What Are the Main HR Challenges
to Overcome Talent Shortages?
Since the coronavirus pandemic in 2020, the global job market has been largely unstable. This instability is mainly a result of increased automation across different sectors. Another reason is the high number of staff resignations due to unfavorable working conditions. The US economy, which has taken the biggest hit from this instability, is gradually recovering. A recent report from the US Chamber of Commerce shows that in 2023, the nation added a whopping 4.6 million jobs, taking the unemployment rate to a historic low. However, despite these impressive numbers in job creation, H.R. executives, especially in the tech space, are still having difficulties filling critical roles.
HR managers believe there is a global talent shortage crisis which is leading to the loss of billions of dollars in technological innovations and scientific research. Most human resource managers have considered this crisis the biggest threat to corporate sustainability and growth.
As a HR manager looking to overcome this crisis, Lucca software provides solutions for HR & Finance. These solutions will help you develop a robust recruiting and retention strategy for your firm. This article will further highlight the HR challenges HR executives face in talent shortage and how to overcome them.
Is There a Globally Talent Shortage In 2023?
The short answer is yes. 2023 has been a year of recovery for some of the world's biggest emerging economies. It is a year that has seen the unemployment rate plummet to post-coronavirus pandemic levels despite the increase in the use of automation. However, the usage of automation has created a high demand for skilled labor capable of making and updating these automated machines. As of March 2023, the number of open jobs in the US (9.7 million) outweighs the number of unemployed people (7.1 million). This is to say that if every unemployed person is given a job, there will still be over 2.5 million open jobs. These figures showing the US level of talent crunch is similar to other major economies across Europe, Latin America, Africa, and Asia.
A recent survey by Paycor's H.R. shows that the talent shortage crisis might be around for a long time or even become permanent. The survey also highlights that the global talent shortage could grow to over 90 million, costing the world trillions of dollars. It is also important to note that the talent crunch crisis does not affect all sectors. Sectors like construction, transportation, and agriculture are not currently affected by this crisis.
HR Challenges and Solutions
Here are some common HR challenges and solutions.
Build a Talent Pipeline
Many fresh graduates are eager to work and make a name for themselves in their respective fields. This set of people are considered the future of the workforce and should be the target for organizations looking to achieve sustainability in skilled talents. To tap into this vast pool of talent, companies must develop a robust college recruitment strategy that allows them to pick the best students even before they graduate. This strategy must include incentive packages based on their performance within and outside their academic work. Creating a recruitment pipeline will ensure your company gets the best talents that are motivated enough to leave a lasting positive mark.
Make an Effort to Retain Your Staff
Before you go about searching for young innovative talents, retaining the existing ones should be your top priority as an HR manager. The tedious task of finding and hiring new talents is why staff retention is considered the better method of managing the talent shortage crisis. In order to retain existing talents, HR managers must be able to balance the monetary and non-monetary talent retention strategies.
This is important because the common financial strategy of only increasing salaries is becoming less effective. When implementing the monetary strategy to retain existing talents, you must ensure it's a robust strategy beyond increasing daily or monthly wages. It must be a strategy built on performance and a show of appreciation and support in events such as weddings, birthdays, anniversaries, and milestones.
Making the workspace conducive enough for non-monetary strategy should be your top priority. This can be done by increasing the level of communication within the company, creating an open and healthy working environment for all employees. To make this strategy work, the HR manager must be skilled and experienced to encourage honest feedback and drive inclusive discussions at the top.
Outsource Jobs to Freelancers
It's been projected that by 2030, 48% of the US workforce will be freelancers. This group of people are fast, skilled, reliable, and experienced. They might seem like an easy temporary fix to the talent shortage crisis, but they can become a permanent fix in the long run.
One reason is that freelance services are cost-effective and require little resources to maintain. Freelancers can also save corporate bodies the time and resources needed to hire and retain new talents. On average, companies take up to 2-4 months to fill specific positions. However, hiring freelancers can be done within a day or two, fixing one of the most critical HR challenges.
Be Smart and Fast
Due to the shortage of talent, every second counts in the recruitment process. This means you need to be on high alert whenever there's talent available on the market, as dozens of other companies will be competing for their services. To be ahead of the curve, optimizing your recruitment process is imperative.
With an optimized recruitment process, HR managers can conduct compelling interviews and deliver responses within the two weeks waiting period. The effectiveness of the recruitment processes can be evaluated by the number of high-value talents that have been recruited. Before recruiting any talent, you should ensure they fit perfectly into the open position so as not to hire the right person for the wrong job.
The talent crunch is not expected to end anytime soon, so as an HR manager, you must be smart enough to develop strategies that will lead to high retention and recruitment of talent.