Peter Orszag very succinctly addresses the following riddle:

Over the past three years, the number of job openings has risen almost 50 percent, but actual hiring has gone up by less than 5 percent. Companies are advertising a lot more jobs, in other words, but not filling them.

He describes three possible explanations. First, there could be a skills mismatch:

One possibility is that there is a mismatch between the work that companies need done and the skills that workers have. As Peter Newland of Barclays Plc has said, “We believe that this divergence between openings and hiring is consistent with our view that some of the loss of employment during the recession was structural, rather than purely cyclical, in nature.”

Second, the long term unemployed may not be willing to return to the job market for lower wages. Companies aren’t willing to pay enough to attract them:

A second explanation is that employers are offering jobs at wages that are too low to attract good applicants. Alan Krueger…believes this to be an important piece of the puzzle. He argues that the unemployment rate for those just recently out of work has now returned to roughly pre-crisis levels, and that people who have been out of the labor force for an extended period are exerting little downward pressure on wage rates. This combination means that, although the long-term unemployed still face a tough road ahead because they are essentially on the margins of the labor market, pressure is growing for higher wages for everyone else.

Or third, perhaps there’s an increasingly robust “internal” labor market at big companies:

A variety of other indicators — including fewer people moving to take new jobs — suggests that companies are often filling openings from within. Many nonetheless advertise such positions externally, which would boost the job-offer rate in the data. The survey counts only jobs filled from outside a company in its statistics on hiring, so the increase in job-offer rates for this reason would not correspond to an increase in hiring rates.

Thanks to Tyler Cowen for the link, whose post is titled Are we seeing skills mismatch after all?