What are the most critical topics in human capital management
that should be on your radar in 2013? Topic #8: Workforce Imbalance.
Human Resources is a balancing act. It’s a discipline that’s always teetering between hiring the best skill set and delivering opportunities within the current talent pool.
And now we’re faced with another imbalance – that of high unemployment rates yet companies not finding talent with the right skill set. We’re faced with a talent gap. According to a recent report by the consulting firm Bersin & Associates, 51% of companies struggle to hire the right talent despite high unemployment.
How did we get here?
This imbalance has to do with the push towards globalization. Companies are aggressively moving products, operations and technology into new markets in order to sustain competitive growth. With this comes the need to mobilize talent in these markets while also retaining and engaging talent in other core areas of the business. This skills gap is especially prevalent in technical and functional roles, causing a strain on hiring and leadership.
Specialization has changed the nature of work
While innovation and transformation provide a competitive advantage, the advantage is driven by employees with deeper knowledge and more specialized skills. However, companies typically invest in the skill-set knowledge, not this level of specialized learning. According to one study, less than 30 percent of workplace performance is knowledge-related as a result of formal training. On the other hand, approximately 70 percent receive informal learning such as coaching, leadership and incentives. Companies need to invest in strategic talent development to advance the specialization of its workforce.
Contractors are here to stay
Shareholder value is putting pressure on companies to cut expenses and drive efficiency. This has been an open invitation to grow the contract labor force. As companies enforce hiring freezes, they still need the work to be done. While contractors will never fully replace the full-time employee, hiring contingent labor saves the employer on overall benefits costs and other areas of expense. Contractors are short-term, for the most part, so this temporary labor also causes imbalance in the workforce.
Skills gap is emerging
A skills gap is emerging that is also causing a chasm in the workforce. The abovementioned Bersin study indicated that only 32% of college graduates have “excellent” skills to enter the workforce. Missing are capabilities like professionalism, creativity and innovation, learning and self-direction, and critical thinking/ problem-solving.
One field in which this is causing a major setback is the IT sector. While job opportunities continue to rise, it’s difficult to fill those needs with the right personnel. A 2012 IBM Tech Trends Report looked at four emerging technology trends for 2013: mobile, cloud, social business and business analytics – all of which will be considered pivotal technologies in which more than 25 percent of enterprises plan to increase investment. However, only one in 10 organizations has the skills it needs to grow these technology areas.
Companies experience resume overload
With all the online job aggregator sites and buzz about social recruiting, companies still have a hard time finding the right job candidates – mostly due to the fact that they're drowning in resumes. For job seekers, applying online is the equivalent of sending a resume into a black hole.
Blogger John Hazard at ZDNet wrote, “Finding qualified candidates is now like finding a specific needle in a stack of slightly different needles.”
Role of Technology
Technology plays a key role in understanding the talent gaps and better mobilization of the workforce in order to counter this “imbalance.” Technology can help organizations to focus on specialization while also hiring and optimizing a qualified talent pool. Aquire Insight, for example, has tools that companies can use to identify specific skill sets among the talent pool and track these skill sets as well as identify areas that still need to be developed. The boardroom-ready analytics inherent in this software can also be used to identify potential leaders and track their development in preparation for future roles.
Only 40 percent of organizations have conducted strategic workforce planning assessments to determine their needs for the next five years. Where does your organization stand? Are you prepared to transfer knowledge from the Baby Boomers that are retiring at a rate of 6,000 per day? Do you know how to transfer this knowledge to new talent? Workforce planning will not only be crucial, it will be a strategic advantage for those companies looking for new areas of growth.
>> Stay tuned to the Peoplefluent Blog as we address 5 other critical topics in human capital management. You can also access the replay of our recent webcast “13 for 2013: Key HCM Topics” here.