Tag: talent shortages

Tech and Telecoms challenged by migrations, inflation, and cost of labor

The ManpowerGroup Talent Solutions 2022 Total Workforce Index™ (TWI) has revealed the U.S., Singapore, and Canada as the highest-ranking labor markets across the globe for sourcing, hiring, and retaining talent. The ninth annual TWI report has analyzed more than 200 factors to evaluate skills availability, cost efficiency, regulation, and productivity. These findings were combined with big data and expert analysis to assess the workforce engagement of 69 global markets.

The current labor markets are characterized by intense competition for skilled workers, with 75% of companies globally reporting talent shortages and difficulty hiring — a 16-year high according to ManpowerGroup’s 2022 Talent Shortage Survey. This year’s revamped TWI places more emphasis on the impacts of remote work, the growing willingness and flexibility of employers to scale back education requirements and choosing to skill candidates on the job.

The ages of the workforce

There’s also heavier focus on the age of the workforce. As older workers leave the labor market, more companies are cultivating sustainable populations of talent by prioritizing the availability of large pools of Gen Z and millennial workers. Additionally, cost-of-living indices, wage inflation rates, and exchange rate volatility are new factors introduced into the TWI based on the significant impact of these issues on organizations and their workforces. This helps to provide a clearer picture of economic stability as companies make workforce mix and location decisions.

Dave McGonegal, Vice President of Talent Solutions Consulting & Advisory commented: “In a digital-first global economy, skilled talent is the new currency for business and economic growth. Organizations looking to separate from the pack turn to the Index to help them navigate change in real-time. This includes navigating new markets that will enable companies to compete for much-needed talent proactively and creatively, while still meeting business objectives. Companies need to become employers of choice, regardless of location, and factor in the needs most important to employees.”

When it comes to Technology and Telecommunications, organizations have been challenged by migrations, inflation, and cost of labor. This is causing them to heavily weigh a range of factors that contribute to long-term sustainability, productivity, and cost efficiency. In heavily regulated industries such as Pharmaceutical, Biotech, and Medical Device Manufacturing companies are finding challenges with cost efficiency and talent availability as specialized skill sets, certifications, and background checks are required for producing medical devices.

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39% of organisations reporting losing employees to companies who offer flexibility

Unit4, the cloud applications organisation, has announced the people and HR-related findings of its second annual Business Future Index.

The report surveyed 3,450 respondents across 12 global markets in order to understand how much people, policy and technology changes have accelerated over the past 12 months with the Index revealing significant concerns with flexible working strategies, despite a dramatic acceleration in its adoption. With competition for talent growing, there is a danger that failure to improve working policies and implement the right tools could lead to more employees choosing those employers who offer a more flexible approach.

The index found that 76% of respondents said that flexible working policies need improvement and 62% agreed that the tools to support flexible working are not adequate. A mere 18% of respondents said that they experience a flexible working policy without any restrictions with 39% of organisations reporting losing employees to companies who offer flexibility.

Attracting and retaining talent (62%) remains the biggest priority for organisations over the next 12 months, as talent shortages continue.

Flexibility important but implementation inconsistent

The Business Future Index found that 92% of respondents stated that their organisations have now adopted some form of flexible working policy. However, it also revealed that there is much work to be done to apply these policies more equitably and ensure employees have the right framework and tools to enable such approaches. For example, the Index discovered that 37% of people work flexible hours, such as working from 9am – 3pm, then made up time in the evening with 31% working a completely flexible hybrid model (office and home based). Of the respondents, 31% stated that they are mandated to spend a proportion of time in the office (for example, a certain number of days per week).

While the reasonably even split between the different types of flexible working is understandable given that not every organisation can offer complete remote working, other data suggests an imbalance in how such policies are applied. While 55% say flexible working applies to all employees, more than a third (35%) said it only applies to some employees dependent on job role, and 9% suggested it depends on the manager’s discretion applying only to some employees. Given that less than one fifth of employees experience flexible working without restrictions, there is still some way to go to improve such policies and, therefore, it is critical organisations move quickly to avoid loss of talent.

Big drivers for workforce strategies: recruitment, diversity and technology

According to the Index, attracting and retaining talent remains the top priority for all organisations across the globe in the year ahead, but the Index revealed further challenges impacting workforce strategies, that included staff retention, ESG credentials and diversity, with only 25% of organisations planning to improve diversity within the business.

Re-skilling talent (51%) and implementing a successful flexible/hybrid working policy (50%) also made it onto the list of top business priorities, compounded by 51% who believe that the real need to enhance talent strategies will hinder their ability to achieve their objectives.

Tania Garrett, Chief People Officer, Unit4 commented: “Given the need to attract a broad spectrum of talent into organisations from different demographic groups to meet demand for skills, the Business Future Index shows businesses must make diversity a higher priority. Along with investing more in reskilling their existing workforce to help meet future requirements, the Index clearly shows there is a close correlation between investment in innovative technologies and a positive impact on recruitment and retention.”

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59% of European employers find it difficult to attract candidates

Research from SD Worx, European HR & payroll services provider, has revealed an intensifying tug-of-war for talent as British companies rally to deliver on hardened employee expectations and land new team members.

Based on a survey of 4,371 companies in the UK and across Europe, the findings highlight a red-hot recruitment battle and a new power shift in the job market, with the balance tipping firmly in favour of employees.

When it comes to attracting candidates, 59% of European employers are facing difficulty. That figure is significantly higher in Belgium (65%), the UK (59.1%), the Netherlands (54%) and Ireland (53%). Countries such as Sweden (32%), Italy (32%), Norway (31%) and Spain (29%) seem to have a slightly less difficult time attracting employees.

In fact, over half of UK employers (51.8%) say it’s never been more difficult to attract talent.

Recruitment efforts stall as jobs boom

The picture is similar across Europe, underlining the new state of play in a job market where the war for talent is now employers’ most urgent challenge. The research also sheds light on how current employers are arming themselves in the battle to attract new employees, with over two-thirds (68.7%) of European companies surveyed indicating that they have never had such a hard time positioning themselves as attractive employers.

Overall, six in ten European employers indicate that filling vacancies is currently taking longer.

Colette Philp, UK HR Country Lead at SD Worx, commented: “Recruitment issues are now running at record highs with companies facing a raft of major challenges to overcome at speed to keep apace in the heat of an intense war for talent.

With an unprecedented lack of availability in the workforce, our research confirms that employers will have to be more inventive and investment orientated to ensure business growth and survival. This means thinking strategically to open up new pools of talent in the existing workforce through investing in training and development as well as instituting the new, yet hardened, employee expectations of flexible working hours and arrangements to land essential talent.”

Talent shortage

European employers find it particularly difficult to find candidates with the right skills. For 56% of the companies surveyed in Europe, this is the biggest challenge in the war for talent. The figure is even higher among Belgian (70%), Italian (63%) and German (61%) employers.

New business models and digitisation are increasing the demand for new profiles. This new search points to a changing economy shaped by low employee availability and brings to light a new hardened business imperative to secure the right talent with the right skillset.

Looking toward the future of the jobs market, European employers cited five core areas that will determine companies’ ability to attract top talent:

– 35% of employers put working hours and flexible working arrangements as a major priority

– 34% of employers said job security and financial stability are in the top five

– 34% said employees value the work atmosphere and social environment

– 32% identified meaningful, interesting and challenging work as key

– 27% of respondents said training and development opportunities are important

Philp concluded: “From a top to bottom level we need to rethink how we do recruitment. This means paying careful attention to new learning curves, opportunities for development, and the adaptability of potential candidates for a job. Right now, it’s a job hunter’s market and the onus is firmly on employers to step up to new expectations by hitting all the right notes in terms of pay, flexibility, purpose and culture. But despite the urgency, employers don’t have to support that switch alone.  For example, they can make use of education and training, or they can work with interim contracts. This way companies can still succeed in filling vacancies while increasing employee potential. Taking this fresh approach to recruitment practice has enormous potential to reshape not just growth and productivity but also employees’ very own career trajectories with a company.”

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Four-day weeks and flexible hours remain top of list

New research from ManpowerGroup & Thrive has revealed that:

  • 45% of workers want to choose their own work start and end times.
  • 64% want to switch to a four-day week
  • 71% need trust in leadership to thrive
  • 34% want to choose where they work based on their daily needs
  • Well-being is an crucial strategy for hiring and business success

The What Workers Want: From Surviving to Thriving at Work data also revealed that workers are need their employers to help them shift from surviving to thriving, prioritising flexibility along with factors such as trust, purpose, and well-being.

While flexibility may be a lasting result of the pandemic, it requires individualisation. Workers are demanding choice, autonomy, and consideration for their well-being.

The highest talent shortages in 16 years indicate that workers at almost every level and in every sector have the upper hand and employers need to pay attention.

Leaders must be willing to to listen, adapt, and think differently about how to approach flexibility, not just flexible working.

Arianna Huffington, Founder & CEO of Thrive said: “This is a time of constant change and disruption, but it’s also a once-in-a-generation opportunity to redefine how we work and live. Forward-thinking companies need to do away with the zero-sum idea of work and life reflected in the myth of ‘work-life balance’ by embedding well-being into the workflow itself, and investing in our most important resource: our people.”

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Companies offer or re-commit to championing parental leave

A resource from McKinsey and Company entitled Women in the Workplace 2021 has shared data suggesting that women were even more burned out as of late 2021 than they were in 2020. The research also revealed that burnout was ramping up faster among women than in men with childcare-related worker attrition remaining a human resource issue.

Around a third of women surveyed stated that they “have considered downshifting their career or leaving the workforce this year,” compared to the one-fourth of women who told McKinsey the same early on in the pandemic.

In a market that is talent-strapped, employers have had to be very creative when conjuring up ways to better retain parents. Many companies have offered or re-committed to championing parental leave so that workers aren’t forced to choose between caring for their families and nurturing their careers. Labor experts also have called attention to the nuance involved in such considerations, including regard for LGBTQ+ parents who need leave and further attention paid to mothers who are black and their higher rates of burnout.

According to the survey, some companies have taken a step further by offering stipends for in-home childcare or daycare. Others still have implemented “returnships” for caregivers — primarily, women or birthing parents — to become reacquainted with the workforce after a years-long childcare hiatus.

But flexibility in their workflow and scheduling remains one easily implemented solution that managers and HR teams can offer parents today.

McKinsey commented in its 2021 report: “More than three-quarters of senior HR leaders say that allowing employees to work flexible hours is one of the most effective things they’ve done to improve employee well-being, and there are clear signs it’s working. Employees with more flexibility to take time off and step away from work are much less likely to be burned out, and very few employees are concerned that requesting flexible work arrangements has affected their opportunity to advance.”

The one caveat? Ensure that employees are given clear boundaries along with their flexibility, to thwart an “always-on” approach to work. It’s important to not only offer flexibility but also to support staff wellbeing in order to avoid burnout.

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Talent shortages continue to hinder the market

According to the Institute for Supply Management’s “Services ISM Report on Business” activity in the US services economy expanded in April, but growth decelerated from March.

The report revealed that the Services PMI index fell to a reading of 57.1% in April from 58.3% in March. Readings above 50% indicate expansion.

According to Anthony Nieves, Chair of the ISM’s Services Business Survey Committee, a restricted labor pool is what impacted the index along with a noted slowing of new orders

Anthony Nieves made comment: “Business activity remains strong; however, high inflation, capacity constraints and logistical challenges are impediments, and the Russia-Ukraine war continues to affect material costs, most notably of fuel and chemicals.”

Data for the report is based on a survey of purchasing and supply executives across the US. A few firms surveyed for the report commented on labor concerns.

“Talent shortages continue to make it difficult to get work done at companies across many industry sectors,” said one firm. “Light industrial labor is in high demand, but supply gaps still exist. Wages continue to rise in nearly all labor categories, contributing to the rise in prices of goods and services.”

Another respondent commented: “Inflation, supply chain issues and access to qualified workers continue to be issues. There are still lingering effects from the pandemic, although those seem to be subsiding. The future impacts of the war in Ukraine are unclear.”

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Talent shortages reported across all industries  

Research by Right Management, global career experts have revealed that four in five employers admitted to hiring new recruits who would be better suited to a different role in the business than they were originally hired for, with 16% going as far as to admit that most employees would be better suited in an alternative role. 

The trend appeared to be more prevalent in London with 82% admitting ‘at least some’ would be better suited elsewhere whilst a shocking 21% deemed ‘most’ new hires to be in unsuitable roles.  

It’s come to light in the current market that the pandemic has afforded employees the time and space to reflect on their working lives, and to consider whether their current employer is aligned with their goals and values – something that many have never had the luxury of doing before. This new perspective led to many employees leaving their jobs, triggering the apparent ‘Great Resignation’. Naturally this exacerbated challenges for organisations that are already struggling to hire because of a reduced talent pool – a result of Brexit, an ageing workforce and inactive workers. 

Large businesses with more roles to fill reported having more employees in unsuitable roles, (81% at least some, 17% most). 

Talent shortages are reported across all industries, and this comes as COVID-19 restrictions are lifting and the UK enters recovery mode, with the number of roles advertised at an all-time high. 

The research reported that employees leaving a role are more likely to take another within the organisation, if possible (26%), with 22% leave to join a competitor business. 

Tim Gilbert, Right Management’s UK Managing Director, commented:“There are a number of factors which could cause people to be hired into the wrong role. Businesses are often under immense pressure to deliver, and this pressure can lead to a rushed hiring process, as leaders look to avoid burnout among current staff. 

“The reduced pool of talent available could lead to a ‘softening’ of the recruitment process. The hiring process itself may not reflect the changes that the UK labour market has experienced; for example, businesses could look to prioritise soft skills and the right cultural fit rather than focusing solely on specific technical skills and experience.” 

He continued: “Recruiting poorly can be very damaging for a business and draining on often-stretched resources, not to mention for the morale and confidence of the colleague in question. It is also very costly – the wrong hire can cost three times the first year’s salary.” 

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The roar of the war on talent continues as employees are switching jobs at record numbers and workforces continue to shrink. Together, these events have created an environment in which business and HR leaders are having to play catch-up. Today’s labor market, regardless of business type or location, is now faced with more job openings than available workers.

These market pressures are creating never-before-seen urgency around talent.

And for now, most businesses are reacting with the one tool that they can easily access: money. While wages in general haven’t skyrocketed as much as they have in hospitality and retail, a high salary remains one solid way to entice key employees to stay and to lure employees to their organization. And once you change that, there’s no going back. Unfortunately, the money bucket is not bottomless and SMEs don’t have access to the funds to support such high increases. The current cycle in the market can only go on for so long and leaders will need to act for the future in addition to reacting in the present. Here are three things to help drive retention in your organization.

Here are three key ways to attract and retain talent in the current marker:

  1. Ensure pay equity.
  2. Increase workplace flexibility
  3. Create a high-attention culture.

In the short-term, many organizations will continue to address talent shortages by increasing wages. At some time in the not-so-far-off future, the organizational tolerance for digging into the checkbook will wane. We don’t need to wonder what to do next. We know we also need to invest in proactive, long-term solutions that keep people from even entertaining leaving. It doesn’t have to be overly complicated. Start with embedding the practice of check-ins into your organization. Check-ins aren’t the only thing, but they are the fastest thing when it comes to creating a culture where people feel connected and less compelled to leave.

 

Photo courtesy of Canva.com

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TUC should be lobbying for statutory compliance

According to HIVE360, the recent blanket on umbrella companies will escalate the current war on talent and worker shortages, put pressure on pay rates and penalise both good and bad operators. The government’s call for evidence invites views from stakeholders on the role that umbrella companies play in the labour market, and how they interact with the tax and employment rights systems. It sets out the concerns that have been raised by some stakeholders, as well as government action already taken to tackle tax non-compliance and improve protection for workers, and closes on 22 February 2022.

David McCormack, CEO of HIVE360 has stated that the government’s current call for evidence on the umbrella company market – recruitment companies in particular – are already reeling from the effects of Brexit and the pandemic and the consultation’s timing could not be worse.

McCormack said: “A ban would penalise legitimate transient workers. It would put immense pressure on pay rates for umbrella workers, who struggle to understand the implications and will seek their current rate of pay as a PAYE rate, meaning higher pay rates that many companies simply can’t afford at this time. For the recruitment sector, this would mean vastly increased processing costs – which their clients would understandably be unwilling and unlikely to pay to cover the higher labour costs.”

McCormack, who has first-hand experience of the various payroll models used today and was the head of his own umbrella business before setting up HIVE360, believes that there is widespread misunderstanding of all umbrella companies, and people are tarnishing all umbrella businesses with the same brush. Commenting further, David said:

“The proposed total ban on the use of umbrella companies, would be a sledgehammer to crack a nut. Rarely does a blanket approach address the real issues, and an all-out ban on umbrella companies would be no exception. The TUC doesn’t appear to understand the roll of umbrella companies, or that there are multiple types. Rather than lobbying government for a total ban on their use, the TUC should be lobbying for statutory compliance and an independent statutory body that administers and polices clear rules and consequences, and which governs the industry in an effective, consistent and unbiased way.”

He added in a statement: “Companies have to take part in the government’s call for evidence on umbrella companies, which closes on 22 February. They must understand that HMRC doesn’t appear to be effective in curbing the multitude of ‘mini’ umbrella companies, which is the side of the industry that predominantly gets the whole industry a bad name, and involves the use of multiple companies to access multiple amounts of employers NI allowances and effectively removes the obligation to pay one of employment’s core statutory taxes.

“IR35 has tried to address this – but failed.  The simple solution is to require the end user and the recruitment agency to answer one simple question (and this could apply to labour only supplies or all agency supplies only) that simply asks: ‘Are you accessing the employers NI allowance yourselves or is your NI bill over £100,000?’ If the answer is yes from either party, then the agency should be liable for any unpaid employers NI.”

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Reskilling workforce key to plugging skills shortage hole

The newest McKinsey Global Survey on reskilling has highlighted the urgency needed to address massive skills gaps across all industries. The accelerated move towards digitization and remote work has placed new demands on employees who now require different skills to support significant changes to the way they work and to the business priorities their companies are setting.

Most of the survey respondents said that skill building (more than hiring, contracting, or redeploying employees) is the best way to close skills gaps and that they have accelerated their efforts to reskill or upskill employees since the start of the pandemic. The results also pointed towards a shift in the most important skills to develop, which leaned towards being social and emotional in nature, for example, empathy, leadership, and adaptability.

The survey suggested that the need to address skill gaps is imperative with most respondents (58%) saying that closing skill gaps in their companies’ workforces has become a higher priority since the pandemic began. And of five key actions to close these gaps – hiring, contracting, redeploying, releasing, and building skills within the current workforce – skill building is more prevalent now than it was in the months preceding the pandemic. Sixty-nine percent of respondents said that their organizations do more skill building now than they did before the COVID-19 crisis.

The redeploying of talent to new roles often requires some degree of skill building and has become more commonplace over the past year with 46% of respondents reporting an increase in redeploying talent within their organizations.

Additionally, the results of the survey suggested that this commitment to skill building represents more than a one-time investment. More than half of respondents said that their companies plan to increase their spending on learning and skill building over the next year, compared with their investments since the end of 2019.

 

 

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