September 25, 2018 – Today’s employers must contend with a perfect storm of talent supply and demand challenges. Unemployment rates hover near historic lows. New technologies raise the demand for new skills. Many older workers are retiring, and companies face new competitors in the race to acquire talent while retaining the workers they have. For employers, embracing practices to address those challenges is essential.
Eighty percent of employers have experienced challenges with acquiring critical talent because of changing global labor markets, according to a new report by Allegis Group. The biggest factor contributing to such challenges is economic environment, said 55 percent of those surveyed, followed by demographic shifts (32 percent), social factors, such as generational differences and pressures for social responsibility (31 percent), technology disrupters (27 percent), regulations (24 percent) and political volatility (10 percent).
“With low unemployment rates, shifting skill demands due to the impact of new technologies and ever-changing socio-economic and political factors, employers must be proactive in addressing talent shortages head-on,” said Allegis Group’s director of labor market business intelligence Ron Hetrick. “Responding effectively to the global talent shortage will require a clear and comprehensive understanding of the global forces at work.”
The Global Workforce Trends report draws on a broad array of industry data, extensive research, insight from workforce strategy experts, and findings from a global survey of nearly 700 talent acquisition stakeholders around the world. The result is a practical view of the trends that influence every employer’s ability to acquire talent.
The changing talent landscape is affecting how organizations acquire the workers they need, said the study. Highlights include:
- IT (37 percent) and engineering (33 percent) lead the list of in-demand skills.
- Nearly two-thirds of companies (65 percent) have had to adjust business strategy because they could not secure the right talent in a specific function or geographic area.
- More than a quarter of companies (26 percent) are not confident they know the true market value of the skills they seek. The top challenges in understanding that value are job definitions and requirements that vary across different departments (48 percent) and a lack of defined success metrics (42 percent).
The report highlighted several notable trends around the world. Demand for talent in the U.S., for example, continues to be strong, setting record highs this year. Openings have risen about 16 percent between 2017 and 2018, and May of this year marked the first time in U.S. history that the number of jobs exceeded the number of jobseekers.
In Europe, the U.K.’s planned exit from the European Union and high unemployment on the continent are driving talent trends, the Allegis report found. Brexit remains the most significant factor molding the U.K. labor supply landscape. If Brexit causes an exodus of skilled people and positions, the benefit may go to countries such as Germany, the Nordics and the Netherlands. In France, both high-skill and low-skill industries are expanding, said the study, yet the unemployment rate remains elevated. In Spain, the unemployment rate is even higher, and employers seeking skilled talent may experience sourcing difficulties because of shortages in certain fields.
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In Asia, Japan’s most recent economic data suggests the country needs more workers. In fact, indications are that the aging of Japan’s population is accelerating. Deaths now outnumber births by an average of 1,000 per day. In contrast, India benefits from a large supply of new workers but struggles to develop the skills needed to keep up with the demands associated with evolving technologies. The report provides additional insight into these countries and more across the EMEA and APAC regions.
Tips for Responding to Changing Talent Markets
Based on extensive talent management experience and original research, the Global Workforce Trends report said that organizations should respond to the talent shortage by focusing on three critical areas:
“First, they must improve visibility into the demand for critical skills and the supply of available talent,” the report said. “Data analytics coupled with new technologies enable employers to bring together data from disparate sources and leverage them to make informed decisions on key topics ranging from compensation, ideal geographies for available skills, timelines and work models best fit for certain roles.”
The second priority is to boost talent acquisition effectiveness, said Allegis Group. Flexibility, job requirements, automation and recruiter specialization are all factors in competitive talent acquisition. Finally, companies must protect the talent within their organizations. Two areas of increasing importance for retaining employees, especially among Millennials and Gen Zs, lie in creative career paths and placing a strong emphasis on learning and development.
“In times of talent scarcity, employers will need to take an employee-first approach when searching for tools and developing recruitment and retention strategies,” said Mr. Hetrick. “This report is intended to guide and inform HR and business leaders as they develop those crucial talent management strategies.”
Three Measures to Retain Great Talent
Several employee relationship pitfalls can cause a worker to leave an organization, said the report: The worker may feel that their career priorities are going unaddressed, so they seek opportunities that better reflect their needs.
“They may leave because they feel they’re at a career dead end with few new contacts or too little training,” said Rachel Russell, global head of corporate strategy at Allegis Group. “Or, they may grow out of touch due to a lack of communication and seek another opportunity where they feel more connected. Our experience at Allegis Group has taught us that each of these three types of issues can be mitigated if the employer invests the time and effort to improve the employee relationship.”
The report offered three measures to retain top talent:
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First, develop relationships that treat employees as individuals. A highly competent employee, for example, may want autonomy and desire to avoid travel. That person may only be interested in receiving a merit increase and being left alone. In the same department, there may be another employee in a similar role who values travel and interaction with colleagues and will not feel successful unless she earns a new title every two years. These are two entirely different sets of priorities, but organizations that learn about and address the unique needs of both individuals will have an advantage in keeping them onboard.
Second, empower workers to develop the networks and skills to advance their careers. In our company, said Allegis Group, we will reimburse employees for work-related lunches and encourage employees to network at the organization’s expense. We’ve seen how an individual can build a network and use that network to move to a new career level or direction that she would otherwise achieve only by leaving for another employer. Along with networking, an investment in worker training has a tremendous influence on retention. The employer must make education a priority and accept the investment of time and budget that is needed to provide training to its workers. The returns, in terms of improved skill-sets and employee engagement, make the investment well worth the effort.
Third, make an active effort to close communication gaps. To prevent those gaps when we place our talent within client organizations, we make communication with the candidates placed a part of the recruiter’s daily process, said Allegis Group. We support that capability with our automated customer engagement solution to reach out to our talent at predetermined touch points, based on data that tells us when a worker is likely to start looking for their next job. Likewise, we have a front-end “welcome journey” to walk the candidate through the onboarding process, with a feedback system that enables us to track their satisfaction with the job. In every case, communication is being made part of a systematic, repeatable process that is key to keeping our talent engaged and available to meet our clients’ needs.
“Together, individual relationships, empowerment for career development, and consistent communication all play a role in keeping great talent connected and engaged with their work,” said Ms. Russell. “Through stronger employee relationships and reduced attrition, organizations can position themselves to gain an advantage at a time when critical talent is a main driver of business success.”
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