What keeps HR executives up at night? People. Finding qualified people, motivating those people and keeping them on staff. Considering that companies that do not do these three things well are unlikely to perform well, CFOs are probably tossing and turning about these issues too.
A survey of 330 HR leaders conducted by Deloitte and the International Society of Certified Employee Benefit Specialists found that one-quarter of these HR leaders consider the shortage, motivation and retention of qualified talent to be the most significant challenge facing their organizations over the next three years. This is a significant increase over the 16% who noted this as a key issue last year.
To see how such a shortage is playing out in one industry, just take a look at the challenges facing manufacturing. Last year, Deloitte and The Manufacturing Institute teamed up to publish a report, Boiling Point? The Skills Gap in U.S. Manufacturing. The report not only details the challenges this talent shortage creates for companies but it also shows that the tried-and-true approaches to finding and developing good people may not be enough anymore.
The most important finding is that manufacturers are finding that the hardest jobs to fill are those that have the biggest impact on performance -- that is, skilled production jobs that include machinists, operators, craft workers and others. Without those people, these companies have difficulty moving forward with plans to expand or improve operations. Sound familiar?
Moreover, even though we have been operating in an economic environment marked by consistently high levels of unemployment, this circumstance has not made the job of finding the right people any easier for these companies. As a result, the report found that these companies have a median of 5% of their jobs unfilled because they can't find the right people.
Finally, these companies expect this skills gap and the dearth of strong talent to continue for the foreseeable future.
So what are companies to do? For one thing, companies need to make sure that their strategies for training and developing existing talent are able to rise to these challenges. With strong approaches to evaluating the strengths and weaknesses of the current roster of employees, companies are better able to spot promise among current performers. It is easy to find the low-hanging fruit of employees whose skills and abilities are readily apparent. The much more difficult task is identifying those employees who could thrive with the right type of training and coaching.
Formalizing the process of evaluating employees and identifying gaps in needed skills is a good first step. Many companies still rely on informal feedback mechanisms that may not be robust and consistent enough to meet current needs. In addition, companies can take steps to leverage the knowledge and experience of older workers approaching retirement age by involving these individuals in training and evaluating their younger colleagues and having some sort of formalized knowledge transfer program.
The same can be said for recruiting. The same tried-and-true approaches to finding new talent among the larger pool of available labor may no longer be enough. A company that has relied on a specific means of bringing in new employees, such as employee referrals or word of mouth, will need to cast a wide net. For example, just 20% of the manufacturers surveyed in the report leverage gender or diversity initiatives in recruitment to bridge this skills gap.