Jobs have started flowing back into the U.S economy. So have the new challenges associated with hiring, particularly as they pertain to matching the right talent to the right jobs. Many of the jobs emerging from the pandemic may not have the same characteristics. The pandemic upended supply and demand dynamics for many people, their jobs, and their career path. Many workers see lower demand for their jobs and are faced with not much choice but to develop new skills to be competitive in the current job market.
Skills Gap and Mismatch
Employers are increasingly facing the challenge of matching their job openings to the existing labor force. This, according to the economist Sir Christopher Pissarides, is a function of matching and filling the existing skills gap, which he calls a ‘mismatch’.
Addressing the dilemma of ‘mismatch’ is extremely time consuming and thus costly for employers and HR recruiters alike. The average time to bridge an existing skills gap and fill a position, even before COVID-19, was projected to take up to 12 weeks and in dollars, equated to up to $4,000 USD.
Employers, in their efforts to fill the increasing number of job openings, demand workers with skills specific to a job. Shortage of talent means that many job seekers are left with no option but to develop new skills. According to McKinsey & Co, between 20 and 25 percent of the workforces in advanced economies could work from home between three and five days a week. This change in remote work dynamics portends parallel changes in consumption and transportation patterns with a continuous impact on labor markets.
The mismatch is only one part of the jobs' return within the context of economic recovery. Another part of this dynamics is the search for and interest in good quality jobs that pay well and offer greater stability, improved pay, quality benefits, training and a career path. It is no secret to anyone that few jobs provide enough income to cover rent, health care, education and other essential items. This makes it further difficult for employers to fill available job openings within a desired timeframe. As workers demand better quality jobs and employers seek to fill jobs based on the currency of skills, the significance of training comes into play.
According to the McKinsey Global Institute, employers are shifting their focus to training their workforce in droves with 69 percent of them doing more skill building now than they did before the pandemic. The opportunity to upskill an existing employee base, thereby negating the need for an outside hire is often the more cost-effective avenue while improving employee productivity and morale.
A Bottom-Up Approach
The good and stable post-pandemic jobs that many job seekers are looking for should be localized; that is, specifically meet the needs of local employers and their business challenges. Training programs offered by local governments, community colleges, and non-profit groups have emerged as a key contributor to resolving the acute talent shortages at state and local levels. Many of these training programs include job counseling, which aim to solve a challenge faced by many employers known as the last-mile. The last-mile challenge is about soft skills like teamwork, communication and willingness to learn new things. It underlines the significance of social capital in the workplace and how it impacts one’s success at work. The training and counseling programs focused on the last-mile have been particularly helpful in lifting low-income workers into better paying and more stable jobs, facilitating upward economic mobility.
To overcome the last-mile challenge, tech giants such as Microsoft and Google have stepped in by offering various funding and scholarships to job seekers. There are also billions of dollars to be poured into training programs at federal level. President Biden’s $2 trillion infrastructure plan includes $100 billion to fund workforce training programs that include 2 million apprenticeship slots as well as workforce development for women and minorities.
Strategic Human Resource Management
The emerging landscape in the job market is one of a hybrid model in which remote work is an indispensable part of talent management and HR operations facing radically shifting employee expectations. This will include a large number of employers compelled to have a scattered workforce that periodically comes to the office with their benefits restructured around the needs of a remote workforce. The pendulum is clearly tilting toward employees with greater leverage than ever before.
All sectors of the economy are being impacted by the post-pandemic shifts in labor markets. The coming influx of investment in infrastructure projects, coupled with the dizzying pace of digitization during the pandemic, are clear testaments to the impact of the post-Covid recovery on both knowledge and blue-collar workers. While the blue-collar workforce seeks more secure jobs, knowledge workers want a flexible schedule and flexibility in work location. This is the new reality of labor markets facing HR departments. It calls for a new and strategic approach to talent acquisition and talent management.
What Happens to Recruiter Experience?
The new hiring landscape means a set of new experiences for HR and talent acquisition teams. They need to take into consideration the shift in demands and expectations of the labor market by both knowledge and blue-collar workers. Some of these include consideration of flexibility as a form of benefit, more digitization of operations, facilitating childcare, and meaningful adoption and implementation of diversity, equity, and inclusion (DEI).
It’s always important to remember that new AI solutions, like skill inference and skill matching, are only some of the many pieces needed to solve the talent puzzle. To overcome their challenges and come up ahead in the talent game, companies need holistic strategies that go beyond what happens when a candidate applies.
Recruitment marketing, employer branding, talent pipelines, nurturing long-term relationships are among many other areas, will continue to grow in importance. Finding ways of combining all these different areas into a unified strategy that is effective at identifying, attracting and hiring the talent you need will ultimately be the key to success.