Employment Paradox: Unemployment, Skills Gaps, Difficulty in Hiring
As the global economy slowly recovers, more and more employers tell us they are seeing an increasingly difficult talent environment ahead. As I discussed in my keynote at IMPACT (video available), the global shift in demand to emerging economies, coupled with the economic recovery, has created skills gaps in almost every major industry. A few anecdotes to consider:
1. Siemens USA, which one of the biggest manufacturers of turbines, electrical machinery, and new energy systems, has replicated the apprenticeship program it developed in Germany to train workers in the US. The company has directed its recruiters to start actively recruiting manufacturing professionals from competitors because the talent is not available in the US marketplace.
“There is a mismatch between the jobs available and the people we see out there,” said Eric Spiegel, the Chief Executive of US Siemens business, recently quoted in the Financial Times.
2. Manpower Group, one of the largest global staffing agencies, reported last month that hiring intentions are at the highest levels since 2008, with 20% of all employers planning to add staff in Q3 of this year. Yet skills shortages have become more acute, creating a growing mismatch between demand and supply.
Yet talent gaps have grown significantly. “Employers in India, the United States, China and Germany report the most dramatic talent shortage surges compared to last year. In India, the percentage of employers indicating difficulty filling positions jumped 51 percentage points. Nearly one in four employers say environmental/market factors play a major role in the talent shortage—employers simply aren’t finding anyone available in their markets. Another 22% of employers say their applicants lack the technical competencies or “hard” skills needed for the job, while candidates’ lack of business knowledge or formal qualifications is the main reason identified by 15% of employers.”
“Approximately three-quarters of employers globally cite a lack of experience, skills or knowledge as the primary reason for the difficulty filling positions. However, only one in five employers is concentrating on training and development to fill the gap. A mere 6% of employers are working more closely with educational institutions to create curriculums that close knowledge gaps”
3. The talent-skills gap is forcing a change in HR strategy. Our recent meetings with a wide variety of clients (Deloitte, Accenture, McKinsey as well as Network Appliance, Xerox, Kaiser Permanente, United Health Group, Cypress Semiconductor, Tata, and HP) all show that larger organizations are rethinking their talent strategy to deal with a world of skills imbalances. Some of the major trends we are studying this and next year include:
* The integration of the talent acquisition function with internal talent management, to dramatically improve internal talent mobility
* Reinvestment in core employee development programs (Deloitte just opened a brand new Corporate University) to enable the organization to hire younger, lower skilled workers
* Shift in strategy from formal training to a strategic focus on informal learning (including a strong focus on a peer-to-peer learning culture) to help share internal expertise with new employees much more quickly
* A reinvestment in learning technology and systems (L&D spending is up 11% this year, read our Corporate Learning Factbook for more details)
* A total re-thinking of talent acquisition strategies to deal with both social networking and the need to aggressively recruit passive, skilled candidates
* A shift in HR management policies to develop a strategic program for the management of contingent workers (consultants, part-time workers, alumni, contract specialists) so that deep skills can be acquired wherever they may be (we will be publishing more on this topic later in the year).
The talent management challenges of the next few years are going to be different – I encourage you to listen to my comments in the video link above so you can understand how the new “Borderless Workplace” will drive your HR and talent strategy for the year ahead.
PS – watch for some very exciting new product announcements coming next week as the national SHRM conference kicks off in Las Vegas. I will be blogging about several here in the coming days.