Why the Global Talent Shortage Might be Here to Stay

Gabor Varjasi, chief human resources officer (CHRO) at the Hungarian Post in Budapest, discussed key trends in global recruiting with Hunt Scanlon this week. His conclusion: get used to the ongoing talent shortage around the world.

February 9, 2018 – These are tough days for finding talent in virtually every market sector around the world. And, according to top global HR leaders and executive recruiters, it is a situation that is unlikely to improve anytime soon.

Better economic times, low unemployment and technological innovation have all been a blessing. But how to fill the jobs that are being created and that are necessary to continue to drive progress is a question that is keeping hiring managers, and recruiters, awake at night. Compounding the problem is a parade of older workers who are marching into retirement, and taking their valuable experience and skill-sets with them, followed by Millennials who seem to be as fickle as the weather.

But times are also changing in so many unexpected ways. Pay and benefits are no longer enough to attract and keep good employees, especially those Millennials and other up and comers. Instead, companies must offer the kind of career and workplace culture that fulfill their workers’ needs both in their work and personal life.

That means engaging them from the first point of contact through the entirety of their employment, and then beyond if employer branding gets worked into the equation. It also means creating new work environments that meet the need to grow professionally and to more quickly integrate into a company. And, it means helping all employees find a suitable work-life balance, be it through telecommuting, a compressed work week or any number of other strategies.

Related: Hiring Pressures Mount as Talent Supply Tightens

Gabor Varjasi, chief human resources officer (CHRO) at the Hungarian Post in Budapest, Hungary spoke with Hunt Scanlon Media recently to discuss major trends in global recruiting. Like many of his other contemporaries, he is most concerned about the talent shortage, both present and in the future. As a result, he spent considerable time learning how best to recruit and retain good workers. He also knows the consequences of hiring bad ones.

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The Hungarian Post is Hungary’s postal administration. With 30,000 employees, it is one of the largest employers in the country. Mr. Varjasi has the weighty job of directing and aligning the organization’s human resources strategy with the overall operation’s big-picture plans and goals. He came to the job in 2017 after several years with Monsanto Company, where he was the commercial HR business partner lead for Europe and before that HR lead for Central and Eastern Europe. He’s also been an HR leader with MOL Group, an integrated oil and gas company in Hungary, and one of Central Europe’s largest corporations.

Gabor, give us your best crack at the current state of hiring from your perspective as a global CHRO.

I feel like hiring great talent is tougher than at any time before! We should be getting ready for how much harder it will be in a few years because the talent shortage problem is deepening. New jobs are emerging in the U.S., Europe and Asia and Africa is also developing by tremendous investments in banking, the telecom sector and a number of others. So, from a macro prospective there is a massive aging problem ahead of us in Europe, Japan and other countries and therefore in an upcoming economic growth period that we’re likely entering and will likely sustain for years I think we’ll have less talent to go around and for which to hunt. Company talent pools are shrinking, and competition is getting more intense. The only way to get ahead of all this is to understand as best we can the trends that are shaping how organizations should and could recruit in the coming years. Let me share an example: data, what I like to call the new corporate superpower, will need enormous numbers of data scientists and with them will come an unstoppable rise in the use of artificial intelligence. For anyone connected to HR, you better get more informed very fast about the challenges as well as the opportunities coming. AI will soon infuse every aspect of HR. We’re simply not ready for this, especially on a global scale.

Related: Talent Shortages in Asia Give Rise to Unique Glass Ceiling

What can organizations do to prevent themselves from losing out on top talent?

From my point of view only job satisfaction and having attractive prospects at any given corporation will increase the retention rates of top talent. A strong company vision that connects you as an employee to something bigger than you – this could be one secret weapon for retaining your very best people. This is especially true of the current younger generation and the next one in line – this talent simply doesn’t stick around longer than two to three years at one workplace. What they need is vision and a good reason to stay. The best employers will be those that provide this vision. Personally, I am a big believer of creating and managing career roadmaps – helping employees empower their own talent and offering them the ability to create their own career roadmaps. Empowerment is now the name of the game. Empower your talent and you will give your organization a big competitive advantage.

“Hiring great talent is tougher than at any time before! We should be getting ready for how much harder it will be in a few years because the talent shortage problem is deepening.”

Explain some of the ramifications companies face when they make a bad hire?

Financial cost of bad hire could easily calculated by summing up all recruiting & selection cost and time invested into the process by HR and the hiring managers. Above that I think there is even frightening effect on the company culture. Poor performers lower the bar for other employees, and bad habits spread like a virus across even departments. The sad news is that even after removing the given poor performer/gossiping etc. employee from the firm, we still had to invest time and resources to reset the behaviors of team members and put the department back to the right track.

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What are some key ways to retain top employees in this candidate-driven job market?

We as leaders must create trust with the talent we’ve been fortunate enough to oversee. To me, creating this bond of trust is the No.1 key to retaining them. In a trusted work environment talent will grow faster and stay longer. Of course, in today’s world more and more employees are remotely located, and they beckon from many different cultures, and the primary relationship is virtual – and, frankly, that is a threat. But here’s the resolution: communicate, communicate, and communicate! Use all the opportunities that are available: WhatsApp, Viber, Skype, you name it. Naturally, beside these work in some good old-fashioned face time with people – at least every three to four months I suggest you meet up in person. Another key is to establish clear performance metrics and make employees accountable for deliveringThis might sounds so basic but it does work. Review performance versus those metrics on a regular basis. Creating a feedback culture is the basis of forming a trusted work environment – performance reviews, done often, create an objective platform for that.

From a hiring perspective how do you expect 2018 to shake out from a global economic standpoint?

More and more countries are delivering positive economic news every week. But such a deluge of good news moving in one direction raises the question of how sustainable growth can be with a talent shortage in high gear. We cannot expand without people. So, I expect pressure to remain on finding and retaining talent across Europe and U.S. Asia, on the other hand, is becoming more and more attractive on the global labor market. It’s going to be a bumpy ride into the future!

Related: Companies Adjust to Candidate-Driven Job Market

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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