Every period of time has its share of challenges for employers. Over the past decade, talent has come center stage as employers seek to win market share from their competitors through innovation and disruptive technologies. From our vantage point within the employment market, we see five (5) prominent talent acquisition challenges that businesses will face in the near term.
1. Increased difficulty recruiting degreed and skilled workers
The unemployment rate for individuals with a bachelor’s degree currently stands at 2.7%. This is an incredibly low rate and many employers already can testify to the difficulty recruiting degreed professionals. Currently that challenge extends beyond those having a college degree. Welders, machine tool operators and other skilled professionals are becoming as difficult for employers to recruit and onboard as any role that they may be seeking to fill. As manufacturing related jobs boomerang back to the US, many employers are struggling to hire the skilled workers that they require.
2. Rising wage rates
Pressure is building on both the supply and demand curves of the employment market. This very well could be the next surprise (bubble) in the market. The demand for individuals with specific skill sets is increasing causing their salaries rise. At the same time the supply of talent in a great number of roles is decreasing. The shortage of STEM workers is just beginning to unfold as we are simply not graduating and/or training enough workers with the skills that US employers require in order to be competitive. These market realities, coupled with the recent increase in the minimum wage rate across the country has placed some companies in a difficult spot. We see this dilemma intensifying and becoming a significant problem for businesses should inflation begin to take root by virtue of the Feds monetary policies. (look for more on this topic in a future blog post)
3. Accelerated exit Baby- Boomers
Baby-Boomers can now afford to retire as their 201Ks have grown back to 401Ks. Something like 10,000 Baby-Boomers are turning 65 every day. Yikes! Let’s go back to challenges 1) and 2). The exiting of Baby-Boomers from the workforce only exacerbates the challenges facing employers by placing further strain on the supply of talent in the employment market while increasing the demand. To make matters worse, we would argue that the Baby-Boomers represent the finest talent that our employment market has to offer. They have years of wisdom and experience in industries and job functions that offer employers tremendous value. Who’s going to fill their shoes?
4. More counter-offers and no-starts
Counter-offers have always been a challenge for employers seeking to onboard new hires. But over the past few years it seems to have become an epidemic and it is no surprise as to why. Companies are lean and doing more with fewer employees. This fact, coupled with a talent shortage has companies in a real bind when an employee resigns. When an employee gives their notice, the employer is forced to survey the landscape and soon discovers the difficulty in refilling the role. In order for them to buy time and gain control over the situation they make a counter-offer to the exiting employee. Employers on the other side of this equation will need to sell their opportunity more than they have in the past, they will have to make sure that their candidates are serious about making a career move and that the prospective candidates are pursuing their role for the proper reasons (i.e. not money) and finally the hiring employers must put forth their best offers. Also understand that onboarding efforts before the new employee starts increase the chances of successfully landing the new employee.
5. Additional training of new hires
Employers will have to accept that, in some instances, they will not be able to find a candidate that fulfills all of their requirements. Their best move, given these circumstances, will be to hire an 80%’r (a candidate having 80% of the requirements…read blog post) and train the new hire on the remaining 20%. Those who understand the concept of hiring an 80%’r will end up saving time and money by getting someone contributing in the vacated role sooner. By offering to train a prospective candidate they also potentially give themselves a competitive advantage in the marketplace for talent and quite possibly hire a candidate for less compensation than they had expected.
Some of the challenges that will face employers in the future will be predicted and some will come as complete surprises. It is important for employers to develop strategies to combat the known challenges and act on those strategies. Our view from inside the employment market is unique. We are helping companies overcome the challenges they face every day. Employers who fortify their recruiting and onboarding efforts while taking the time to seek out ways to keep their top performers happy and well trained will be well served.