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78% of employers in IT report challenges hiring

US hiring remains strong despite talent shortages

According to the Q2 ManpowerGroup Employment Outlook Survey, the global demand for talent remains strong despite cooling in some regions. The survey, which polled over 38,000 employers in 41 countries and territories, found that the Net Employment Outlook stands at +30% in the U.S., up 1% from last quarter but down 5% from last year. North America has the highest hiring expectations among all world regions, with the IT industry showing the most optimistic outlook (+34%), followed by Communication Services (+30%) and Financials & Real Estate (+29%).

The survey also found that the global talent shortage continues to grow, with 78% of employers in IT reporting challenges hiring. However, the survey suggests that workers who have been laid off in recent reductions will soon be reabsorbed into the market.

Despite the robust hiring outlook, employers remain cautious due to “Pandemic Paranoia,” with many holding onto and hiring business-critical talent. The concentration of demand in real-time data is reflected in the survey, with IT leading the way in hiring plans despite layoffs dominating the headlines. Workers with in-demand tech and soft skills will find themselves in high demand, and the need to reskill for tomorrow’s jobs remains urgent as talent shortages grow.

In North America, employers in the U.S. (+30%) report a moderate increase (+1) in their outlooks compared to last quarter. However, employers in Canada (-6%) report a decrease, while outlooks in Puerto Rico remain unchanged (+26%). Both the U.S. and Canada expect weaker hiring compared to intentions year-over-year, with the U.S. down 5% and Canada down 10%.

Becky Frankiewicz, ManpowerGroup, North America, President and Chief Commercial Officer commented: “This labor market continues to defy signs of economic gravity with another robust hiring Outlook for the quarter ahead. Employers are still impacted by Pandemic Paranoia – they remember how long it took to bring workers back and are holding onto and hiring business critical talent. We’re still seeing concentration of demand in our real-time data, and this survey reflects concentration too, with IT leading the way in hiring plans despite layoffs dominating the headlines. Workers with in-demand tech and soft skills will find themselves in high demand and the need to re-skill today for tomorrow’s jobs remains urgent as talent shortages grow.”

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Could robots replace America’s missing factory workers?

Saman Farid of San Francisco start-up Formic says one robot arm can do the work of up to eight people 

Joe Biden heralded a “manufacturing boom” in his state of the union speech earlier this month. He said that his policies had unleashed this boom and that companies, apparently, were rushing to build factories and bring home plants shipped overseas in previous decades. 

However, the more sobering reality is that not many people want to work in manufacturing because as of December 2022, 760,000 factory jobs remain unfilled, according to official figures. 

Every day, 10,000 baby-boomers retire — and those who replace them in industry often do not stay. Manufacturing has an annual staff turnover rate of 40%, meaning that every two and a half years, a typical facility’s entire workforce has to be rehired. 

Saman Farid ran Comet Labs before launching Formic two years ago. Comet Labs is a venture capital firm that specialised in robotics start-ups and he believes he has a solution to the manufacturing crisis. The 36-year-old entrepreneur has set up a “robot staffing agency” that brings in machines to do the jobs firms are struggling to fill. He has said that a single robot arm installed by his San Francisco start-up Formic can do the job of up to eight people. 

 RISE OF THE MACHINES  

Scare stories of machines replacing humans have done the rounds for decades — but in manufacturing, Farid argues, the need is pressing. The industry is running far below capacity due to the acute labour shortage. 

Jay Timmons, Head of the National Association of Manufacturers, a trade group that represents more than 14,000 factory owners, said the biggest problem for “99.9%” of his members is finding people. 

Timmons said: “The typical factory we go to is 50 to 70% under-utilised, and it’s all because there’s just not enough labour.”  

Farid added: “For American industry to be competitive, the only answer is way, way more robots — and not like one here, one there, but how do we get hundreds of thousands of robots into factories?” 

For most companies, though, automation is hard. It entails a granular breakdown of every function inside a plant, deciding which of those jobs can be done by a machine and then spending hundreds of thousands of pounds on a robot that may, or may not, work as expected. 

Farid knows this all too well. Before launching Formic two years ago, he ran Comet Labs, a venture capital firm that specialised in robotics start-ups. Time and again, companies he backed would struggle to sign up customers because the risks and complexity of automating their processes were too high. 

That pain point led, Farid said, to the birth of Formic, which has taken a “robot as a service” approach. It maps a company’s operations, figures out the tasks that are best suited to automation, and then installs a robot that is paid an hourly wage. If it fails to perform, Formic doesn’t get paid.  

Farid said: “The tech for very productive robots has existed now for ten years, but adoption is extremely low because there is so much risk and complexity. And so … the typical response of the factory owner has just been, ‘I can’t do this.’ ” 

The problem is not unique to America. The CBI’s employment trends survey last summer found that three-quarters of businesses struggled to fill vacant roles. Perhaps that robot really is coming for your job, after all. 

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Talent attraction and retention biggest challenge, say private capital funds

Automation and cyber security roles cited as the biggest concern

According to a new study commissioned by Intertrust Group1, three-quarters (75%) of private capital funds are struggling to recruit and retain new talent with skills shortages at their most acute in areas such as automation and cyber security. Other major problem areas were said to include the widening skills gap due to changing demands (44%) and Diversity, Equity, Inclusion and Belonging (DEIB) related challenges (41%).

There are fears among private capital fund leaders that the talent gap between vacancies and suitable candidates will only increase – 60% of private capital fund managers expect this to widen over the next five years.

The study, Introducing the Halo Framework, based on interviews with 150 senior decision-makers in private capital firms, hedge funds and private wealth managers with between US$12.5b and US$29.5b in assets under management, reveals that many fund managers are no longer insisting on specialist experience and are instead looking for people with a more generalised background who they can upskill or reskill across different function areas and rotate them as necessary.

As a result, more than 40% of respondents believe their existing training programmes will be insufficient and will therefore become a key challenge over the next five years unless they are upgraded.

Intertrust Group’s study highlights the talent gap is particularly acute in automation and cyber security, with over half (56% and 51% respectively) claiming they will need to develop workaround solutions to mitigate the skills shortfall.

The war for tech talent was cited as the biggest obstacle facing private capital firms looking to improve their data analytics and onboard next-generation technology, with almost two-thirds (64%) admitting that they struggled to recruit and retain suitably qualified staff.

Chitra Baskar, President, Fund Solutions, Intertrust Group, commented: “Most private capital firms are struggling to recruit into highly competitive technology-related roles and are increasingly seeking support from their strategic outsourcing partners to combat this. Sophisticated service providers invest a substantial amount in ongoing training and competency building within their teams and are well placed to plug in-house talent shortages.

“Our Halo Framework highlights the importance of ‘empowering your people’ as one of its core areas of focus – encouraging firms to recruit from all backgrounds, develop skills and knowledge with a tailored talent management strategy, rotate jobs so staff experience different value streams, and build a knowledge exchange system.”

A trend noted in the research is private capital firms finding it difficult to retain top talent. Firms are on a journey of business and technology transformation and to succeed, they will need people who understand next-generation technology systems, different alternative asset classes, regulations, risk management, data analytics, and mid-/back-office operational aspects. Post-COVID, developing an effective return-to-work policy and a robust hybrid working model is essential, with around 43% of the surveyed financial services firms who believe that more than a quarter of their workforce will work remotely in the future.

1 Intertrust Group’s study: Introducing the Halo Framework was conducted by Everest Group. The findings are based on interviews conducted between August 2022 and September 2022 with industry experts and a survey conducted among 150+ leaders and business heads of private capital firms, hedge funds, and private wealth managers based in EMEA, Asia Pacific and the Americas.

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75% of companies globally reporting 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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62% of employees report inadequate flexible working tools

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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50% of employers struggling to land talent

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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What workers want in 2022 – data revealed

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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US workforce has grappled with a mass exodus of parents

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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US services economy expands

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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79% of companies hiring talent into unsuitable roles 

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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