4 Reasons Why Companies Aren’t Bridging the Talent Gap

October 31, 2016 – Employers across the globe are facing the most acute talent shortage since the recession, according to the latest ‘Talent Shortage Survey’ released by ManpowerGroup. Of the more than 42,000 employers surveyed, 40 percent are experiencing difficulties filling roles, marking the highest level since 2007.

As skills needs change rapidly, employers are looking inside their organizations for solutions, with more than half choosing to develop and train their own people. This represents a significant jump from ManpowerGroup’s 2015 survey, when just 20 percent prioritized training and development to fill roles or find new skills. In the U.S. IT sector, businesses are reporting the most marked talent shortage in a number of years. IT roles jumped from ninth to second place this year, the most marked demand for IT in a decade.

“Low unemployment paired with shorter skills cycles due to the speed of technological change means employers across the U.S. are struggling to fill positions. We see this particularly in industries like manufacturing, construction, transportation and education,” said Kip Wright, senior vice president of Manpower North America. ”When the talent isn’t available, organizations need to turn to training and developing their own people – and in many cases this means first identifying the skills that will be required in increasingly digital industries, like manufacturing.”

Nurturing Learnability

The number of employers training and developing existing employees to fill open positions has doubled from one in five to over half. Fifty three percent offer training and development to existing staff while 36 percent say they recruit outside their current talent pool. Twenty eight percent of employers say they explore alternative sourcing strategies and 19 percent outsource the work.

“Upskilling our global workforce is critical to ensure organizations have the skills they need to accelerate performance and everyone has access to the opportunities on offer,” said Jonas Prising, ManpowerGroup chairman and chief executive officer.

“The best organizations know this, which is why we’ve seen a marked rise in the number of businesses focusing on training and development to fill talent gaps. We expect to see this number grow,” he added. “That’s why we support companies and individuals to nurture learnability – the desire and ability to learn new skills to be employable for the long-term.”

Why Its Hard to Fill Positions

Why is there a growing dilemma in filling positions across the broad spectrum of companies around the world? Four reasons: Twenty four percent of employers say lack of available candidates is the primary cause, while another 19 percent each said lack of hard skills & lack of experience. Another 14 percent reported that candidates were seeking higher pay than being offered, and the remaining 11 percent say the candidates they interviewed lack soft skills.

Talent Shortages by Region

  • EMEA: Employers in EMEA are facing talent shortages that are now at the highest levels since 2006, with 36 percent of employers reporting difficulty filling vacancies, a rise from 32 percent in 2015. Employers in Romania, Turkey, Bulgaria and Greece face the most acute difficulties. Those reporting the least difficulty include Norway, the Netherlands, the U.K. and Ireland. As in every year since 2007, employers in the EMEA region report skilled trades roles as the most difficult positions to fill followed by engineers and sales executives.
  • Asia Pacific: Almost half of Asian employers (46 percent) report hiring difficulties, down two percentage points year-over-year. Japan, Taiwan and Hong Kong reported the most challenges. Just 10 percent of Chinese employers report difficulty, the lowest of all countries surveyed, and a steep fall from the 24 percent reported in 2015. For the first time in 11 years of the talent shortage survey employers are reporting the most difficulty filling IT roles as previously mentioned – up from fifth position in 2015.
  • Americas: Forty two percent of employers report difficulty filling jobs across the Americas – Argentina is suffering the most acute talent shortage (59 percent) and Canada is experiencing the least difficulty (34 percent). The roles at the top of the charts remain the same as 2015; skilled trades positions continue to be the hardest-to-fill in the Americas region, followed by technicians and sales executives. Roles in production are becoming harder to fill, moving from eighth place in 2015 to fourth in 2016. As in other regions, IT positions re-entered the top 10 for the first time since 2012 as the tenth hardest jobs to fill in 2016.

Inadequate Talent Supply

Numerous reports continue to come out citing that lack of quality talent is an issue among companies despite a large amount of people seeking new employment opportunities.

The inadequate supply of qualified and skilled talent is the second-biggest threat to U.S. companies’ ability to meet revenue or business performance targets, second only to “increased competitive pressures,” concluded a recent Randstad ‘U.S. Workplace Trends’ report. Nearly eight-in-10 hiring decision makers (79 percent) agree that when positions become available at their organization, they struggle to find people whose skills match the job requirements.

“Often the challenge for hiring executives isn’t the quantity of available candidates, instead it’s the increasing difficulty in finding talent that is qualified, with the right skills and cultural fit for the position,” said Jim Link, chief human resources officer (CHRO) of Randstad North America.


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People are the key factor linking innovation, competitiveness and growth for companies today, he said. “But securing skilled workers is getting more complex and challenging than ever before.” As organizations further increase their hiring activity, he added, low unemployment means business leaders will have to work harder at hiring and keeping quality talent particularly as employees gain more options and confidence to change employers.

Ninety-five percent of recruiters expect finding new talent to be as or more challenging in 2017 as this year, according to the latest ‘Recruiter Nation Survey’ conducted by Jobvite. Corporate recruiters cited a lack of skilled candidates (65 percent) and dealing with hiring managers moving candidates through the hiring process (48 percent) as their biggest challenges.

Recruiters expect competition for talent to be in the most demand within hospitality (87 percent), manufacturing (79 percent) and healthcare (78 percent).

To keep up, the Jobvite report found that in-house recruiters are offering both traditional and non-traditional incentives to lure candidates, like raising salary offers (68 percent), awarding monetary bonuses to incentivize referrals (64 percent), allowing for flexible work hours (44 percent), and implementing a casual dress code (44 percent).

Job creation has been “steadily increasing” ever since the recession, “forcing corporate recruiters to double up their efforts to fill positions with quality candidates,” said Dan Finnigan, chief executive officer of Jobvite. “But there simply aren’t enough educated, talented and qualified candidates to keep up with the demand.” As a result, he says, “these recruiters must now go above and beyond by helping to create compelling employer brands and an exceptional candidate experience to keep their clients happy.”

According to a recent Right Management report, companies are struggling to find people with the precise skills or combination of skills they need. Over one third of employers worldwide said they were having trouble filling positions due to lack of suitable talent.

As the global demand for highly skilled labor continues to grow, the Right Management report suggests that leaders will need to align their talent strategies with their business strategies to ensure that they have the right people in place, and rethink old assumptions about work models, people practices and talent sources.

“As the struggle to find the right talent continues, and candidates with in-demand skills get the upper hand, employers will be under pressure to position themselves as ‘talent destinations’ to attract the best workers that will drive their business forward,” noted Kip Wright, senior vice president, Manpower North America.

With the U.S. unemployment rate recently reaching an eight year low, competition is fierce for skilled talent. “That means it’s more important than ever that companies resolve to invest in the recruitment and development of top talent and explore creative, progressive staffing solutions,” said Joyce Russell, Adecco Staffing USA president.

Hiring Plans Modest Despite Lack of Talent

Twenty two percent of U.S. employers anticipate increasing staff levels during this final quarter of the year, according to the latest Manpower ‘Employment Outlook Survey.’ This is a one percent decrease from the third quarter and a one percent increase from Q4 of 2015. Six percent of employers expect workforce reductions and 69 percent expect no change in hiring plans. The final three percent of employers are undecided about their hiring intentions.

“Employers are optimistic, though hesitant, with their hiring intentions and we’re pleased to see levels we were seeing before the recession,” said Mr. Wright. “While employers are looking to grow their workforces, many are challenged to find candidates with the right skills. As the hiring outlook continues to improve, attracting and retaining skilled talent will become even more difficult. That’s why we’re hearing more about companies like AT&T and Marriott that are adopting strategies to develop their employees’ skill sets and competing to attract those with the most in-demand skills – especially in industries like IT and engineering.”

A More Upbeat Outlook

A recent CareerBuilder study found an even brighter outlook with 50 percent of employers planning to hire full time, permanent workers. Another 29 percent of employers plan to hire part-time employees, on par with 28 percent last year; and 32 percent of employers plan to hire temporary or contract workers, down slightly from 34 percent last year.

“Based on our study, the U.S. job market is not likely to experience any major dips or spikes in hiring over the next six months compared to last year,” said Matt Ferguson, chief executive officer of CareerBuilder. “While certain industries or locations may produce more job growth, hiring overall will hold steady throughout the election season and through the end of the year.”

“The economy continues to power forward despite the uncertainty and geopolitical risks out there in the world,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “The economy is moving forwards, not backwards.” Let’s see if this remains the case after Election Day on November 8.

Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media

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