28 Oct How Can Companies Recruit When Demand Outpaces Supply?
Have we reached hiring capacity here in the U.S.?
Maybe not entirely—jobs are still getting filled, after all—but it’s no secret that demand for talented labor outpacing supply by a large margin. We were at 3.6% unemployment in October 2019, which is great from an economic perspective, but less so for companies with openings to fill.
There’s a numbers gap, but there’s also a skills gap—something recently explored in depth by The Society for Human Resource Management (SHRM) and its 2019 Global Skills Shortage report.
According to their research, 83% of HR professionals had trouble recruiting the right candidates in the past 12 months. And of those, 52% agreed that the gap has worsened over the past two years.
What solutions do companies have, here?
Which strategies address the skills gap?
The SHRM took a crack at comparing the most common strategies used to fil the skills gap against the most effective strategies used. The most common remedies include the following:
- Boosting advertising of openings
- Building talent pipelines through educational institutions
- Outsourcing recruiting efforts
Compare this with their list of most effective remedies, which looks a bit different:
- Providing on-site training to staff
- Starting new skills training programs for new hires
- Leveraging eternal workforces (contractors, etc.)
In other words, there’s a clear disconnect in what companies are doing and what HR experts recommend.
The role of on-the-job training
Looking at these results, we can see that the most common efforts are all aimed at building out the candidate pipeline across various channels and casting as wide of a net as possible; on the other hand, the most effective strategies involve curating the resources that employees already have. It’s less about finding the perfect person for the role and more about training existing staff to take on new roles (supplementing with outsourced work as needed).
This is an interesting challenge for companies hiring skill labor in tech fields. The SHRM notes that high-tech industries rely on continuing education to develop their workforces, and clearly, the education side of things isn’t going anywhere. Though based on their recommendations for remedies, college degrees alone may not be enough. Dedicated on-the-job training may be necessary for addressing the growing skills shortage.
And when look at the prognosis for higher-level tech roles, this approach seems valid. For example, research into data scientist roles estimated that U.S. demand for data scientists would outpace supply by 50-60% in 2018. And a result, 63% of companies surveyed offered some type of formal training in-house to those who earned the job.
Multi-modal approaches to recruiting and training
The skills gap is a growing problem for companies of all sizes, and solutions aren’t easy to come by. But based on what we’ve seen, the best path forward seems to be taking a hands-on approach to candidate onboarding from both the recruiting and education sides.
Effective recruiting and healthy talent pipelines will always be necessary for keeping companies stocked with talent—but companies can’t wait for those needle-in-a-haystack candidates to appear. Moving forward, companies will need to embrace a larger view of recruiting that involves training new hires in the specific on-the-job skills they’ll need to succeed. Perfect candidates may be out there, but most companies can’t afford to wait—and instead, should prioritize boosting the capabilities of those they already have.