Changes in technology have pushed millions of people out of the workforce. Rapid changes in businesses impact skill demand. As job demands increase, new skills emerge, making some outdated. Many companies are dealing with skills shortage issues.
According to the Society for Human Resource Management (SHRM), 83 per cent of businesses struggle to find workers with the right skill sets. Talent has become scarce, and without the right recruitment strategy, the pool may dry up.
Hiring talent with the right skill set is proving more challenging for companies today. In this blog, we look at how recruiters can change their hiring strategy and overcome the skills shortage.
Focus on Hiring the Right People
When recruitment and staffing face new and tougher challenges, it's critical to hire the right people the first time. Skills shortage is likely to lead to increased competition for talent. As companies compete, finding the right talent will take months of headhunting.
It can be a challenge finding a candidate in a small pool of talent. All companies going for the available talent complicates the problem further. Candidates will have more say in recruitment, and the cost of headhunting is likely to go up.
Battling for the available talent doesn't mean the winner gets the right candidate—the risk of hiring the wrong employee increases as the talent pool shrinks.
Paying close attention to the recruitment process a strategy to find suitable candidates should be the focus of each HR manager. While talent pools shrink, the need to become competitive increases. Only by finding the right candidates can companies survive skills shortages.
Use Tools to Find Quality Talent
The big challenge is how to find the right talent amid shortages. We engaged experts on the right method for improving the hiring process. Many agree with Xref that the best way to hire right is to make the recruitment process smarter.
The top recruiters tend to master the technology they need to compete with other companies. Xref enables candidate background ID checkups through AI-powered employee analysis tools. This is one step to start continuous talent searching and ensures you hire the right people.
You need this technology to combat the challenge of fishing from a small talent pool. In this age, successful recruitment processes are tracking local and global talent.
Xref comes in handy during hiring through automated reference checking. Reference checks can spot the validity of a candidate's skills and help to weed out more wrong candidates. One study showed that hiring managers knock out 20% of candidates after reference checks.
During interviews, cases of dishonesty do happen. So it's always important to go the extra mile to counter-check a candidate's credentials with their referee. Automating the process with Xref allows for speedy mass reference checking.
Aim for High Employee Retention
As hiring managers, you know losing current talent is costlier than adding new ones. According to Josh Bersin of Deloitte, losing an employee can cost as high as 1.5-2 times their annual salary.
If you're hiring the right people, you need to ensure your talent stays in your company for many years. 24% of Australian employees are actively looking for other employment opportunities. Skills shortage sometimes coincides with employees looking to leave their current jobs.
Nearly 29% of the workforce cites "depressing work" as their primary issue at work. Before creating an employee retention plan, try to figure out more reasons talent loss is rising. Where are you getting it wrong? Smart recruitment efforts go to waste if you're not keeping employees.
Before creating an employee retention plan, try to figure out more reasons why talent loss is rising. Where are you getting it wrong? Smart recruitment efforts go to waste if you're not keeping employees.
Identify Reasons for Low Retention
Employees typically have common reasons for why they leave a job. Keep reading for some of the reasons companies are losing employees.
1. Poor Quality of Management
Listening to individuals helps when you want to get to the root of their frustrations. On the other hand, neglecting employee concerns can lead to frustration and a lack of loyalty to employers.
2. Challenging Work-Life Balance
Lack of work-life balance and management quality makes employees feel disoriented. Employees expect systems and processes that support work-life balance. Many want to see increased appreciation and incentivisation to reflect their hard work.
3. Not a Good Cultural Fit
Employees may leave their roles due to a lack of a cultural fit. 75% of Australian companies have lost an employee due to a cultural mismatch. 66% of managers have said they have at a point misjudged a job candidate's suitability to their culture.
4. Lack of Career Development and Job Growth
40% of departing employees cite lack of career development as the reason behind their workplace drop in effort and attrition. Brian Kropp, Gartner HR practise group vice president, said you need to invest in an employee's future. If you don't, they're going to look for other career opportunities.
How to Improve Employee Retention
As competition for talent increases, it becomes more important to make existing employees happy. You won't have to worry about competition if you can train and promote people in-house more often. Here are some tips to keep your employees.
1. Offer On the Job Training
Understanding employee needs is one way to address skill shortages. Augmenting employee skills is thus a no-brainer part of any effective talent strategy. Employees that get free on-the-job training tend to enjoy their jobs.
Impacting employees with missing skills is an effective way of sealing existing gaps. It's also a win-win for employers and employees. Only go to the market to look for talent when you can't build it in-house.
2. Pay Competitive Salaries
Many employees are only looking for fair compensation for their skills. It might be tight on your budget to increase their salaries. However, doing it goes a long way to save replacement costs.
Better paying opportunities can trigger even the most loyal employees to jump ship. It can cost up to 50% of a new employee's salary to replace an experienced staff. Beyond that, a competitive pay structure helps you to attract top talent.
3. Recognise and Reward the Best Talent
Handsome salaries are not enough to keep the top talent. All HR professionals know money is not always the motivation for many employees. Innovative staffs are more driven by intrinsic rewards and signs of appreciation.
4. Create the Right Culture
Do in-depth background checks to find employees whose values match your company's. Always create the right working environment to attract the right employees.
Keep Up In Touch With Your Talent Pool
A recruitment process is an opportunity to build a backup of talent. Yet, few HR teams know how to maximise it. The talent that drops out after filling an advertised role is often discarded.
Proactive HR professionals are using technology to build talent pools that they can resort to during headhunting. A talent pool is a group of passive candidates interested in your company but didn't pass screening. Writing off or forgetting about this talent is a common hiring mistake.
As time goes, a talent pool gains a range of skills that your company may need. A talent pool evolves and can be the best way to overcome skills shortages if you make the best use of it. It can speed hiring by allowing the HR team to identify the right talent quickly.
Xref eases the process of building your talent pool. The Xref people search tool adds potential passive talent to your database and allows you to run real-time searches to find your candidate. Beyond that, the database can accommodate willing reference providers who can always link you up with new and budding talent.
Align Talent Sourcing With Workforce Trends
One cause for talent shortages is the increasing shift of the workforce to the gig economy. Back in 2015, an Upwork study showed 4.1 million Australians were freelancers. This was 33% of the workforce.
Remote working necessitated by the pandemic also gave almost the whole workforce the experience of working from home. Since then, more full-time workers have drifted to freelancing. The flexible lifestyle that comes with working from home is an attractive proposition for many workers.
With all these workforce changes, skills shortages are set to continue. Many workers may not appreciate the traditional 9-5 working lifestyle and prefer to work from home. To cope, hiring managers need to rethink hiring and the composition of their workforce.
Proactive HR teams adapted and built backups of virtual workers. It's also beneficial for organisations to change structures. This includes accommodating the needs of remote workers.
Another change is the generational shift seen in every workplace. A large ageing population is worsening the skill shortage issue. But HR managers could look at the good and hire seniors as freelance consultants.
More than 1 million over 65's chose to continue working part-time and consultancy in the UK. Such staff could help to mentor and apprentice junior employees even if they don't work full-time. They have the experience and the skills to help companies survive a shortage of skills.
Use Xref to Combat Skills Shortage
HR teams need to build smart recruitment strategies and processes to fight against skills shortages. Referencing checks can help to identify the right skills and ensure it matches the company's needs. Proactive organisations that track and stay in touch with talent will have the upper hand during recruiting.
Get ahead of the competition of finding great talent with Xref. Hire right and have a pool of talent to call upon whenever you need to refresh or augment your team. Book a demo to learn more about how we can help.