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HR In Crisis : Planning For The Skills Shortage

Posted by Kate Smedley on 25 Aug 2017

The talent shortage continues to throw HR into disarray. The latest JobsOutlook Survey from the Recruitment and Employment Confederation (REC) found that two in every five businesses would need to recruit to meet additional demand in their business.

In the light of this report, employers have been urged to reconsider their approach to investment in training and upskilling their existing staff[1].  At present, the majority turn to recruitment agencies and the gig economy to fill skills gaps. While addressing an immediate need, this approach doesn’t resolve a potentially ‘unprecedented labour shortage’.

A further report from the Institute Of Public Policy Research (IPPR) found that over five million employees are over-educated for their jobs, an increase of nearly a third since 2006. Its report Another lost decade : Building a skills system for the economy of the 2030s[2] warns of the prospect of a further ten years of falling wages and productivity and calls on employers to take action to utilise the skills of their existing workforce. It revealed that:-

  • 30% of employers admit that they don’t tap into those existing skills.
  • Less than half have a training plan in place.
  • Less than a third of businesses have a training budget.

The report also notes that, while skills are in short supply, they are limited to specific sectors which is leading to an imbalance in organisations, leaving many workers feeling underutilised and disengaged.

Executive search business 6 Group[3] also report that just one in five (19%) employers believe their workforce has the skills and capabilities to support their future business needs, identifying three areas which require urgent attention:-

  • Succession planning.
  • Talent pipeline.
  • Competency assessment.

Understanding what skills are already available in your business coupled with a long-term approach to talent management and a commitment to learning and development will enable HR to begin to address the skills gap. The following strategies may provide a framework:-

Get clear on your true hiring needs

Mismanaged recruitment processes which fail to provide clarity over the breakdown of your workforce, or the skills available, add to problems with employee engagement and productivity.  Access to data is vital to ensure accurate long-term planning and avoid unnecessary hiring. Start by investing in HR technology to gain insight into what is really happening in your hiring process. ‘Guesswork’ or rough estimations will only perpetuate your existing problems, particularly in sectors where qualified candidates are difficult to source. A recent survey found that HR departments in the tech sector were rated as the least effective. Hiring teams were judged on three criteria, their ability to get things done, technical ability and their responsiveness to other teams.

Change your attitude towards your contingent workforce

At present, for many hiring teams there is no alternative to sourcing additional skills through the gig economy or recruitment agencies to address their urgent requirements. To ensure an engaged, productive workforce, your temporary staff should be treated in the say way as your permanent employees. Deloitte’s 2017 Human Capital Trends Report suggests expanding your definition of employees beyond ‘people on the balance sheet’ to incorporate your contingent workforce too. Apply the same screening, background checks, onboarding process and performance management strategies to encourage engagement. A quarter of employers plan to appoint their temporary workers to permanent positions within the next year, a figure which is likely to increase as the skills shortage continues.  

Work on retaining staff with key skills

Employee retention, especially among new hires, is a problem for HR as one in five employees now leave their jobs during or at the end of their probation period. Improving your staff retention begins with your hiring process and ensuring that final decisions on candidate selection are supported by recruitment data, not based exclusively on the interview. Focus on wellbeing, ongoing conversations with your employees and career development and learning to ensure your high achievers aren’t tempted to explore alternative job opportunities.  

Managing the imbalance with digital transformation

Concerns over poor training or lack of investment are not new. The UK needs an additional 745,000 workers with digital skills but employers are slow to adopt automation and digitalisation in the workforce. Over half of employees believe that their lack of digital skills is the biggest challenge in their job but a third aren’t given any training and one fifth of employees lack even basic IT skills. In their new report, Digital transformation and the future of hiring[4] recruitment specialists Robert Half note that digitalisation can offer improved efficiency and productivity, leading to ‘value added work’. It suggests that it will also provide opportunities for critical on the job learning. That transformation needs to begin now.

Investment in HR technology

Investment in training must go hand in hand with investment in HR technology in order to address the three areas highlighted by Group 6’s report above. Recruitment software enables HR to:-

  • Maintain talent pipelines by evaluating HR analytics and understanding your key recruitment metrics essential to building that pipeline.
  • Identify the sources and characteristics of your most successful hires to inform succession planning.
  • Assess the competency of new hires through online recruitment tools

It also provides ongoing insight to enable HR to continually review and adjust talent acquisition and retention strategies and plan for future hiring needs based on your own recruitment data. 

Plan for the skills shortages in your business with Advorto’s world class recruitment software. Contact us today to start your 30 day free trial.

You might also like to read:-

5 Secrets To Better Employee Retention

Recruiting Tech Talent : Essential Trends & Hiring Solutions

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