Talent Wanted - Skills Shortage Found
In 2019, those working in recruitment could not avoid the issue of skills shortages. A 2018 study conducted by the US research company Gartner found that the shortage of skilled workers is the greatest risk for companies worldwide. This was further supported by a 2019 study from The British Edge Foundation which showed that 68 % of employers had difficulties in recruiting suitable specialists due to the shortage of skilled workers. The estimated impact to the total UK economy is estimated at £4.4 billion pounds or 5.27 billion euros.
In this article, we outline what that means for your HR team, and how to overcome these challenges successfully.
Why is there a shortage of skilled workers?
The business world speaks of a shortage of skilled workers when there is a large number of vacancies for roles that require certain qualifications and there is a lack of skilled workers on the labour market for these tasks. A specific industry, a region or even a whole state can be affected. According to a study by the management consultancy Korn Ferry, there could be a shortage of 85.2 million skilled workers worldwide by 2030. The study also says that most industries will be affected, but specifically mentions the financial and business services sectors, technology companies and the manufacturing industry. The British Health Foundation’s research underpins the prevailing shortage of skilled workers and its consequences in the care sector. It predicts 70,000 nurses will be out of work in the next 5 years and this figure will rise to 100,000 in the next 10 years if no countermeasures are taken.
What can HR managers do to counteract the shortage of skilled workers in a targeted and effective way? Furthermore, how and where can culturally appropriate talents be found for their companies?
Talent Management – The effective cure for a shortage of skilled workers
An increasingly important area to be aware of is Talent Management. In short, Talent Management bundles a variety of activities that are necessary to fill targeted positions with the right talent.
Talent Management can be divided into 3 disciplines:
In this blog article we will explore point 1 – Talent sourcing.
Talent sourcing – internally and externally
Why is it important to find and hire employees or talents for the company? Simply put, finding the right talent is essential to make and keep your company competitive.
Employees with specialised skills – that match the company and the role required – help with this. It is important that Talent Management is individually tailored to the company and key qualifications sought.
On the one hand, talents can be recruited externally. However, it is worthwhile to take a closer look at your own employees in order to identify and promote so-called ‘high potentials’ in good time and, ideally, to bind them to your company.
Talent sourcing from within the company.
How do HR managers become aware of talents in their own company? How can they be identified?
Think about what skills a candidate should have for a required position. If this is clear, measures such as performance reviews and personnel appraisals can help identify high potential internal candidates.
HR managers help to find out whether employees are currently in the right position or whether a move to another department or field of work is better suited to their qualifications. This is important for the motivation of the employee, but it is also important for the competitiveness of the company. Employees are looking to fill positions where they can realize their full potential within the company. This is confirmed by a study by Stepstone from 2019, which states that 34.6 % resigned due to lack of promotion prospects. A further 25 % said they had left the company because they had not been given the chance to take part in further training measures. The importance for companies to train existing employees is best shown in a study by HAYS with US employers which discovered that hard-to-fill positions are often of great importance for their growth plans of the company.
… or new talents
There is also a wide range of external opportunities to search and find candidates.
In addition to the classic job advertisements and outsourcing to recruitment agencies, an employee-recruitment program can be the path of choice to approach candidates.
In the external talent search, the candidate should fit culturally into the company. The recruiter’s task is to clearly present the vacant position, the development opportunities and the company itself, preferably in a way that distinguishes it from the competition.
The company employees can support this by acting as ambassadors of the company through their social networks and by publicising the vacant position. This approach helps HR managers to conduct authentic job interviews and potential candidates gain a better insight into the company and its culture.
Sectors such as industry, healthcare or IT are particularly affected by a shortage of skilled workers. A Forbes article reports that 75 % of US companies in the industrial sector report a shortage of skilled workers. In 2018, for every 15,000 vacancies in Germany in the care sector, there were almost 2,900 registered unemployed specialists and under 200 registered unemployed specialists to fill the vacancies. This results in a recruitment period of 183 days which is 12 days longer than it was in 2017. According to the MINT Spring Report of the Institute of the German Economy (IW), the shortage of skilled workers in the IT sector in Germany has increased three times since 2014.
Erste Bank Group IT successfully counteracts this by relying on the opinions and network of its employees. Only employees of a company with a coherent corporate culture are happy to recommend their company to others; this is authentic and makes it more interesting for candidates. It was also important for Erste Bank Group IT to establish a transparent and comprehensible recruiting process in addition to a higher number of hires. The company reports that the introduction of the digital employee recruitment programme has strengthened team spirit and increased employee motivation. Find out more about a digital employee recruitment programme like the one, that became an important recruiting channel for Erste Bank Group IT.
Learn in our upcoming articles how you can promote and retain your talents! Check back soon on our blog.