As we fast progress towards a ‘digital first’ nation, there’s no denying that technical skills are and will be the centre of our professional and personal lives. However, wherever you look, and whoever you talk to, we’re all being told the same thing – we’re facing a major talent shortage. This couldn’t be clearer than the government figure which revealed the skills gap is costing the UK economy a staggering £63 billion a year.
What this stat also signals is the competition for a candidate with the relevant skills for the modern workplace is often rife – with talent acquisition professionals under enormous pressure to not only hire people, but to get them in as soon as possible.
In the latest report from our Talent Forecast series, we found talent acquisition professionals across Europe, Middle East and Africa (EMEA) name competition for talent (29%) and quality of hire (26%) as the two most significant issues to keep them up at night.
When taking into account both the rapidly changing business strategies and the rise in of the digital age, jobs that didn’t exist a few years ago are being created. What this means is there are increasing demands for new skill sets in virtually every job and profession. As a result, hiring and retaining workers who are agile and who can adapt to the fast pace of change is and will be critical for staying ahead of the competition curve.
Adopting a long-term mind-set
Historically, filling a seat as quickly and as efficiently as possible has been a vital approach within an organisation. However, with purse strings tightening nationwide, there has been a growing appreciation for the economic impact of recruiting the wrong hire.
It was Korn Ferry Hay Group’s research which highlighted the cost of replacing a manager within 6-12 months of their hire costs a business almost two and a half times the person’s annual salary. And for someone in a senior executive position, this cost of replacing them could amount to £750000.
It’s clear that talent acquisition needs to be less about cost per hire, and more about focusing on finding, hiring and retaining workers who are not only effective in their roles, but have the aptitude to be the leaders of tomorrow.
In the same way an organisation wouldn’t rush a business decision about their IT infrastructure or a move into a new vertical, the people hired shouldn’t be taken any more lightly. After all, employees are the backbone to any company and put simply – retention is more economically viable than acquisition.
With this in mind, it was promising to see talent acquisition professionals across EMEA move towards a longer-term perspective on hiring successful candidates. With organisations continuing to operate in an increasingly competitive environment, with significant talent shortages, looking further down the line should be the rule, not the exception.
When looking at the core reasons for seeing talent shortages in the EMEA region, talent acquisition professionals cited a lack of candidates who can move up the leadership pipeline (27%) as the top reason for today’s talent shortages.
These findings highlight an important insight into how talent acquisition professionals are recognising the need to move away from the mind-set of just filling an empty seat to focusing on the longer-term benefits.
As focus shifts away from more transactional and short-term metrics, the concern for not producing enough leaders fast enough to executive business strategies can only be a good thing.
Addressing the leadership pipeline shortage
In order to overcome the looming shortage of leaders, organisations should be looking at how they can do a more effective job of leadership assessments, succession planning and development for specific positions.
Organisations need to kick this off with a more strategic view of talent, whilst in tandem, appreciating its considerable value to a business.
With another of our research studies revealing almost two in five (38%) of respondents in EMEA believe their talent function to be closely aligned to their organisation’s wider objectives, businesses should think about how they can develop an in-depth understanding of the business strategy and how it impacts talent needs throughout.
What’s promising to see is how organisations have begun implementing new reward structures to incentivise talent acquisition professionals in a bid to foster and encourage this approach. An example of this is where recruiters receive bonuses for the long-term success of the hires.
To caveat however, this approach has proven far easier with more target-based roles like sales than with a less tangible role, such as ones within marketing or nursing. Whilst this is not a common practice across all companies, it’s very likely to become more popular as organisation seeks to reward the recruitment of high performers.
It’s clear there will always be challenges in acquiring and retaining talent. Despite this, it is encouraging to see that the industry is already making great strides in the right direction by taking a more long-term, strategic view to hiring its future leaders.