If you’re like me, you’re probably sick of hearing so much lately about a supposed talent shortage. Much of that hype has focused on the fact that with unemployment down and hiring demand up, we’re in a candidate driven market (or are at least heading for one).
Of course, I’ve heard it will be a minor blip on the big picture radar, and I’ve heard it will be the biggest deal for recruitment since the invention of the internet, depending on what media report I happen to be watching. When it comes to the topic of talent supply and employer demand, seems everyone has an opinion, but no one really seems to have very much in the way of supporting evidence.
Of those plentiful predictions proliferating out there about this proverbial skills gap, the most dire comes from none other than The Conference Board, who predict labor conditions will remain tight for the next 15 years. Considering the source here are some smart, well-informed people, this should perhaps come as cause for some concern.
Think recruiting is tough now? Seems we’re potentially just scratching the surface.
Mind the Gap: A Big Data Approach to the Talent Shortage
Here at the McQuaig Institute, we recently surveyed 453 global HR professionals to get a better understanding of what the talent market’s really like today, what’s really working and what’s really keeping them up at night.
The results reveal a fascinating look behind the curtain when it comes to how companies are actually being impacted by a talent shortage, and what they’re doing to overcome those critical talent management challenges.
The results provided some really interesting insight, and our survey suggests some critical things that companies who are succeeding in overcoming the skills gap and hiring hard to find talent are doing differently from competitors who might be struggling.
I think that these distinctions – and the results – provide a potentially valuable roadmap for navigating the talent shortage today – and tomorrow.
First, let’s look at some highlights from the survey and see what the results had to say about this supposed talent shortage and whether or not it’s having a real world impact on the way companies find, attract and engage top talent.
As the chart on the left suggests, our survey found:
- 36% of HR professionals say it’s harder to fill positions now than it was one year ago.
- 56% of HR professionals say it’s about the same as it was a year ago.
- Only 8% of HR professionals said it was easier to fill vacancies year-over-year.
A year ago, about the same number of HR professionals felt filling positions was getting harder (up incrementally from 34% in 2014), but in 2014, fully 28% felt they thought hiring was getting easier, versus 8% today.
That’s a pretty significant percentage – and suggests to us that a talent shortage is not only real, but starting to actually have a significant business impact for many employers, particularly in some select market segments.
Solving the Talent Shortage: What The Winners Are Getting Right
I know that for all the people who actually live through this stuff every day, you probably just gave the survey statistics I cited above a collective “duh, dude.” You don’t need numbers to support how hard hiring has become, and for you, it’s not news, it’s something you deal with every day. Fair enough – I probably deserve that response, but at least you know where I’m coming from (and vice versa).
Some of the results told us some really surprising things about the talent shortage; specifically, the results I found among the more interesting uncovered by the survey pointed to not only some very specific things employers are doing to address a talent shortage, but also, what the best ones are doing differently.
To keep my terminology consistent with the language in the report, I’m going to be referring to these two distinct groups as “Winners” and “Strugglers,” respectively.
We asked the HR professionals responding to our survey about what recruiting strategies they were using to compete for, and win, the war for talent.
Their responses showed employers were consistently leveraging three recruiting strategies more or less across the board. Increasing and investing in existing employees (and promoting from within) stood out as the most commonly adopted strategy employers currently have in place for addressing the talent shortage.
We asked respondents to tell us about the recruiting strategies they were using to find quality candidates in this market. We found that companies are using an average of three strategies to help win the war for talent, the top one being looking more inward and investing in existing employees.
See the below chart for a full breakdown of how these steps stack up:
Interestingly, the Winners are much more likely to be investing in training existing employees. 75% of Winners reported adopting this recruiting strategy, versus only 55% of the total survey sample. This could signal that this strategy is already paying off, with the Winners realizing significant returns on this employee development investment.
Employers not already actively allocating resources in their existing workforce should probably consider doing the same and upping their own investments to have any chance at competing at successfully overcoming the talent shortage.
One other result the survey found Winners were more likely to have already adopted as part of their recruiting strategy is offering some sort of flexible work arrangements to their current and potential employees, flexibility that extends to having more freedom to tweak job descriptions and titles than their counterparts.
A Word On Millennials
I know you were waiting for it. So, there’s your gratuitous, but required, mention of Gen Y and how they fit in, but in this case, there’s actually a really interesting connection – I promise I’m not just talking about millennials just because it’s what you do when you talk about recruiting these days.
Our survey asked employers what roles they’re having the hardest time filling. Survey says?
Specialized Technical Roles (54%)
Senior Executives (19%)
We expect to see the numbers for mid managers continue to rise in the years to come as Boomers retire, effectively creating a vacuum within most organizations, as employers just don’t have enough Gen X workers to fill the vacancies left behind. This means that Millennials as the only successor for many mid-level roles, and employers will need these workers to step up if they want to have any hope of success.
The Best Sourcing Channels for Solving the Talent Shortage
Both our research and anecdotal evidence suggest that Gen Y places a high premium on these internally focused investments, with most Millennials looking for employers offering training & development opportunities, a clearly defined career path, ongoing coaching and continuous feedback.
The good news is, they want exactly what companies increasingly realize they need to be giving them. So in this case, it’s really a win-win for everyone, yet another salient selling point in an already pretty overwhelming business case for internal training.
We could also speculate – and what the hell, I might as well do so – that our Winners ease the pain of replacing retiring Boomers with external candidates by providing effective enough programs and initiatives aimed at developing existing employees to make sure that they don’t always have to look for external candidates for highly skilled or hard to fill positions.
Makes sense internal mobility produces outcomes than relying on such a tight market for filling so many openings.
We also asked employers which channels they most commonly utilized for sourcing, and which delivered the best results and highest quality candidates. This also suggested another key difference between the Winners and the Strugglers: employee referrals. 94% of the Winners report utilizing referrals from existing employees as a key sourcing tactic, vs 83% of the total employer sample.
With referrals, though, there can be too much of a good thing, as the Strugglers were often forced to turn to agencies as their next best bet when their existing employees failed to deliver the recommendations upon which their recruiting process so heavily relied.
The Winners, by contrast, consistently found the same caliber of quality candidates across their three primary sourcing channels, which our survey suggested were employee referrals, online job boards and social networking sites (see chart).
we see that those having more success are much more likely to be using employee referrals (94% vs. 83%) and are getting pretty even results across three channels in terms of quality of candidates (employee referrals, online job boards, and social networking sites), while the Strugglers are heavily reliant on employee referrals for quality candidates and then looking at external agencies as their next best bet.
We all know how valuable employee referrals are, and while they’re like gold, they’re also inherently low volume. This is why it makes sense employers are investing in alternate channels to cast a wider net while increasing the effectiveness of other channels and optimizing those to ensure all sources consistently deliver higher quality candidates. If that is, indeed, what is happening, as our survey suggests – and it does so quite strongly, in fact.
Could Social Recruiting Solve the Talent Shortage?
Some results that were really striking from our survey was the jump in the perceived effectiveness of social media for helping hiring – and the huge difference in results between the Winners and the Strugglers from their social recruiting initiatives stem from very different approaches to these channels.
Take a closer look at how each uses social media differently:
The Winners are more likely to see social primarily as an engagement channel, and focus most of their efforts on connecting with existing employees, connecting with their networks and nurturing passive candidates across multiple channels, targeting qualified talent through dedicated pay-per-click and online advertising strategies – these ads could be simply a posted job description or some sort of rich media content like video or retargeted content.
Strugglers on the other hand, spend their time searching for candidates on LinkedIn. The results speak for themselves. For me, these findings reinforce the fact that the inherent strength of social for recruiting is really in facilitating engagement and building employer brand.
The companies doing it right successfully develop targeted personas and tailored content based on their ideal candidates, enlist employees as brand ambassadors and advocates, and use social to strengthen relationships with passive candidates and find better culture fits. Blasting out job ads and using the search box on LinkedIn aren’t social recruiting strategies.
They’re something that the Winners avoid almost as much as the candidates they’re looking for – candidates who are becoming increasingly savvy, and increasingly selective. After all, as much as the talent shortage stinks for recruiters, it’s a pretty good time to be on the other side of the market. For once.
If you’d like more of the top insights and takeaways from our global survey, click here to download the complete report from The McQuaig Institute. Trust me – these only scratch the surface.
About the Author: Ian Cameron is the Managing Director of The McQuaig Institute®, an International Organization committed to helping companies assess, select and develop talent.
Ian has more than 20 years of Human Resource and Organizational Development consulting experience. Throughout his career Ian’s focus has been on helping organizations realize their goals through their people and helping people live their passion through their work.
Ian has facilitated workshops on implementing organizational change, leadership development and sales and customer service improvement to hundreds of managers, sales and service professionals.
He is an engaging key-note speaker who is always able to help his audience discover how to develop and attune people’s skills, interests and motivation to organizational goals and strategies.