Written by: Mark Donohue, CEO of LifeGuides
Your company deserves the best and brightest employees out there. However, now more than ever, you have to fight to win them.
The U.S. jobs report for April 2019 revealed that unemployment has now dropped to 3.6% – the lowest rate since 1969. While this is good news for job seekers, for employers it means an even tighter labor market in which it’s becoming harder to attract and retain top talent. According to a 2018 survey conducted by ManpowerGroup:
40% of nearly 40,000 employers surveyed were “struggling to fill roles”
Employers listed skilled trades workers, engineers, and sales reps as hardest to hire
46% of U.S. employers reported talent shortages in 2018 compared to 32% in 2015
A Korn Ferry study projected that by 2030, there will be a global talent shortage of more than 85 million people
It is a War for Talent, and it’s one of the biggest issues facing corporations in 2019 and beyond.
As the president of Global Industrial Markets practice for Korn Ferry explained, “Organizations must make talent strategy a key priority and take steps now to educate, train, and upskill their existing workforces.” To ensure a competitive future, companies would also be wise to improve their onboarding, benefits, and overall employee experience.
A Changing Workforce
While a tight labor market is one cause of employer retention and recruitment problems, it’s not the only factor. Many businesses have struggled to meet the needs of a changing workforce. According to the U.S. Bureau of Labor Statistics, more people are postponing retirement, and the fastest-growing age demographic is 65 and older.
Meanwhile, millennials and Gen Z are entering the workforce in larger numbers. These generations are more diverse and better educated than their predecessors, have less job experience, and prioritize issues like workplace flexibility and social conscience.
Another factor in the talent shortage is the growing discrepancy between the skills employers want and the skills applicants have to offer, known as the “skills gap.” A 2019 Society for Human Resources Management survey found that:
83% of HR professionals had difficulty recruiting suitable job candidates in the past year
75% of this group blamed a skills gap for the lack of qualified applicants
52% said the skills gap has worsened over the past two years
A McKinsey & Company survey likewise revealed that nearly 60% of American employers found job candidates unprepared for entry-level jobs. This skills gap, the report argues, “represents a massive pool of untapped talent, and it has dire consequences, including economic underperformance, social unrest, and individual despair.”
Winning the War for Talent
The talent shortage is clearly a problem that demands attention. Businesses who ignore the issue risk losing revenue and falling behind the competition. Luckily, there are plenty of proactive strategies organizations can take now to adapt to this new reality.
Design an inspiring onboarding experience.
One way to attract talent in today’s market is to make a positive impression at the start. Some corporations are investing in orientation programs that foster community and loyalty, and provide training to bridge that initial skills gap. In one standout example, Deloitte has created an onboarding experience they call “Deloitte University.” New employees gather at a luxury campus in Ft. Worth, Texas for a program of classes taught by company leaders, networking events, and community-building. And it’s not simply for rookies – many Deloitte employees return for a refresher course after a promotion or career milestone.
Provide employees with formal, ongoing training.
Formal employee training is non-negotiable in the war for talent. A comprehensive training and professional development program can tackle the skills gap while engaging workers and strengthening relationships. Studies have shown that the most successful trainings are conducted in-person and designed to be accommodating and accessible. One proven approach for new employees is the “boot camp” model, used by companies like Facebook. But ongoing training for current employees is also crucial – particularly as workplace demographics change. In a 2018 survey, 50% of millennials considered continuous learning opportunities “very important,” with 80% preferring “professional development or formal training.” In order to adapt to evolving technology, aging workers deserve regular training, too. Companies facing a skills gap crisis might even follow the example of industry leader AT&T, which is retraining its entire workforce in partnership with Georgia Tech University.
Enrich overall employee experience.
Retention is key in the war for talent, as recruiting the best people is meaningless if you can’t keep them around. Sadly, Gallup’s most recent State of the American Workplace report found that only 33% of employees were “engaged” at work, with 51% actively job hunting. The first step in engaging employees is listening – soliciting regular employee feedback and promptly addressing issues. Other proven retention strategies include creating educational and leadership opportunities, setting challenges, and establishing a clear mission and set of goals. The latter is especially important today. Not only do companies with a purposeful mission have higher growth and retention rates, but also surveys of millennials and Gen Z show that they prefer organizations guided by socially responsible principles.
Improve health benefits and promote wellness.
Many organizations don’t place enough emphasis on employee health, but research shows that it’s a worthy investment. Aging workers will need increasing support, and companies with solid benefits packages covering mental and physical health will appeal to job candidates. Many leading companies have also established wellness programs, which include everything from meditation and yoga classes to free healthy foods and fitness facilities to employee challenges and outings. Some organizations are also addressing burnout, which impacts productivity and drives down engagement, by mandating a strict 40-hour workweek or banning work email after hours.
Create a culture of flexibility and caring.
To attract the most talented employees, many companies need to make big changes to their workplace culture. Younger generations consistently name flexibility as one of their top priorities, which means managers should consider less rigid work schedules, remote work opportunities, more vacation and personal time, and, perhaps most importantly, stronger support for families. Studies have shown that the main reason female participation in the U.S. labor force lags behind that of countries like Canada is the lack of affordable childcare and adequate parental leave. Substantial parental leave for new mothers and fathers and discounted or on-site childcare (offered by industry leaders like Patagonia) allows these valued employees to maintain their salary and relationship with the company, thus increasing loyalty.
But it doesn’t stop there. Job candidates are now looking for companies that truly care about their employees and support them in their time of need. Many face financial difficulties, health challenges, or other personal issues that increase stress and impact job performance.
For example, a mentoring system like LifeGuides, which matches an employee to a peer who has dealt with a similar Life Challenge, offers employees the care and support they need to manage work-life balance, and unlock their full potential at work.
While the war for talent certainly presents a challenge, it is also an opportunity. By incorporating these changes, your organization will not only improve recruitment, it will become a more dynamic, stimulating, and caring environment for all employees, present and future.