How your company can address the talent crisis
The Talent Crisis will impact your organization. To mitigate the risks, develop programs that address the underlying causes. In this article, we identify four underlying causes and recommendations to address each cause. Many of these recommendations can be supported with an internal talent marketplace.
Cause #1 – The Shift to Specialized, Knowledge-based Work
In the early 20th century, manual labor jobs comprised nearly 80% of jobs, but now 80% of jobs require specialized skills and knowledge. Bersin and others see the industrial-manufacturing age having an abundance of workers and our information age having a scarcity of skilled workers. That scarcity will persist as the shift from manual labor to knowledge-based work will certainly continue.
Historically, workers typically took jobs that were locally available, but today, jobs are less constrained by location. Even in manufacturing, unique skills are required to work in many modern facilities.
A few years back, warehouse workers manually moved boxes from storage to trucks requiring a few basic skills and a lot of physical ability, but modern warehouse workers track automated package movers (i.e., robots), and may require data monitoring, troubleshooting, and technical configuration skills. Similarly, an accounts payables associate who used to approve paper invoices, now may need to support workflow design in a modern finance system and navigate within that system to process payments. At the end of the day, it’s not easy to just hire a helping hand when we really need unique skills and the need for unique skills is likely to accelerate with AI.
To address the shift to specialized, knowledge-based work, organizations can
I. Increase focus on specialized, skills-based training.
II. Identify internal candidates with adjacent or foundational skills.
III. Identify external agile learners with potential to learn key skills.
IV. Make learning advocacy a key leadership competency.
Cause #2 – Information Access
The second underlying cause of the talent crisis is the increased risk of labor flight due to the ease of access to information. Employee visibility to career options outside of their current company is greater than ever. Information from LinkedIn, Glassdoor, Fishbowl, and other sites, enable workers to easily access job descriptions, salary ranges, and employee satisfaction scores even while on a coffee break. Moreover, workers can see remote work and gig options. While information access is good and should be encouraged, it increases the challenge to retain workers.
While digital applications and fewer geographical barriers increase the number of available candidates, it doesn’t increase the net number of workers available. Yes, the talent pool appears wider and deeper, but there are just more applications to review and more places for employees to go. There is a similar pattern in college admissions. Where in the past, students may have applied to two or three colleges, it’s now common for ambitious students to apply to 10-20 colleges. It doesn’t increase the number of students going to college, but creates a more dynamic and competitive landscape.
Accessible job information, digital applications, and remote work accelerates worker opportunities and competition. This transparency promotes a more dynamic job market that benefits workers. It can also benefit those employers that make program changes to retain existing talent and attract new talent.
To address the prevalence of information available to employees, organizations need to
I. Increase visibility to internal job opportunities and gigs.
II. Reduce the friction in the internal transfer process.
III. Increase salary transparency.
IV. Celebrate internal mobility as a desired cultural attribute.
Cause #3 – New Worker Expectations
An impressive 87% of millennials rate career growth and development opportunities as very important to them.[1] Not surprisingly, more than two-thirds of American workers say if their company provided more opportunities to apply new skills, they would be more likely to stay throughout their career. Despite this, nearly half of employees do not see a clear path to advance their careers in their current organization.[2]
Nearly half of employees do not see a clear path to advance their careers in their current organization.
Workers are seeking opportunities to
Find interesting work.
Advance their careers.
Escape an incompetent or difficult boss.
Have a better work schedule or more remote work opportunities.
Obtain higher pay and benefits.
Better align personal values and organizational priorities.
Apart from finding remote work or flex schedules, these worker interests have not changed much over the years. What has changed, however, is that workers, as highlighted in Cause #2, have greater access to information about other jobs and are more likely to move when their needs are not met.
Today, early career professionals in the US tend to change employers in less than four years[3] and will likely have more than 12 jobs in their lifetime.[4] With half of US workers of all ages spending four or fewer years with one employer, retention and replacement considerations are significant. It may not be easy to address all six of the worker priorities listed above simultaneously, addressing some of them will make a difference.
To meet worker expectations, organizations can
I. Enhance coaching and mentoring programs.
II. Embrace employee career goals that transcend the current workplace.
III. Reduce tolerance for poor managers who are career blockers.
IV. Optimize hybrid and remote work models.
V. Reward performance.
Cause #4 – The Rise in Gig Work
Along with the trend to shorter tenure and shifting employers, comes the rise in contingent workers and gig work. To hedge investments in full time employees and accomplish short-term projects, many organizations are making contingent labor a greater portion of their workforce. This, along with increasing specialization has given rise to a dramatic increase in gig workers. Leading companies like Microsoft, Google, and Amazon have more than 40% contingent workers and one survey identified that 65% of full-time workers across industries do gig work as a ‘side hustle.’[5] Economists at Eightfold, a leading talent platform, predict the number of contingent workers in the US to increase over 10% per year in each of the coming years.
The rise in gig work is one of those trends that is a net positive. Despite this, it is still a change and therefore a challenge for talent teams to adjust to.
To address the rise in gig work, organizations should
I. Have a workforce strategy that includes contingent workers.
II. Develop guidelines and processes for internal gig work.
III. Deploy an enabling technology for gig work and projects.
IV. Encourage gig work as a new way of working.
Conclusion
The talent crisis is real and will accelerate. It is not a temporary like a commodity shortage. Savvy organizations know this and will devise strategies to attract, develop, and retain skilled workers with techniques that address the underlying causes of the crisis.
One of the strategies many leading organizations are turning to is to build a skills-centric talent program and deploy a Talent Marketplace. Talent Marketplaces are a great option for mid to large enterprises. They can increase talent attraction, development, and retention while fostering an attractive, worker-friendly culture.
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