10.9 percent growth rate of the prior decade. That structural shift is pushing companies to rethink how they find and develop talent rather than simply compete for it.
Some firms are investing directly in training for skilled trades. BlackRock is putting $100 million into skilled trade programs and has partnered with Ford, Carhartt, and Alphabet on the Alliance for America’s Skilled Trades. Meta has worked with CBRE and other groups on a five-week program that guarantees a job upon completion. Matthew DiCanio, president and incoming CEO of Concentra, a national health care company that conducts employment screenings, said he is seeing “white-collar jobs shrinking slightly and blue-collar jobs picking up speed.”
Trade schools are gaining popularity, but most parents still steer their children toward four-year colleges, where annual costs can now exceed $100,000. Families are increasingly favoring public or elite institutions, a trend that leaves mid-tier private colleges under pressure and raises questions about whether the traditional degree path remains the best route into the workforce.
Employee engagement is another major concern. Gallup reports that fewer than a third of U.S. workers are engaged in their jobs, and more than half say they experience significant daily stress. Jon Clifton, Gallup’s CEO, said “work makes people unhappy because we’re not focused on the things that really matter.” Surveys of top employers conducted with Great Place to Work point to trust and purpose as recurring themes, but tangible signals matter just as much. Workers want pay that keeps pace with inflation, which is not happening as real wages have fallen for four consecutive months.
Benefits also play a role in morale. One CEO described implementing a new travel and expense system that stripped employees of the right to earn personal loyalty benefits from business trips. “People started refusing to go on trips” or demanded compensation in other ways, he said. “We underestimated the hit to morale.”
The leadership pipeline is a third front. ADP CEO Maria Black argues that AI should act as a teammate that increases the value of judgment and other leadership skills. But the data shows AI is also reducing entry-level jobs, which historically have been the training ground for future managers. Voya Financial CEO Heather Lavallee said she thinks about that constantly. “If you’re relying too much on automation and AI for some entry-level jobs, how do you create future experts?” she asked. Voya is focused on bringing in talent of all ages while investing in training and mentorship, recognizing that people learn best on the job.
The incentives for top executives complicate the picture. CEOs of U.S. public companies spend an average of 8.5 years in the top job, where they are rewarded for cutting costs rather than building up the bottom of the pyramid. The federal government and several states are doing more to incentivize apprenticeship programs, but the most direct route, according to the executives surveyed, is for companies to hire and train more Gen Z workers before the skills gap widens further.
