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Tight Labor Market: Here’s What You Should Focus On
“Candidates have so many options today. If a company requires a degree, two rounds of interviews and a test for hard-skills, candidates can go down the street to another employer who will make them an offer that day,” points out Amy Glaser, senior vice president of Adecco Group. This statement perfectly describes the current state of the labor market, probably the tightest it’s been in years.
Just for the record, companies in the United States have added jobs every month since October 2010. This resulted in low unemployment levels (under 4%) and more available jobs than at any time since 2000. For sure, a tight labor market is a good piece of news for job-seekers. But what does it mean for companies who are hungry for talent? How should businesses approach this situation to stay competitive and keep growing?
New rules of recruiting talent in a tight labor market
The majority of companies (73%) have begun to take into account new labor conditions by rethinking their recruiting strategies. It mostly deals with reconsidering their job requirements, the needed experience, and degrees.
Statistics show that in 2018, job postings that request a college degree fell to 30%, and now only 23% of entry-level jobs require candidates to have three or more years of experience. For example, at some IBM locations, a third of employees do not hold a degree. Bank of America Corporation posts 7,500 job openings and less than 10% of them require a degree.
Why do degrees play a less important role in hiring new employees?
Firstly, organizations can broaden their talent pool and bridge the talent gap more quickly by bringing on candidates with diverse educational background, experience, skills, and vision. Because who said that people with college degrees are better than self-taught ones?
Secondly, companies can more easily shape and develop their in-house talent. We know that the shelf life of knowledge is shrinking rapidly. That means that by the time a person graduates, a lot of information they’ve learned will become obsolete. Education institutions simply can’t keep up with the fast-paced technological development, so students don’t acquire a lot of necessary skills, especially soft skills. This is the reason why companies shift their focus towards what they themselves can teach new employees rather what they already know.
For instance, Novelis, an industrial aluminum company, headquartered in Atlanta, created an in-house school several years ago when it realized it had to rev up production. More than 11,500 employees in 24 facilities received training at this experimental school to develop new skill sets and update their existing knowledge.
By lowering the amount of required work experience and giving opportunities to candidates who don’t necessarily hold a degree, companies can provide in-house training and develop employees in the direction they need.
Efficient onboarding and talent retention are only possible via continuous training
Following up on hiring talent the right way, it’s important to mention a trite HR motto: hire for attitude, train for skills. Before jumping onto onboarding, it’s crucial to make sure that your candidate is a good cultural fit for your company or they won’t stick around for long. In fact, studies have shown two very interesting points:
- Skilled and experienced employees with rotten attitudes fail quickly.
- Unskilled and inexperienced employees with excellent attitudes succeed in the long run.
Ben Glazier, a founder of Glazier Design, supports this idea by telling about his own experience of hiring new employees.
Mindset is so important. I had a very skilled employee here last year who came well recommended. But despite being very impressive at the interview, she just didn’t want to work, had no enthusiasm, curiosity, entrepreneurship–big mistake that I was fooled in the interview into thinking that the skills were so important.
What does it mean for companies? If you see that a candidate opts for continuous learning and development, if you see them in your organization in the future and don’t consider as a passing phase, if you know that they will become an asset for your team, don’t worry about their lack of skills or experience. Instead, give them a chance.
Richard Anderson, head of the Savile Row tailor, says that it usually takes six to eight years to train as a tailor but to get in the door candidates should have the right attitude. Since young people, 16- to 23-year-olds, don’t possess relevant skill sets, Anderson looks for the correct attitude.
By hiring employees with little or no experience, it’s crucial to focus on the right onboarding strategy. The time spent getting people up to speed is all about personalized, ongoing training, especially when it comes to employees with a lack of skills or experience.
To close talent gaps efficiently and grow business, companies should emphasize employees’ productivity, which is the key to health, happiness, and engagement at work, as Josh Bersin writes. Learning experience platforms (LXP) can come in handy here. By constantly measuring current skills, defining knowledge gaps, and aligning training to business goals, LXP creates learning journeys tailored to each individual’s needs.
And it’s more than simply presenting relevant information in an interactive way. It’s also about being both a mentor and a personal assistant in each employee’s pocket. For example, smart notifications help employees focus on and prioritize urgent tasks that need to be done. If employees encounter difficulties with performing them, then a smart system offers relevant business learning activities driven by a lack of skills or knowledge, thus removing all hurdles.
If people are confident in what they do, get on-demand feedback, and have opportunities for professional development, they are more likely to stay. So if you see promising employees who overgrew their current role, train them for promotion to senior positions. This will be more cost-effective rather than hiring someone from outside the organization and will also improve dedication and retention.
When you hire the right people and continuously develop them throughout their professional life at your company, you minimize business disruptions, close talent gaps, and create a high-performing workplace.
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