Our world is experiencing a talent shortage in many areas. Globally, the talent shortage is the highest it has been since 2007, when the shortage was 41%. Currently, 40% of companies world-wide are needing more talent and increases in needed employees is moving upwards to at least 2% yearly. Japan is leading the employee scarcity at 86% shortage of needed employees. In the US, the talent shortage is running at 47%, but also continues to quickly increase.
It’s only been a few short years since employees were being laid off by the thousands, companies were moving to less expensive countries and ex-employees were left with mortgages and bills they could not hope to pay. During this period ex-employees struggled to find any type of jobs. Now, there are not enough trained people to supply company needs and employees have the ‘’upper hand’’ in determining both jobs and careers.
The greatest shortages globally are in skilled trades, such as electricians, carpenters, IT, sales representatives, engineers, technicians, truck drivers, accountants and machine operators. The list is varied and even though many of the unemployed are learning new skills, they are not being hired. Why?
Employers list the primary reasons for their talent shortages as:
Employers recognize that lack of employees equates to less production, less profitability and more competition from other companies also seeking more employees. Companies are quick to add that unless we have another recession, the talent shortage will likely worsen. There are no options but to implement changes and quickly assess them.
Company owners are well aware that company success is dependent on starting the changes immediately to both attract and retain the best employees.
Many companies are finding that there are options to successfully attracting and retaining employees and most are willing to try several options before determining the best solution for the current talent shortages.
One easy, but expensive way to slow down terminations and increase new hires is money. Globally, companies are just now feeling more secure and stable, so they tend to resist large pay increases. They are also aware that pay increases continue in frequency when they are competing with other companies for the same jobs. But it works, and approximately 26% of employers have started paying higher salary packages to recruits, which means they must also increase pay for current employees or risk even greater attrition.
36% of companies in the Manpower 2016/2017 Talent Shortage Survey indicated that recruiting outside the typical talent pool is helpful. For example, many recruiters and their hiring managers think creatively to find needed employees. For instance, they might search for employees with similar skills, lesser skills, or in different industries than they previously would have considered.
The same is true for companies and their recruiters and hiring managers who explore alternative sourcing strategies. 28% of companies are currently sourcing potential employees in areas they would have previously ignored. For example, sourcing potential employees in government training programs, disadvantaged programs, lesser education than required and/or source those with fewer skills but have potential for learning needed skills.
Another area that is becoming more popular with companies is outsourcing. Companies always have the option of outsourcing work when there is an employee shortage, unless there are so few available workers, that this is not an option. Companies globally are outsourcing 19% of their needed work that can’t be completed because of their talent shortages.
Outsourcing can be risky because employers seldom have the opportunity to ‘’try out’’ potential outsourced workers to determine if they have their needed skills. Many employers select a few companies that provide outsourcers and contract with them to pay and get the best qualified outsourcers. This is expensive, but practical since employers utilizing outsourcers do not pay benefits to the outsourcers, but do get an opportunity to evaluate possible job offers to the outsourcers.
Many employees prefer to work at home either part time, full time or as needed for family emergencies. Employers often resist. Talent shortages are resulting in more frequent changes in work models as companies are allowing their employees to work schedules that benefit employees.
Millennials are leading the requests for work model changes. They frequently persuade their employers to allow work at home. As a result, supervisors and managers are learning that often employees are more productive in non-office environments because there is less socialization. To date, 19% of talent short companies are utilizing changes in their typical work in office models.
Lastly, training and development has taken the lead in lessening talent shortages. Over one-half of the companies with talent shortages have started training and developing current employees to fill open positions.
Training programs are less expensive than paying increased salaries and result in better retention and attraction. Training and development programs quickly help employees see their employers as supportive and helpful in providing improved careers.
Companies are finding that current employees are more likely to remain if their careers are supported and encouraged by their employers. Also, companies are realizing that training provides better work skills and improves salaries of current employees.Even better, when employees are happy, they tend to share their happiness with others, including non-employees. Thus, the word quickly gets out that a company has happy, retained employees and attracts potential employees.
Remarkably, the number of employers providing employee training has jumped from 12% in 2015 to 48% in 2016. These employers are providing training opportunities that deliver excellent opportunities for greater pay and improved skills for their employees. There are also important additional benefits for training employees: improved employee retention, employee engagement and reduced turnover.
Smart employers are aware of the results of training and developing employees. They are now spending time and effort to encourage and enlighten employees about the potentials of improving their careers through training and development.Until something else comes along, this is the best solution to retaining and attracting employees during talent shortages.
Talent shortages are all about attracting and retaining. There are solutions but the adage of ‘’time waits for no one’’ applies specifically to talent shortages. If talent shortages are becoming your reality, it’s time to explore the option of retaining and attracting employees.