In 1997, McKinsey already published a pioneering study about the war for talent and how it contributes to the overall corporate performance of an organisation. Although it was assumed that this war was going to end after the cooldown of the economy in 2001, the opposite is true. Analysts even predict that it will persist for the next two decades. Looking at the challenges that the HR department is facing, we can see that finding the right candidates is the main struggle nowadays: the number of vacancies are increasing, there is a so-called mismatch between potential candidates and the company and on top there is shortage of great talent.
On one hand, the answer lies in the fact that companies are still searching for exceptional candidates, and are not looking beyond these traditional profiles. On the other hand, education of current employees and focussing more on the creation of diversity will already answer most of the issues. The aging society has its impact on different sectors, and so it will have on the HR department. More and more baby-boomers are going to retire, while fewer youngsters will join the labour market.
However, when analysing concrete numbers, we see that there is still a part of the working-age population that is not employed at the moment. More precisely, the “labour force participation rate” was about 58,5% on average in Europe in 2016. And percentages are even higher for people above the age of 55, while most of these people are still not thinking about retiring. These numbers indicate that there is still a great potential in the market, we just have to look beyond resumes or hard skills.
Creating a strong company culture is already one important aspect to overcome this problem: look for candidates who match the culture of your company instead of solely taking into consideration the number of years of experience or their level of education. In fact, hiring people who are a great match with your values will bear fruits in the long-term: the overall working atmosphere will improve which in turn will cause turnover rates to decrease.
This is only one part of the solution though, the lack of diversity in teams is another important item. Recruiters are way too often looking for people that look like them, instead of creating diversity. A great example is the optimal mix between young and older employees. An organization which encourage these types of diversities, allows every team member to learn from each other and by doing this, bring innovation to the processes. As mentioned before, a lot of 50-plussers are still not thinking about retiring and are willing to work 15 more years if they have the chance.
One last observation is that in general, companies often focus too much on their short-term needs, which in the end will define their strategy in the long term. Everyone wants the best candidates but the minority is willing to pay the equivalent salaries, which of course won’t work.
You can handle this situation differently. By looking for less experienced people, but people with great potential for example. Candidates without experience are still eager to learn and develop themselves and are not biased yet due to previous experiences. They’ll bring a new light into your company and it’ll give you the possibility to let them contribute to the creation of your organizational culture.
Overall, we cannot dismiss the fact that a shortage in talent is coming, and that HR must prepare for the future. But there is only one way forward: consider the changes as an opportunity, not as a thread, and modify the way you are hiring.
Thanks for reading and see you next time!
Your team here at skeeled