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Janine Milne

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The skills paradox flourishes

skills_gap

We are in a skills paradox.

On the one hand, headlines have screamed all year of redundancies, high unemployment, and graduates struggling to get a foot through the corporate door.
 
On the other, they have also been warning of rising skills shortages and on-going talent wars.
 
While there has and always will be a tussle over top talent, the intensity does appear to have gone up by several notches lately. As Sue Brooks, managing director of recruitment process outsourcing firm Ochre House, points out: “At the moment, people pipelines are the number one concern in Europe for any CEO.”
 
Two years ago, the primary anxiety related to customers and finding ways to keep and develop them. “But what’s gone to the top slot is people, pipelines and talent management,” she says.
 
Difficult or new markets, globalisation and changing demographics have all contributed to create a ‘new normal’. “Why it’s such a top agenda item is that businesses are trying to do two things at the moment: they are trying to cut costs and become lean and agile,” Brooks contends.
 
Organisations are being compelled to strip costs out of the business, particularly in Europe, but equally, they need to grow revenues and invest in growth. “And people are at the heart of that decision. They are the biggest cost and the biggest opportunity,” Brooks says.
 
Two skills tiers
 
But therein lies the paradox. Most organisations have two separate populations: high-flying managers, top talent and key performers that they need to attract and cling onto no matter what, and the rest who constitute a cost.
 
So employers are stripping people out at some levels and desperately scrabbling about for talent at others, with those in the latter category having skills that are at a premium because they operate in new, growth areas where there is a lot of competition for them.
 
“A lot of people are being taken out of companies in roles that have been designated as legacy,” Brooks points out. “But what they are struggling for is people in roles that drive growth. For each sector and market, there are different critical roles.”
 
Competition is particularly fierce over STEM (science, technology, engineering and science) professionals. A September study commissioned by the Royal Academy of Engineering highlighted the need for 100,000 new STEM graduates each year until 2020, just to keep pace with current employment requirements.
 
The UK, however, is only producing 90,000 STEM graduates annually – and the true shortfall is even higher as that figure includes international students. To make matters worse, a quarter of engineering graduates also choose to use their skills in alterative professions.
 
Howard Flint, managing director of recruitment outsourcing specialist Omni RMS, agrees with the two-tiered view of skills. “It’s certainly a factor and we see that there are some roles where we get far too many people applying – anything with admin. But in technical or professional, the number of applicants drops significantly,” he says.
 
But Flint is not a great believer in the concept of a skills shortage. “It’s always the case that good talent is really picky where it moves and the challenge for organisations looking for talent is to find the right way to attract them,” he explains.
 
Blinkered and prescriptive
 
While tier-one organisations will undoubtedly have talent banging on their door, it is harder for second-tier organisations to attract whom they require. As a result, they need to find ways to stand out from the crowd.
 
To do this involves working out what makes them different, articulating it clearly not just to recruiters but also to line managers and linking everything together into a coherent employer branding and marketing proposition. Attracting talent certainly takes more than just placing an advert on a jobs board.
 
But all too often, employers are simply too blinkered and prescriptive in terms of what they are looking for.
 
Flint describes one client who rejected candidates with the right technical skills because they didn’t have the right levels of managerial competence – even though it would have been perfectly feasible to put those with potential on a management training scheme.
 
A report published by Accenture in April also found that almost nine out of 10 European employers had either cut or frozen their skills and training expenditure over the previous 12 months, despite worries over skills shortages.
 
Only 18% of the 500 senior decision-makers questioned planned to increase their investment in this area over the year ahead, even though 43% anticipated at least a moderate skills shortage.
 
But Kate Russell, managing director of Russell HR Consulting, warns: “It’s short-sighted to cut training. There are always ways of doing things that can be cost-effective such as webinars so there are not hotel or travelling costs.”
 
The point is that, before casting around for skills externally, employers would do better to find out what skills they have in-house and what they are likely to require in order to achieve future growth. “A lot of talent is wasted: it’s given to the wrong place,” Flint explains. “A lot of people with good potential get stuck in roles that are wrong.”
 
A more subtle approach
 
But sometimes training is simply not an option. Ochre House’s Brooks notes that the specialist nature of the engineering roles at one client’s company resulted in workers having to spend five to 10 years in developing the necessary skills.
 
The problem was that, not only was the competition for such people piercingly keen, but the firm also realised that 90% of its in-house experts were due for retirement over the next five years. As a result, thinking strategically and making long-term plans to keep the skills pipeline intact became essential.
 
Moreover, activities such as learning and development, rewards, understanding people’s skills and everything else people-related had to be linked into the recruitment process. It was also necessary to undertake “narrowcasting” or a series of focused activities in order to identify the right individuals.
 
It was certainly not a case of simply posting a position on a jobs board and expecting the applicants to roll in as most potential candidates in this area were not actively looking for a new role. Instead the whole process required a more subtle approach.
 
Clearly, digital communication can play a massive role here. Developing relationships through social media is key to building new networks of contacts in order to complement ‘real-world’ networking at physical events. But it is also about ensuring that executives and other key performers exploit the networks that they are involved in too.
 
Increasingly, however, the hunt for talent is becoming international. In fact, according to Brooks, one third of all UK hires now come from abroad and the numbers are growing.
 
But no matter how fierce the competition for staff may be, there is no reason to settle for mediocrity. As Russell points out: “You have to recruit the best – don’t just put up with the least worst.”
 

One Response

  1. the figures don’t lie…..

     …. so whence cometh the oxymoronic idea? As a cynical observer of recruitment in the Antipodes we saw the ITCRA (IT Contract & Recruitment Association) bemoaning skills shortage to which Govt responded by relaxing 457 visas. Lo and behold, IT graduates become the least likely to get work of all tertiary educated! Watch out for any agenda to gain control of a labour market which looks to immigration as a solution.

    And engineering prospects! Macro recruitment is one of a few who publish actual numbers of jobseekers for each category. 28000 engineering candidates registered c.f. say healthcare-2000, or Accounting-1000, or Manufacturing-4000 (apologies for the rounded numbers, but they were read from a chart).

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