If you are an HR leader, you are probably aware that the talent shortage is becoming acute.
Organizations of all kinds are struggling to fill vacant positions. Everyone seems to be fighting to hire the same people with the same skill set. The result is a growing concern that the talent shortage could drastically impair global economic growth.
In the last two months alone, various sources of data on the U.S. labor market have revealed alarming macro forces that are creating dramatic impacts on the talent market.
First and foremost, the shortage of skilled talent continues to grow. In fact, the U.S. Bureau of Labor Statistics reported that in May 2018 there were more job openings than unemployed people—the first time that has ever happened. That statistic is one of the clearest signs yet of the growing gap between the needs of employers and the pool of available talent.
A growing number of job openings has often been viewed as a sign of economic strength. It typically translates into more hires, which means larger payrolls, and that translates into greater economic opportunity as more people have more money to spend. Instead, hiring has slowed.
ADP and Moody’s Analytics reported in early July that the inability of companies to find qualified workers was slowing the rate of new hires. “These labor shortages will only intensify across all industries and company sizes,” according to Moody’s Chief Economist Mark Zandi.
What has increased, however, is the rate at which skilled talent is voluntarily quitting. The Wall Street Journal recently profiled workers who were quitting of their own volition to look for new career challenges and higher wages in a labor market where paychecks have been relatively flat for the last decade.
In April 2018, 3.4 million Americans quit their jobs, the highest number since 2001 and twice the number of people who were laid off. Labor economists believe that truly talented workers have been emboldened by a generally strong economy and the high demand for skilled labor to switch jobs rather than wait for a better opportunity with their current employers.
Altogether, you have a gargantuan challenge for HR leaders. The talent shortage will create intense competition among employers for employees with key skills. You could join the ranks of companies that are trying to fill their talent needs by looking for skilled workers in traditional ways.
But if your organization is truly visionary, you should be looking instead to solve your talent needs by creating internal bench strength and investing in the people you already have through career development.
Career development is key to an effective talent management strategy that can help you assess your current workforce and then develop talent to meet your future business needs.
The process begins with a wide-ranging talent review, where managers examine their current employees to discover what their people can and cannot do. This allows you to determine whether you currently have the people you need to meet future challenges, or whether you suffer from gaps in skills and competencies that will prevent your organization from achieving future business goals.
This is where career development becomes part of the conversation.
Some of these talent gaps can be addressed by introducing learning and development programs that create opportunities for individual employees to expand or pursue career goals that go beyond their current roles and duties. This is all done within the context of your organization’s future talent needs.
The alignment between organizational talent needs and an individual’s career goals can be a potent force that not only prepares your organization to meet the challenge of business transformation, but also boosts engagement, retention and productivity. In short, effective and focused career development helps ensure you have the right people in the right jobs, and that they are totally committed to the business plan.
It seems simple enough—so why are so few employers doing it? In a recently released analysis, the White House Council of Economic Advisors pointed out that per capita spending on education and skill training in the United States is still largely focused on people under 25, when they are enrolled in formal education. After that age, spending on education goes way down.
That trend clearly reveals the competitive advantage your organization will have if you develop and implement a career development strategy. Simply put, top performers are much less likely to leave their current jobs to find new positions or gain new skills and experience if they have access to those opportunities in-house.
Unfortunately, not many employers are seizing this opportunity. An LHH Talent Management Survey revealed that only 23 percent of the HR professionals surveyed think that their organizations are delivering an effective career development program. That certainly leaves room for improvement.
So where should you start to build an effective career development solution?
Start by assessing your current workforce to analyze current job skills, and then look at what skills and competencies you will need for the future. If there is a gap, then offering interesting and rewarding development opportunities for all employees can bring tremendous value.
Ultimately, effective career development means transforming many of your existing talent management strategies to help existing employees better meet the future talent needs of your company. That is a lofty goal that cannot be accomplished with a better internal job board and a few brown-bag lunch seminars. It needs to be a more holistic approach, where all your talent management initiatives are pulling in the same direction.
In the face of a growing talent shortage—and the devastating impact it could have on productivity and revenue—it will be fascinating to see how many organizations confront the challenge and develop an effective career development strategy, and how many just continue to whistle by the graveyard as key positions go unfilled. It is a choice between lagging behind the curve or getting out in front and leading the war for talent.
Which approach would you rather take?