Today’ Talent Shortage Is Long Term. Are You Prepared?

Talent shortage is long-term

The US now has had 22 months where there are more job openings than unemployed people. According to Manpower’s last study, 69% of US companies struggle to find workers. This trend will continue in the US for a long time due to structural factors such as an aging workforce, low birth rates, and the difficulty with automating professional services roles. Companies need to act now to put in place long term strategies to win the war for talent in the digital age.

The US workforce is aging, with a birth rate that is one of the lowest in the world, and immigration that is flat (because it is a political football). Making matters worse, America’s 73 million baby boomer, technically-skilled workforce is steadily retiring. Some experts point to automation as a solution, but while manufacturing has been automated over the last 40 years, the US economy is filled with professional services jobs that are hard to automate.

The Conference Board believes that this “aging workforce” problem will slow the US GDP significantly in the future, leading us to the stagnation problem Japan has experienced for years.

US Companies need to put in place long-term strategies to recruit and retain the workforce they need.

 

Below are eight long-term solutions to recruiting and retaining the workforce you need:

 

Build Your Brand! Every company should have an employer brand to match with their investor and customer brand. The brand needs to speak to the cool work your employees do and how it carries a higher purpose for humanity. As well, you need to be transparent about your pay, benefits, and work culture, having employees speak to these issues on your career site.

It is essential to track and respond to the comments made about your company on websites such as Glassdoor. More than 70 percent of job seekers read up about a company’s leadership, pay and benefits, and work culture before deciding to apply for their jobs. Some executives I speak with dismiss any criticism or a score below 3.5 as the work of malcontents and complainers. Perhaps so, but when that criticism is read on the internet without any response from the company, it is believed as truth.

 

Offer Competitive Pay and Benefits. You are not going to win the war for talent on the cheap. Workers know there is a shortage and are getting better at negotiating for more money. Moreover, millennials are maturing and are choosing employers that offer subsidized health care, 401ks with a company match, and good paid time-off policies, including paid time-off for paternal leave for both genders. Women are looking for companies that have transparent pay practices to guard against pay inequity and work cultures that feature great onboarding, coaching, collaborative teams, empathetic leaders, and career development.

 

Move with Speed and Digitize Your Work Processes! The early bird does get the worm, and the company that responds quickly to its job applicants, assesses and interviews them has a higher success rate in getting accepted job offers. Speed means having leaned out hiring processes. To win the war for talent, it is critical that companies clearly define their hiring processes, provide exacting clarity of everyone’s role in the process, train them for their roles, and measure their success. After leaning out your processes, then it is wise to invest in digital technology. With the digital technology available, companies can have  processes that move at digital speed to assess and interview job applicants and promptly offer them jobs.

 

Fix the Bad Experience. According to Deloitte, 83% of job applicants rated their job search experience as poor. According to The Talent Board, the average time it takes a job applicant to complete a job application is an hour. One-third of applicants will quite the process if it takes too long. Worse yet, over half of job applicants never hear back from a company regarding the status of their application.

It doesn’t have to be this bad. With the digital tools available in today’s applicant tracking systems and chatbots, companies can significantly improve the job applicant’s experience. Today’s chatbots can let job applicants know within seconds of a decision in the applicant process (such as being recommended for an interview). And if the job applicant is a bad fit, can recommend the candidate to another open job for which they are better suited.

Companies working with the chatbot AllyO have seen their net promoter score for job applicants soar to more than 90%. Think about that. Even among job applicants who are denied a job, they feel so good about the process, they are willing to recommend their friends apply for a job at that company.

 

Interview well! Despite the empirical evidence that has been available for years, many interviewers conduct an unstructured, “gut feel” interview of less than 30 minutes. In many cases, the interviewer succumbs to their own unconscious bias within the first five minutes of the interview and then spends the rest of the interview looking for a reason to believe their bias. It is a poor way to select talent. Recruiters and hiring managers would be better off using structured interviews. These interviews have a pre-set list of questions to better understand the job candidates’ work history, what work cultures they are best suited for, their values, their technical job skills, and their ability to collaborate with coworkers and suggest new ideas. Switching to structured interviews can nearly double a company’s ability to hire great talent.

 

Use Validated Assessments. Be sure to take advantage of either job skill assessments or work sampling to determine if job candidates have the skills required on the job. Whether you have openings in engineering, administration, human resources, finance, or sales and marketing, assessments tools (that have been validated to demonstrate their unbiased effectiveness at hiring great employees) can significantly improve your hiring success rate and reduce your employee turnover.

 

Target New Entrants to the Workforce and Retain Those Over Age 55. The US has many new entrants to the workforce every year, such as the 4.5 million new college graduates entering the workforce every year. But you better approach them with a digital strategy as they are America’s first truly digital natives and expect the workplace to have the latest digital technology.

In addition, there are more than 240,000 US veterans leaving active duty to join the workforce. While they often need help transitioning to today’s dynamic work cultures, once this transition is made, they are often some of the most loyal workers.

The US also has more than  70 million formerly incarcerated workers. That staggering number is larger than the population of France. With new federal legislation, companies can earn a $2,400 federal tax credit for each formerly incarcerated individual hired. There are limits on jobs some formerly incarcerated can hold based on their crime (such as those with SEC violations cannot work as stockbrokers or in finance). During screening of the formerly incarcerated, look for those who taken advantage of programs to reform and reskill themselves. These workers are also very reliable and loyal. You can recruit them directly by posting jobs at 70millionjobs.com.

Companies can also make great headway hiring new mothers or workers over the age of 55 that are ready to re-enter the workforce after tying retirement, and the disabled.

 

Reskill Your Current Workforce. It is actually cheaper to reskill your workforce than to recruit in today’s environment. It can cost $4000 to recruit an entry-level worker and only one-third of that cost to retrain a worker. In the workforce of the future the average worker will change employers ten times and careers six times over their careers. Companies that learn to reskill their workers for today’s agile work environments will be the ones that win the war for talent, by hanging on to their talent for the long haul. More importantly, companies need to put in place learning and collaborative cultures to retain their best employees.

 

The tight talent economy in the US is long term. Companies that build up competitive talent strategies to attract and retain their best workers and align them to their employer brands will win the war for talent.

 

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and managing partner of InnovationOne. He works with companies to improve their recruiting, HR operations, and develop extraordinary leaders, teams, and cultures of innovation. His new book is Hack Recruiting: the Best of Empirical Research, Method and Process, and DigitizationSubscribe to his weekly blogs at www.VictorHrConsultant.com.

 

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