Skills Shortages Today and Tomorrow
Nearly two-fifths of companies responding to a recent HRI survey say they are experiencing skills shortages, and many have developed specific strategies for coping with the problem.
The chairman of the U.S. Federal Reserve, Alan Greenspan, stated last July that the U.S. has “not been able to keep up the average skill level in our workforce to match the required increases of increasing technology.” The HRI survey, which represents a quick snapshot of businesses, indicates that this is true for some organizations but by no means all.
Out of 51 responses to HRI’s short e-mail survey, 39% said yes when asked if they were experiencing skills shortages in their organization, while 53% said they were not. Another 8% said they didn’t know or had no opinion.
Among those saying they were experiencing shortages, many did indeed point to jobs requiring technical expertise. One participant alluded to “some technology areas like Linux,” while others reported a need for certain types of engineers and technologists. There seems to be a particular shortage of qualified healthcare employees such as those working in nursing, radiology, pharmacy, and the like.
Much less common were complaints about a shortage of lower-level employees with basic skills, although one respondent did note that “hourly workers in some markets lack the most basic business skills – everything from basic grammar and writing to basic computer use.”
Companies have developed various strategies for coping with skills shortages. Some focus on employee referrals and/or incentives. Two participants noted, for example, that employees who make referrals can earn up to $3,000 per hire at their organizations. Another company reports giving both its recruiting agency and its new hire a bonus when an area of critical shortage is filled.
Some respondents customize their benefits programs to accommodate the needs of certain types of skilled workers. One participant explains, for example, “Many of the highly skilled and highly experienced associates we are bringing in are here for 3 to 5 years. Our benefits reflect these recruitment strategies vesting in 3 years to retirement plan and immediate eligibility. Retiree medical coverage [is offered] after 5 years of working at the [organization] and age 55. We have a tuition reimbursement program whether job related or not for the associates working on building their knowledge and skills.”
Some companies concentrate on developing the skill levels of current or potential workers. One respondent concerned with the nursing shortage writes, “[W]e developed a training program in nursing to be conducted by community college on our worksite. We obtained approval from the state for college waiver to train more nurses than had been set aside.” Another company is working to develop “‘in-house’ development capability strategies to offset skill needs.”
Retention and the career development plans may also be used to lure and keep hard-to-find workers. “The company is currently considering a more formalized succession planning process for key staff in the technical sales areas,” reports a respondent. “They would include a career path outline, well defined training and critical skills identification and support, and additional retention incentives. The goal is to retain current individuals and offer attractive features to potential new hires.”
Another strategy is looking abroad for skilled labor. “Like many other ‘high tech’ software and services companies, we are and will be increasing our ‘off shoring’ of white collar jobs in product development, consulting services, and support centers,” writes a participant. “This is being driven more by cost than skill shortage. However, as the global market heats up, most industries will be faced with finding solutions that deliver low cost high skills in order to just stay competitive. Unfortunately, there are many risks with ‘off shoring’ that loom on the not too distant horizon.”
No one is certain about the extent of future shortages. One respondent noted that the current skills market is already “the most competitive we’ve seen since pre-dotcom bubble burst.” Some futurists expect this trend to intensify – driven by the retirement of baby boomers and other demographic factors – until it makes the “war for talent” of the 1990s look like a mere skirmish.
Others are more skeptical in light of the recent “jobless recovery” and the ability of companies to offshore more work. One thing is certain: even though the current U.S. labor market is not yet particularly tight, a good many companies say they’re already experiencing skills shortages. Those that develop effective strategies for coping with such shortages today are likely to have a leg up on the competition if skills become even scarcer in the near future.
The chairman of the U.S. Federal Reserve, Alan Greenspan, stated last July that the U.S. has “not been able to keep up the average skill level in our workforce to match the required increases of increasing technology.” The HRI survey, which represents a quick snapshot of businesses, indicates that this is true for some organizations but by no means all.
Out of 51 responses to HRI’s short e-mail survey, 39% said yes when asked if they were experiencing skills shortages in their organization, while 53% said they were not. Another 8% said they didn’t know or had no opinion.
Among those saying they were experiencing shortages, many did indeed point to jobs requiring technical expertise. One participant alluded to “some technology areas like Linux,” while others reported a need for certain types of engineers and technologists. There seems to be a particular shortage of qualified healthcare employees such as those working in nursing, radiology, pharmacy, and the like.
Much less common were complaints about a shortage of lower-level employees with basic skills, although one respondent did note that “hourly workers in some markets lack the most basic business skills – everything from basic grammar and writing to basic computer use.”
Companies have developed various strategies for coping with skills shortages. Some focus on employee referrals and/or incentives. Two participants noted, for example, that employees who make referrals can earn up to $3,000 per hire at their organizations. Another company reports giving both its recruiting agency and its new hire a bonus when an area of critical shortage is filled.
Some respondents customize their benefits programs to accommodate the needs of certain types of skilled workers. One participant explains, for example, “Many of the highly skilled and highly experienced associates we are bringing in are here for 3 to 5 years. Our benefits reflect these recruitment strategies vesting in 3 years to retirement plan and immediate eligibility. Retiree medical coverage [is offered] after 5 years of working at the [organization] and age 55. We have a tuition reimbursement program whether job related or not for the associates working on building their knowledge and skills.”
Some companies concentrate on developing the skill levels of current or potential workers. One respondent concerned with the nursing shortage writes, “[W]e developed a training program in nursing to be conducted by community college on our worksite. We obtained approval from the state for college waiver to train more nurses than had been set aside.” Another company is working to develop “‘in-house’ development capability strategies to offset skill needs.”
Retention and the career development plans may also be used to lure and keep hard-to-find workers. “The company is currently considering a more formalized succession planning process for key staff in the technical sales areas,” reports a respondent. “They would include a career path outline, well defined training and critical skills identification and support, and additional retention incentives. The goal is to retain current individuals and offer attractive features to potential new hires.”
Another strategy is looking abroad for skilled labor. “Like many other ‘high tech’ software and services companies, we are and will be increasing our ‘off shoring’ of white collar jobs in product development, consulting services, and support centers,” writes a participant. “This is being driven more by cost than skill shortage. However, as the global market heats up, most industries will be faced with finding solutions that deliver low cost high skills in order to just stay competitive. Unfortunately, there are many risks with ‘off shoring’ that loom on the not too distant horizon.”
No one is certain about the extent of future shortages. One respondent noted that the current skills market is already “the most competitive we’ve seen since pre-dotcom bubble burst.” Some futurists expect this trend to intensify – driven by the retirement of baby boomers and other demographic factors – until it makes the “war for talent” of the 1990s look like a mere skirmish.
Others are more skeptical in light of the recent “jobless recovery” and the ability of companies to offshore more work. One thing is certain: even though the current U.S. labor market is not yet particularly tight, a good many companies say they’re already experiencing skills shortages. Those that develop effective strategies for coping with such shortages today are likely to have a leg up on the competition if skills become even scarcer in the near future.