The Critical Talent Shortage is REAL and it’s reaching a 15-year high. How will you prepare for the historically strong job growth in the coming months?
What you need to know about the Critical Hiring Talent Shortage in 2021
According to the latest Conference Board Employment Trends Index (ETI), the Hiring demand is heating up like a Texas summer! Expect rapid growth in the next few months. Think you are all staffed up? Prepare for your competition to try to lure your talent away with shiny pay increases and hiring incentives. If you sense your business is at risk of losing top talent, you need to move fast to ramp up your employee engagement and retention strategies.
Much like our heat index, in May 2021, the ETI index reached 107.35. That’s almost 40% from this time last year and follows three months of the fastest growth in the history of the index.“This marked acceleration suggests historically strong job growth in the coming months,” Gad Levanon, head of The Conference Board Labor Markets Institute, said in a recent press release.
As unemployment edges down to 5.8% you will be forced to get crafty to be staffed up. Keep in mind, many in-demand roles have even lower unemployment rates. Examples include Administrative/Operational roles (3.1%), Accountants (2.6%), and IT Technical roles (0.6%).
There are 8 key components of the ETI composite index that are alarming to Economists right now:
- Initial unemployment claims
- Percentage of respondents who say they find “jobs hard to get”
- Industrial production demands
- Percentage of firms with positions not able to fill right now
- Job openings
- Real Manufacturing and trade sales
- Number of temporary employees
- The ratio of involuntarily part-time to all part-time workers
Levanon also noted that the labor shortages have already spurred “wage faster-than-normal wage growth”. Therefore, if this trend continues, it “could significantly impact inflation and monetary policy.” The shortages will likely ease toward the end of this year.
U.S. employers expanded payrolls by 559,000 positions last month, according to the Bureau of Labor Statistics (BLS). This nearly doubles last month’s gains but still falls just short of most economists’ estimation of about 674,000 added jobs.
Other BLS data shows millions of jobs sitting open already!
In May, the BLS released its latest Job Openings and Labor Turnover Summary (JOLTS) report, showing that there were 8.1 million job openings in the U.S. on the last business day of March. This figure marked a high for the JOLTS series, which the BLS launched in December 2000. Data is also proving that many Americans are making MORE on unemployment than working.
How are you going to prepare for this wave of hiring demands?
The future for work partnered with the impact of COVID-19 has brought about a demand for digitization and technical skills. It is predicted that employers need to reimagine a future of work that works for organizations and individuals alike – prioritizing skills, flexibility, and well-being.
Here are 10 actions you can take NOW to prepare your organization.
1. Pre-Attract your Talent.
Drive candidates to your organization before you have the hiring need. Ever seen a surfer just sit in the ocean and watch the shoreline to catch a wave? Well, not a good Surfer anyway! You need to paddle straight to the wave of talent if you want to catch the ride. Your recruiting strategy and talent marketing content must encompass your job postings, social media, cultural reputation, and networking. Build your own curated pool of talented candidates with prospects you have already engaged with in the past. With this pool, you can now quickly re-engage for a faster hiring process. Is your employment reputation a turn-off to candidates? Read our article to get fresh ideas for improvement.
2. Create Partnerships.
Be Proactive and not reactive. Get relationships and agreements in place with Staffing agencies/ Recruiting firms to prepare for an influx in labor demands. Have them proactively recruit for you. It is important to know the expertise area of your agency partners. They are not a one-size-fits-all hiring needs. Make sure to check out their google ratings and how they treat their candidates. You will be shocked to see that some of the largest staffing agencies (the household names) have 3-star ratings. If you are doing all of your recruiting in-house, this valuable partnership can provide you a safety net to ensure you can meet hiring demands.
3. College Mentorship programs.
Engagement with local college organizations, career services departments, and offering education programs is a great component to your future recruiting process. Your company can offer guidance and deepen the positive employment brand. And it’s a win-win: Students learn from your experienced employees, and, in return, they offer fresh energy and viewpoint for company leaders.
4. Referral Programs.
Reward your employees to refer great people from their network for future hiring needs. Many companies have an employee referral program in place but fail to advertise it. Sound familiar? You just need to get creative and consistent in your reminders. Here are a few ideas: Remind them in company emails, notices, posters, meetings, and special events. Set up contests to make it even more fun! Plus, internal marketing works wonders for employee engagement, retention, and employment branding.
Employees have positively responded to work-from-home options. Many extroverts are thrilled to be back in the office but still loved the option to also work from home when family demands come calling. Do you expect staff to be available around the clock? A healthy work-life balance is essential to job satisfaction. People need to know their managers understand they have lives outside of work. In addition, flexible schedules, low-traffic commutes, and relaxed attire have increased morale.
6. Retention Strategies.
Your competitors and their Recruiting partners will seek to poach your talent. So, now’s the time to confirm your business is doing the right things to drive job satisfaction and, ultimately, employee retention and job satisfaction. Your competition will be seeking to lure your talent away with pay increases and hiring incentives. Make them so happy in their jobs that they don’t look up other jobs or post their resumes.
7. Expand your reach.
Programs such as the “second chance act” can help you tap into a talent pool that is often overlooked. Here are 4 best practices for implementing a Second chance program. Veteran and Military hiring programs are often free and can be a great resource! Consider hiring people with wonderful abilities, that also have a disability. Incredible programs are available to tap into this incredible talent pool. Commit to inclusion and identify ways in which your company can create opportunities for job seekers with autism, intellectual and/or developmental differences.
8. Employee compensation.
Companies need to offer competitive compensation. Therefore, you need to evaluate and adjust salaries regularly. Even if your business isn’t able to increase pay right now, consider hiring bonuses and increased paid time off. Expect that the Supply and demand changes in the next few months will be impacting the market rates. Recruiters are always researching compensation ranges and can be a great source of information for Executives.
9. Increase Diversity.
Companies with increasingly specific skills need to find new ways to close the inequity gaps that exist at the intersection of race, gender, education, and economic status. Find candidates that might not have been able to attend colleges or trade schools but are wanting to be trained. Explore ways to pre-skill, upskill and reskill for in-demand roles to create a better workplace where everyone can have a more equitable share of prosperity. Check out the article Hire for attitude and train for skills.
10. Condense the Hiring Process.
Ever notice how many applicants start but don’t finish the application process? They see your well-worded job posting and have expressed an interest. But unfortunately, with the redundant questions and cumbersome forms, they lose interest mid-way. You made them work too hard! Learn ways to have a SMART hiring process. Now is the time to discover 1) shortened trends in application processes (that would support getting rid of the 2 or 3 step hiring process), 2) why reducing applicant labor is important, and/or 3) anything about your application processes that is a turn-off. Hiring steps might need to be more backloaded rather than frontloaded to lock in engagement.
Let’s face it, hiring is tough. It’s always exciting to grow. We would love to be your partner in growth success. Let us know what hiring needs you anticipate and how we can help you get ready. Text us at 832.802.0015 or email us at firstname.lastname@example.org