if you’re building a well-oiled talent engine, you may not need to worry so much about the bigger picture
If you head up talent acquisition in your organization, headlines from around the world may be keeping you up at night. Whether it’s a report about a critical shortage of qualified engineers in Germany, an article lamenting the lack of available nursing skills in the US, or a blog citing a deficiency of financial services specialists in Hong Kong, the news for your profession is certainly challenging.
But are things really as bad as they seem? Unquestionably, some fields such as science, technology, engineering, and math (STEM) professions face ongoing talent shortages. Recent employer surveys suggest the problem may exist in other fields such as healthcare, HR, manufacturing & logistics, and even administrative positions. For example, a Randstad Workplace Trends Survey released earlier this year found that 61% of US employers believed there is a skills shortage today, and that 56% felt their business was negatively affected by it. Employers said the problem was greatest with healthcare, engineering, and IT positions. Other studies around the world have produced similar troubling findings for employers.
I’m sure many talent acquisition leaders can share more of their own stories about growing difficulties filling requisitions, how they spent months finding a qualified candidate only to have them stolen by a competitor, and how trying to source a multi-lingual program manager in Latvia led to premature graying.
But push the pause button and read on….
These accounts may be more rare than we think and do not accurately reflect the full reality. According to well-respected HR authority Professor Peter Cappelli of the Wharton School, there is little evidence to support the claim that a severe skills shortage is occurring at least in the US. He contends in a new National Bureau Of Economic Research paper entitled, “Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US” that complaints about the perceived talent shortage are mostly just that: complaints that don’t necessarily reflect the true workforce picture. In fact, he states, “There is very little evidence consistent with the complaints about skills shortage and a wide range of evidence suggesting that they are not true.”
Cappelli cites numerous data sets and studies to bolster his arguments, citing factors such as the absence of soaring wages in some so-called talent-starved markets, misreading of demographics, and organizations’ own mismanagement of talent strategy. He cites one particular report where skills shortages “were seen as self-inflicted by management.”
There is without a doubt that some markets are experiencing a shortage of critical skills, and this is reflected in big hikes in salaries. A recent Towers Watson report predicted that professionals salaries are projected to increase 7% across Asia, with some countries facing double-digit hikes. However, the size of these increases is exceptional right across the global economy, as countries in the EU for example, still grapple with high levels of unemployment.
So if a globally-wide talent shortage is questionable, why do so many employers still spend energy and time worrying about filling their business-critical roles? Why did 63% of CEOs surveyed by PwC this year say they are worried about finding key skills?
The critical information
Debating whether a talent shortage exists across the entire market offers little solace to hiring managers who just need their vacancies filled. The reality is finding and retaining talent has become one of the most important issues to the C-suite, and it's HR’s primary business responsibility today. Cappelli cites one study that suggests that the perceived difficulty in hiring comes from the fact that companies lost much of their internal recruiting capabilities during the most recent global recession and have not yet recovered those skills.
So what they need most desperately is market intelligence, recruitment expertise, and employer brand attractiveness to find and secure the best talent.
In our experience working with global and local clients, they often seek advice on how to incorporate the latest innovations in one or all of these three key areas. They want to know how many experienced accountants are within 30 kilometers of Frankfurt, how to recruit mechanical engineers in Ottawa, and how to shape their employer value proposition to resonate with candidates in Shanghai. These highly progressive HR leaders aren’t so much focused on whether a talent shortage exists – but rather what to do about it.
For instance, we’re working with a number of global organizations to help define and communicate their brand to both permanent and contingent workers – tailoring their employee value proposition and messages to be consistent globally, but most importantly to resonate locally. All around the world, we’re leveraging our talent sourcing expertise and regional centers to locate active and passive candidates. And we’re continually being asked for our opinions, expertise, and analytics on a range of workforce issues and potential talent management solutions.
Putting pieces in place
So a valuable lesson for us and talent acquisition leaders, is that to stay ahead of any talent or skills shortage (both real and perceived), make sure your organization has all the right pieces of the talent strategy in place. If you do, it won’t matter whether a talent shortage exists. You will be ahead of the game with the right know-how and talent to anticipate market changes, expand into new markets and really quantify the business impact of your talent investments.