What is a tightening labor market and how can businesses remain competitive?
“Essentially it is simple economics – supply versus demand,” says AJ Viale, Resource Manager for staffing firm Kavaliro. “With unemployment claims falling, the pool of available talent is also shrinking. Employers are finding it increasingly difficult to find people for their available jobs. This can create operational challenges for employers who are looking to expand and grow.”
What is happening that leads to the belief there is a tightening labor market?
“When talking to job seekers, it seems that they are entertaining multiple opportunities and employers have to compete for the talent,” says Viale.
Smaller businesses might not be able to offer as large of a compensation package, therefore intangibles such as flexible work schedules and remote work options have to be offered to remain competent, Viale points out, it’s also important for employers to stay relevant in the communities they serve by way of volunteer work, charities and social/community responsibility.
“This shows potential employees that you are committed to more than just turning a profit and it’s something they might be able to get involved in aside from the day-to-day aspect of the job,” says Viale. “Anything that can differentiate your business from another can make a big impact in a job seekers decision.”
For employers the ability to attract talent is the difference between achieving their business goals and falling short of their company vision.
“As we move towards an increasingly candidate-centric market, businesses of all sizes are being forced to find more innovative ways of sourcing the skills they need,” says Kurt Rakos, founder and Partner at SkyWater Search Partners, a short list search firm which is dedicated to the placement of sales, marketing, IT, accounting, finance and HR personnel.
Rakos offer these tips to meet the challenges of a tightening labor market:
Be prepared for Millennials: By 2025, 75 percent of the global workforce will consist of Millennials who think nothing of changing jobs frequently if their current employer fails to meet their aspirations. Traditional hiring methods won’t work when it comes to attracting Millennials forcing HR to adapt their recruitment processes to source the talent they need.
Get mobile: Today’s talent is on the move. “Without a mobile optimized website, you risk losing qualified candidates before they reach your job post,” says Rakos. Interested candidates should be able to apply easily via a mobile device by uploading their LinkedIn profile, resume or simply by registering their interest. Lengthy applications will also result in qualified candidates abandoning your job in favor of a ‘one click apply’ mobile option offered by your competitor.
Get onto social media: Social media is key to creating a positive brand image and plays a vital role in nurturing your talent pool. Begin with sites like LinkedIn, Twitter and Facebook and stay engaged with prospective job seekers. Target your messages directly at the candidates you want to attract. Be consistent and respond promptly to all enquiries.
It’s about more than pay: While an attractive compensation package is essential to recruit the talent you need, for Millennials in particular it’s not just about hard cash. PwC’s millennial survey revealed that career and development is a priority for young professionals exploring their next career move. Add to that team building, effective communication and flexible working.
Candidate experience: A negative candidate experience (a tedious hiring process, poorly structured interviews, delays in feedback) will result in talent quitting your pipeline and reflects poorly on your company culture. Unhappy job applicants will take to social media to express their dissatisfaction with your brand. “It isn’t simply a matter of responding more quickly to enquiries,” says Rakos. “The candidate experience begins with their first encounter with your brand on social media or via your job post and ends with onboarding.”
Authenticity: An authentic employer brand is perhaps the most important yet most under-rated element of your hiring process but without it your efforts will fail. Think Google – with nearly two million job applicants per year, it’s reportedly easier to get into Harvard than secure a job offer with Google.
Employee referrals: Referred candidates generally make better hires and are more likely to stay with you and who knows your culture better than your existing people? “For an effective referral program, be specific on the type of skills you need, incentivize your program to encourage qualified referrals and fast track referred candidates to ensure a positive candidate experience,” says Rakos.
Look at your existing people: Don’t become so focused on hiring externally that you face an internal talent exodus. Consider the strengths of your best people and improve your employee retention levels by offering learning and development programs, consistent communication and transparent leadership.
“In a tightening labor market, the key is to nurture and retain the people you have before automatically looking outside,” says Rakos.