McKinsey & Company conducted a study which outlines the importance of retaining and hiring skilled employees in a competitive landscape. The study was released in 1997 and now, over 24 years later, the coined 'war for talent' continues. The pandemic put pressure on IT decision-makers, forcing 59% of them to accelerate their digital transformation efforts. How did this affect the job market? Well, now more than ever, the surge in demand for digital skills is sky-rocketing and organisational abilities to retain and source talented staff continues to rise.
Talent shortages became the number one concern for businesses in 2019. In the 2018 version of the same study, this was only the third top risk behind accelerating privacy regulations and cloud computing. Today, talent shortage risks are at a 15-year high according to the international recruitment company, ManpowerGroup. Soft and hard skill sets are becoming more difficult to find, with nearly 69% of businesses having difficulty filling vacant jobs. And the pandemic has become a key factor in re-shaping in-demand skills.
Factors affecting the competitive advantage of a company include technological advancements in big data, robotics and artificial intelligence (AI). These changes are transforming the way we work and increasing the demand for digital skill-focused staff. Enter the idea of a ‘supply and demand talent conundrum’. The increase in demand stems from digitization trends for staff possessing tech-based skill sets. And currently, this increase in demand isn’t being met with enough employee supply, with skills such as web development; that take time to master. The conundrum? The cost of hiring staff increases and with the pandemic being an economic factor taking its toll on organisations financially, the aforementioned ‘war for talent’ cycle continues with a ‘who can afford who’ debacle.
The ‘war for talent’ statistics
Think of it this way, by 2030, if the demand and supply for talented staff does not rectify itself, the global talent shortage is anticipated to reach 85.2 million people. That’s around U.S. $8.5 trillion in unrealized annual revenues. Although these losses will affect all industries, knowledge or skill-intensive sectors with financial services, manufacturing, business services and technology likely to feel it the most. Automation and AI continue to gain traction as ways to take care of time-consuming tasks and improve all-around efficiency and quality assurance levels. But considering that humans are required to create this type of technology, without skilled workers, these productivity gains will stay undeliverable and unrecognizable for businesses.
Global unemployment has reached well over the 200 million mark thanks to the pandemic. With this many unemployed people around the world, you would assume job hunters would be able to choose from a large pool of quality, skilled workers who suffered sudden employment losses or financial turmoil during this time. Research suggests otherwise. Applicants are now in control. Whether it is a result of trust issues developed because of the pandemic, candidates are now consciously putting time and effort into deciding who they want as their future employer, who they believe will take care of them during another economic disaster and who will make them feel valued rather than simply help them keep a roof over their head.
Another issue: education simply cannot keep up with the surge in digitization trends. While they are investing as much time and effort as they can to get the younger generation of today interested in tech-based courses, educational institutions still aren’t providing enough graduates to keep up.
The in-demand skills and roles of today
As digital disruption accelerates, so does the need to find employees with the right mix of technical strengths and soft, ‘human’ skill sets. The top 5 in-demand categories where roles are the most in-demand, according to ManpowerGroup, include the following:
- Operations and logistics
- Manufacturing and production
- Sales and marketing
- IT and data
- Administration and office support.
Leading recruitment agency, Robert Half, released the ‘Demand for Skilled Talent’ report, which outlined skills combining IT operations and software development have increased in demand by 344% 2020 - 2021 versus 2015 - 2016.
Looking into in-demand soft skills, LinkedIn, states them to be:
- Emotional intelligence.
LinkedIn goes on to list their top 10 in-demand hard skills; further illustrating the impact of digitisation on the job market and why tech-focused skills are becoming more and more difficult to source. These hard skills include:
- Cloud computing
- Analytical reasoning
- Artificial intelligence
- UX design
- Business analysis
- Affiliate marketing
- Scientific computing
- Video production.
What can businesses do to become a ‘preferred employer’
Prioritise on-the-job training and employee education. Focus on training and upskilling your existing employees. More than half of all employees will require significant re-training or upskilling in order to meet the demands of recent economic changes. You need to set yourself apart from other businesses that are willing to pay more to employ similar staff to remain competitive and investing in development programs is a good starting point.
Weekend-long seminars and training sessions are a thing of the past. Instead, the latest trend involves tailoring upskilling opportunities to your individual staff needs. Your leaders need to sit down with their teams individually, determine what skills are strong and don’t require further development, but most importantly, what skills do. Then, schedule relevant training for each employee. Not only will you see a spike in productivity and efficiency levels, but staff satisfaction and retention rates will also go up.
These ‘skill gap’ sessions can help you pinpoint what skills your company is lacking. That way, you can potentially train existing employees, or, if it’s financially viable for your business, hire new ones with the appropriate skill sets to fill the gap. By investing in your current employees, you’ll foster a positive employee reputation, both inside and outside of your organisation. That way, when you actively go out to source skilled talent, a person may choose your business over another, despite the latter offering a higher salary.
How is outsourcing actively helping businesses fight the global talent shortage?
An increase in demand and a decrease in supply will always result in the demand product becoming more costly and sometimes difficult to find; these are the principles of economics. Now, outsourcing is an alternative resourcing strategy that can help rectify this issue by allowing businesses access to a global pool of quality talent. All while reducing employment costs by up to 70% in the process.
For example, one market leading professional services organisation was seeking a cost-effective resourcing method that would support rapid business growth and help maintain a competitive advantage in an ever changing marketplace across a variety of roles. They decided to embrace outsourcing as the solution.
Launching operations with just two full-time outsourced employees, in three years, their outsourced team has grown to a total of 16 full-time employees across a diverse range of vocations including web development, managed services, administrative support and payroll.
The integration of an outsourced team allowed them to grow their client base by 375% in three years, and also offer additional solutions to remain competitive in a crowded and intensively competitive market.