Strategies to Navigate the Current Global Labor Shortage

Strategies to Navigate the Current Global Labor Shortage

Strategies to Navigate the Current Global Labor Shortage

The reasons for the ongoing global labor shortage are complex, involving several contributing factors. These include an aging global population, changing worker expectations, and a growing need for technology skills. These talent issues are further compounded by rising costs, concerns about a global recession, and supply chain problems.

These factors place employers in a tough spot, requiring them to find effective strategies to attract and hire skilled workers while managing costs and adjusting their workforce to market changes. To address these challenges and stay competitive, it’s crucial for employers to develop a proactive plan to tackle the talent shortage early on.

Addressing the Labor Shortage

Recent studies indicate that 87% of employers worldwide are struggling to find the necessary talent, with many expecting these challenges to increase. Your organization cannot afford to delay addressing this issue. The time to act is now to ensure you are prepared to meet both current and future workforce demands.

Here are several proactive steps you can implement immediately to address the labor shortage:

1. Invest in Employee Training

The skills gap and labor shortage are persistent challenges that are expected to continue, if not worsen, through the end of the decade. For instance, the McKinsey Global Institute forecasted in 2017 that up to 375 million workers globally would need to acquire new skills and switch occupations by 2030. As we approach this deadline, these projections may actually increase. Current estimates suggest that by 2030, 40% of the European workforce will need some form of skills training.

As technology and automation evolve, it may become challenging to secure the necessary tech skills solely through hiring efforts. A powerful solution is to invest in training your existing workforce to meet the technological demands of your company. Upskilling and reskilling employees not only garners the specific competencies needed to adopt new technologies but also enhances overall productivity.

Traditional methods like classroom instruction, mentorships, and apprenticeships remain valuable. However, modern employers have the advantage of utilizing online training platforms, which allow employees to learn at their own pace and enable training of a larger number of staffs more efficiently.

2. Leverage HR Technology

HR technology is predicted to grow into a $30 billion industry by 2025. Currently, 8% of HR leaders are planning significant investments in this area. If your company hasn’t yet invested in modern HR technologies, or if your systems are outdated, now is an ideal time to upgrade.

Advanced technology can enhance your recruitment efforts by automatically sifting through applications, sending automated replies to candidates, utilizing AI for precise candidate matching, streamlining the reference verification process, and facilitating video interviews, among other functionalities. Furthermore, HR technology plays a crucial role in workforce management and boosting communication across the company. By fully integrating HR technology, your organization can significantly improve both recruitment and employee retention strategies.

3. Hiring Inexperienced Workers

As the challenge of finding skilled labor intensifies, companies are increasingly turning towards in-house training programs. This shift will alter the kinds of candidates you seek. Rather than focusing solely on candidates who already possess the necessary skills, your company should also consider those who are trainable or suitable for apprenticeships. Begin by identifying candidates who demonstrate strong soft skills like problem-solving, adaptability, critical thinking, and communication—traits that suggest a capacity for learning. By broadening your candidate criteria, you’ll not only enlarge your talent pool but also ensure that you hire individuals who can evolve alongside your company.

4. Utilize Talent Analytics

In today’s data-driven world, it’s essential to begin by identifying the specific data points your company needs to monitor. Recommended metrics include turnover rates, recruitment expenses, retention rates, and absenteeism. It’s also vital to assess which data is readily available and to understand the current systems and tools in use. This groundwork will guide the effective gathering and monitoring of relevant data.

5. Revise Your Employee Value Proposition

The pandemic significantly altered workers’ expectations, underscoring the importance of a healthy work-life balance. While salary continues to be the primary reason for job changes, the desire for an ideal work-life balance has emerged as a nearly equally important factor. Modern employees are looking for more than just competitive salaries; they also value financial and non-financial benefits such as flexible working arrangements, mental health support, and generous family leave policies. Recognizing this shift in expectations is crucial for employers, who should update their employee value proposition (EVP) to meet these evolving needs of the post-pandemic workforce.

6. Strengthen Your Compensation and Benefits Package

Creating a robust compensation package aligned with your company’s Employee Value Proposition (EVP) is essential. If it’s been over a year since your last review of employee compensation and benefits, now is the time to reassess. Given the significant shifts in worker expectations in recent years, ensuring your compensation is still competitive is critical. Moreover, with global inflation affecting employees worldwide, it’s reasonable for them to expect salaries that keep pace with rising costs. Recruitment agencies like Primoris Systems offer salary research across various markets, aiding in making appropriate adjustments.

Additionally, your benefits package must evolve to align with changing worker expectations. Modern employees are increasingly seeking benefits that support a healthy work-life balance, safe work environments, mental health resources, and opportunities for professional growth. By tailoring your benefits to meet these modern demands, your company can differentiate itself from competitors and attract the talent it needs.

7. Prioritizing Diversity in the Workforce

Research indicates that 78% of employers recognize the benefits of a diversity plan, crediting it with enhancing their hiring processes. Why the strong focus on diversity? Firstly, it’s evident that a diverse workforce boosts creativity and productivity. Additionally, hiring individuals from various backgrounds, with different skills and experiences, not only widens your talent pool but also enhances overall recruitment outcomes.

Moreover, there is a growing desire for more diversity among employees, particularly the younger generation. Data from the Pew Research Center shows that 56% of U.S. workers are calling for increased diversity. In the UK, 32% of workers reported they would decline a job offer from a company that lacks active efforts in promoting diversity and equity.

Embracing diversity not only propels your company forward but also aligns it with the needs of an increasingly globalized economy.

8. Utilize Contingent Talent

Research indicates that over 75% of employers are currently employing temporary staffing options, including contingent or temporary workers. As skill shortages become more pronounced in the coming years, the need for such workforce solutions is likely to grow. Employing contingent workers offers numerous advantages, such as the flexibility to adjust your workforce size based on varying production needs. Properly managed, a contingent workforce can be a cost-effective way to boost productivity.

The key is to establish a robust framework for managing this temporary workforce effectively. This includes having systematic processes for hiring, training, and scheduling shifts for contingent workers. At Primoris Systems, our extensive experience in managing contingent talent equips us to provide the comprehensive support your company requires to thrive.

9. Boosted Employee Engagement

As the talent shortage is projected to persist for several years, many organizations are focusing on employee retention. The objective is to minimize staff turnover and subsequently reduce the number of open positions. To achieve this, companies must actively devise strategies to encourage their employees to remain. Effective approaches include recognition and rewards programs, frequent check-ins, empathy, and robust, clear communication—all proven to enhance workforce engagement. Engaged employees are typically more productive and more likely to stay with the company for extended periods. By establishing a solid employee engagement strategy, companies can not only improve retention rates but also decrease absenteeism and boost profitability.

10. Redeploy Your Workforce

As acquiring the right skilled talent becomes increasingly challenging, one effective strategy is to capitalize on the internal mobility of your existing employees. Recent research indicates that around 60% of a company’s vacant positions can typically be filled internally. Effective redeployment hinges on providing robust upskilling and reskilling programs. It’s crucial to establish a clear, transparent process for career development and advancement within your organization. Additionally, leveraging digital tools can help pinpoint which employees are well-suited for specific roles.

11. Partner with an HR Solutions Company

Collaborating with an HR solutions provider can offer essential support in acquiring and retaining the necessary talent to help your company thrive post-pandemic. At Primoris Systems, for example, we grant immediate access to a vast, pre-screened candidate pool, assisting in the filtration of applicants to find those who meet your specific requirements. For businesses managing large-scale workforces, we also oversee the entire talent management process, enhancing employee communication, training, and engagement across the organization.

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