Two of the biggest challenges facing today’s companies are supply chain disruptions and the ongoing global labor shortage. In fact, recent studies show that 87% of global employers are already having trouble acquiring the talent they need or anticipate having these challenges in the future.
87% of global employers are already having trouble acquiring the talent they need or anticipate having these challenges in the future
Why is there a labor shortage? The answer to that question is very complex. The global aging population, workers’ desire for higher wages and the increased demand for tech-related skills certainly play a role in today’s talent shortage. COVID-19 is also a contributing factor. While the labor shortage didn’t start with the global pandemic, it did help to accelerate it.
To combat these challenges and get ahead of your competitors, it’s important to have a plan in place sooner, rather than later.
To help with this process, we have developed a list of 11 strategies to help you solve the labor shortage. You can also download our action list below:
1. invest in employee training
Like it or not, both the skills gap and the labor shortage are not likely to end any time soon. In fact, it’s very likely that the labor shortage and skills gap will continue to intensify until at least the end of the decade.
For example, the McKinsey Global Institute predicted in 2017 that up to 375 million global workers may need to learn new skills and change occupations by 2030. This frim also admits that because of the pandemic, the number of displaced workers will increase by an additional 25% by 2030.
375 million global workers may need to learn new skills and change occupations by 2030
As technology and automation continue to advance, it’s quite likely that it may be impossible for your company to acquire the necessary tech-related skills through recruitment efforts alone.
The best way to overcome this problem is to invest in equipping your current workers with the skills the company needs. By upskilling and reskilling your current workforce, your company can acquire the specific skills it needs to implement emerging technologies.
While traditional, classroom lessons as well as in-house programs, such as mentorships and apprenticeships, are still very effective training tools, today’s employers can also utilize online training modules that allow workers to learn at their own pace. Online programs and digital tools can also train a greater number of employees in a shorter period of time. For example, our Randstad BrightFit technology can evaluate your employees’ strengths and weaknesses as well as provide training recommendations.
2. utilize HR technology
Studies show that 46% of employers around the world are now using some type of HR SaaS platform. If your company has yet to make this type of investment or if it’s been a while since you’ve updated your HR technology solutions, now is the time.
The right technology can improve your recruitment processes by automatically filtering through applications, sending automated responses to applicants, utilizing AI for candidate matching, automating the reference checking process and conducting video interviews, along with other features. For example, our Randstad Relevate tech stack can assist with the talent search process, reference checking and predictive job matching.
HR technology can also assist with workforce management and improve communication throughout the organization. Maximizing the use of HR technology can help your company improve its recruitment and employee retention efforts.
3. hire inexperienced workers
With the ability to find skilled labor becoming more and more difficult, companies must focus on training within. Ultimately, this transition to in-house training will change the type of candidates your company needs. Instead of solely searching for candidates that already have the skills you want, your company should also look for candidates that you can train.
Start by searching for candidates with desirable soft skills, such as problem-solving, adaptability, critical thinking and communication skills, that indicate they’re good learners. Not only will loosening your candidate criteria expand your overall talent pool, but it can ensure you hire candidates that can grow with the company.
4. use talent analytics
In the age of big data, it’s important for your company to not only monitor labor trends, but also make use of its internal data. According to the 2021 Talent Trends Report by Randstad Sourceright, talent analytics is one of the top 10 areas employers should focus on.This report continues by recognizing how data visualization tools can help employers assess their current workforce and prepare for its future talent needs.
Before gathering and monitoring data, it’s important to start by understanding the specific data points your company wants to track. It is recommended that you include metrics on turnover rates, recruitment costs, retention rates and absenteeism. Leveraging and understanding which data you already have available and which systems and tools you are using today are also important starting points.
5. update your employee value proposition
If there’s one thing that shifted significantly during the pandemic, it’s workers’ expectations. The pandemic highlighted the value of maintaining a healthy work-life balance. So, while salaries remain the number one motivator for changing jobs, according to our latest Randstad Employer Brand Research report, the ability to maintain the optimal work-life balance came in as a close second.
Today’s employees don’t just need the right salaries. They’re also looking for other non financial benefits, such as flexibility, mental health support or more liberal family leave policies. It’s important for employers to recognize this shift in workers’ expectations and to take action by adapting their employee value proposition (EVP) to align it with these new post-pandemic employee demands.
6. develop a strong compensation and benefits package
It’s crucial to develop a strong compensation package that goes hand-in-hand with the company’s EVP. If your company has not evaluated its employee compensation and benefits package within the last 12 months, you should do so now. So much has changed since the pandemic, it’s crucial to ensure your compensation offerings are still competitive.Furthermore, global inflation is impacting workers in both developed and developing countries. It’s only natural for employees to want wages to rise with inflation.
For example, significant wage increases were seen in various countries, such as Brazil, the United Kingdom, the United States, Italy and Canada. Wage increases were also seen in industries facing intense labor shortages, such as manufacturing, logistics, healthcare and hospitality. Fortunately, recruitment companies, such as Randstad, conduct salary research in various markets to help you make the necessary adjustments.
You also need to readjust your benefits package to meet workers’ shifting expectations. As mentioned above, today’s workers want more benefits that allow them to maintain a healthy work-life balance as well as safe working conditions, mental health support, employee training and career advancement opportunities. Creating a benefits package that highlights today’s worker’s expectations can help your company stand out from the competition and attract the talent it needs.
7. focus on building a diverse workforce
Our research shows that 68% of business leaders already have a diversity plan in place and another 27% are in the process of developing one. Why such a high demand for diversity in the workplace? First, we know that diversity can increase creativity and productivity in the workplace. Secondly, recruiting a workforce with a diverse set of skills, attributes, backgrounds and experiences extends your company's talent pool, which can ultimately improve hiring outcomes.
Finally, workers want more diversity in the workplace, especially younger workers. For example, in a recent survey, 74% of Millennials thought the companies with diverse workforces were more innovative than those without. Building a diverse workforce has the power to push your company forward in an economy that is becoming more and more globalized.
8. leverage contingent talent
Studies show that more than 3-in-4 employers are already using flexible staffing solutions, such as contingent or temporary workers. This demand is only expected to increase as the skills shortage intensifies in the upcoming years. There are, however, many benefits of utilizing contingent workers. For example, contingent talents allows your company to scale up or scale down its workforce to meet fluctuating production demands. When done right, leveraging a contingent workforce can help your company save money and increase production.
Studies show that more than 3-in-4 employers are already using flexible staffing solutions, such as contingent or temporary workers
The trick is to have an effective plan in place to successfully manage a team of contingent workers. There should be a process in place for everything from hiring to training to shift scheduling of contingent workers. At Randstad, we have years of experience managing contingent talent and can provide the ongoing support your company needs.
9. enhanced employee engagement
With the current labor shortage expected to continue over the next several years, many employers are prioritizing employee retention. The goal of this strategy is to reduce turnover within the company so there will be fewer vacant positions to fill. According to a recent Microsoft survey, over 40% of workers around the world are considering changing jobs.
This research shows that employers must actively take steps to entice its workers to stay. Research shows a direct link between retention and enhanced employee engagement. In fact, one study shows that highly engaged companies realize a 59% lower turnover rate.
Techniques, such as a recognition and rewards program, regular check-ins, empathy, and strong and transparent communication are all known to help increase engagement in the workforce. Developing a strong employee engagement strategy can not only improve retention rates, but it can also reduce absenteeism and increase profitability.
10. Redeploy your workforce
The harsh reality is that acquiring the right skilled talent is likely to become more challenging in the years to come. One of the best ways to overcome this obstacle is to focus on the internal mobility of workers. In fact, a recent study shows that typically 60% of a company’s open roles can be filled by its current workforce. Redeployment of the workforce, however, can only happen with the right upskilling and reskilling opportunities.
60% of a company’s open roles can be filled by its current workforce. Redeployment of the workforce, however, can only happen with the right upskilling and reskilling opportunities
It’s important to have a clear and transparent process in place for career growth and advancement within the company. You can also use an array of digital tools to identify which workers are a good fit for various open roles within the company. For example, our Randstad BrightFit technology, as mentioned above, can help your company assess worker’s abilities and recommend training options.
11. partner with a HR solutions company
Partnering with an HR solutions company can provide additional support to help your company acquire and retain the talent it needs to recover and move forward in a post-pandemic market.
For example, at Randstad, we can give you company instant access to our vast database of prescreened candidates and help you filter through these applicants to find ones that match your set criteria. For companies with a large volume workforce, we can even handle the talent management process to improve employee communication, training and engagement throughout the workplace.
Additionally, we provide you with talent insights and access to our HR Relevate tech stack to streamline their HR processes.
For more information, download our summary of effective tips for overcoming the labor shortage.