By Mistie Hill – Staffmark
One of the biggest struggles facing companies today is the lack of skilled workers. The current demand for many skills far exceeds the supply, and economists predict the labor market will only continue to tighten. This lack of skilled workers is known as the skills gap, and it’s having a significant impact on businesses and the economy. Employers need to understand the challenges it creates so we can develop solutions to help combat them.
Gone are the days of posting a job opening and filling it within hours or days. According to a recent CareerBuilder survey, 45 percent of HR managers say they have been unable to fill open positions because they cannot find qualified talent, and 58 percent report they have jobs that stay open for 12 weeks or longer. There are a number of reasons that skilled labor has become high in demand:
• Older workers are retiring in large numbers, and there are fewer younger workers to replace them.
• More young people are going to college rather than into technical training programs.
• Unemployment has reached all-time lows. Fourteen states have set new records for low unemployment rates in the last year.
Right now there’s a major disconnect between the market for middle-skills jobs – those that require more education or training than a high school diploma but less than a four-year college degree – and the number of people qualified for those jobs. Businesses are struggling to find employees with what they believe are the necessary experience, skills and training to fill their open positions. HR managers say that extended job openings can cost them an average of $800,000 annually. Here are some of the most significant factors contributing to this gap in skilled workers, and what you can do to combat them.
Unsurprisingly, a majority of workers say that earning potential, starting pay and benefits are the most critical considerations when contemplating a new job, and as the unemployment rate continues its downward trend, many job seekers are more selective in the types of offers they consider. Employers must adjust to compete.
Seventy-two percent of HR managers say they have to pay entry-level workers more money because of tight talent pools. Use market data to get an idea of what your competitors are paying; also look at the supply and demand for the positions you are looking to fill. When the demand outweighs the supply, adjust pay rates accordingly.
One of the easiest ways to better understand what the market is demanding is simple – ask! During interviews, refrain from asking for a wage history. Instead, ask for wage expectations.
Differing Expectations of Job Seekers and Employers
Even though many job seekers and employers agree that the skills gap is an issue, job seekers often believe skills will be learned on the job, while employers are more likely to view job-seekers as lacking the skills needed to be hired in the first place.
Employers should review their list of job prerequisites and divide them into two groups: must-haves and nice-to-haves. Consider dropping the nice-to-haves from your job posting so that you don’t deter applicants from applying. Remember, many skills can be learned while on the job. Looking more closely at the qualifications of candidates who are currently unemployed or who have job titles that are not exactly what you’re expecting and being realistic in identifying the skills and experiences required for a position are great ways to broaden the talent pool.
Education and Training
Both job seekers and employers agree that lack of education or training in specific areas is a leading cause of the skills gap in this country. Unemployed American adults seeking work cite training as critical to their ability to re-enter the workforce or increase their chances of finding a job, and nearly nine in 10 job seekers would be willing to work in a new field if training were provided. Offering a training program is a great way to develop otherwise qualified candidates or candidates with strong potential or to draw potential new talent from the sideline.
According to Career Builder, 40 percent of workers are looking to change jobs in the coming year, placing added pressure on employers to retain top performers. With a limited supply of talent, it’s crucial to keep the people you already have. To reduce turnover:
• Meet regularly with employees to discuss career paths
• Hire and promote from within
• Offer professional development opportunities
• Recognize employees’ efforts (a simple ‘thank you’ goes a long way!)
As the supply of talent declines, employers will need to continue to improve efficiency, increase productivity, develop more effective recruiting and retention strategies and create training programs to reskill and upskill talent.
Sources: CareerBuilder; American Staffing Association.