How can the tight labor market affect you and the quality of your candidates?
Knowledge workers are in high demand these days. Companies struggle to find skilled workers in a labor market that has the lowest unemployment rate since 2000.
We’re sorry to say things are only going to get worse. A new report says there could be a global shortage of talent of more than 85 million people. This shortage will have a high opportunity cost, as companies will have to walk away from new business because they simply won’t have the workers to fulfill the demand.
How will this intense labor shortage affect your business in the years to come and what can you do to overcome these challenges?
Effects of a Tight Labor Market
The labor shortage is not news to human resource professionals. The Society for Human Resource Management says 60% of employers struggle to fill job openings within 90-days.
Some of the hardest-hit business sectors in the next few years include the skilled worker labor pool in these industries:
- Financial and business services
- Technology, media, and telecommunications
CIO says “The talent shortage for tech workers is no longer just an inconvenience for any employers – it’s quickly becoming a significant business problem.” The article suggested that some of the effects of this tight labor market include:
- Companies may need to make their hiring practices more agile, decreasing the time between applications and hiring. If they don’t, the hottest candidates could simply lose interest.
- Companies may have to pay more to attract talent in some fiercely competitive markets. They may also have to revisit salaries of existing employees to retain top talent.
- Companies may also have to settle for less experienced talent that lacks skills and then invest in the employees that illustrate the desire to learn and grow.
- Businesses will need to reinvest in improving onsite cultural environments that engage their employees in the success of the team.
- Businesses will also need to focus on increasing the volume of perks to attract more talent as well as retaining existing employees.
The tight labor market conditions will almost certainly decrease productivity and cost businesses millions in lost opportunities. They will struggle to support their existing customers and then lack the staffing to create innovation to improve the business. As these pressures increase, companies will also feel the financial drain of having to pay higher salaries and invest more in their current labor pool.
To survive the labor drought, companies must invest in cross-training existing teams and work to retain their currently employed talent pool. Companies that fail to engage existing employees run the risk of having them poached by another company or recruiting firm.
Best Partnerships for a Tight Labor Market
The partnerships you develop now will help your company continue to push forward despite the talent shortage. Blackstone Technology Group is a firm uniquely poised to help companies attract and retain the best talent. We offer staff augmentation and IT staffing, placing creative and IT talent across the country in a variety of industry sectors. Contact us for solutions in a tight labor market.