For finding desired skills within the global talent pool, employers today are discovering the water is fairly shallow.
According to Aon’s global 2015 Global Risk Management Survey, the inability to attract and retain talent ranked fifth overall, but finished in second in North America and the Asia-Pacific region.
Usha Mirchandani, partner, Talent Analytics at Aon Hewitt, says job seekers lack required skills, creating a growing challenge worldwide that affects industries from construction to finance. In addition, potential employees who do have the desired capabilities and experience foster stiff competition for their ability, putting added pressure on wages and benefits for employers.
Simultaneously, young people around the world – most notably in Europe – have been finding it harder to get onto the career ladder. A recent UN study found that youth unemployment worldwide has stabilized at around 13% – well above pre-crisis levels. But this doesn’t give the full picture, Mirchandani explains, because almost 43% of the global youth labor force is either unemployed or working, yet still living in poverty.
Those dual challenges are prompting new approaches to workforce planning that may help tackle both problems, Mirchandani says.
The skills shortage
The inability to match those seeking jobs with available vacancies is in large part because job seekers’ skills don’t match employers’ needs. As new technologies emerge and impact multiple sectors, employers are increasingly seeking people with skills and experience in digital as well as data and analytics.
“The nature of work has been radically changing, and the tools for the work have been radically changing too,” Mirchandani says.
Increasingly, businesses are in of need people with skills, and more frequently combinations of skills that have not previously been aligned, like analysts with coding abilities, or medics who understand statistics. “They are looking for super-specialized skillsets. They are not looking for traditional people,” Mirchandani explains.
She cites banking and financial services as prime examples of sectors that have seen an increasing demand for people with more than one set of skills and experience. Organizations are increasingly in need of people who aren’t just experts in their respective fields, but who also understand technology and data analytics.
Millennials and Generation Z: Challenges, opportunities
Today’s graduates continue to move away from Science, Technology, Engineering and Mathematics (STEM) fields that are most in demand by employers. As a result, competition for those with the in-demand skillsets is booming, while those without the necessary training are finding it harder than ever to find jobs.
Compounding the challenge for young jobseekers is the rise of a more mobile and global workforce. Now that an increasing number of skilled jobs can be done remotely, and emerging markets are increasingly focusing their education systems on exactly the STEM skillsets that are in demand, competition for work is becoming increasingly tougher. There is hope, however.
“Today’s early career individuals are entering the workforce with these emerging skillsets,” Mirchandani says. She explains that Millennial and Generation Z jobseekers are digital natives, with a built-in knowledge of skills that are increasingly in demand from employers. As such, these groups have the potential to educate an aging workforce that may still struggle with digital technologies.
The need for these skills is unlikely to go away. To keep up with new technologies and approaches requires continual learning and adjustment, which makes ensuring that employees of the future have the necessary ability to adapt increasingly important.
New approaches to building the talent pool
Mirchandani says that when it comes to workplace skills, it can take some time for supply to adjust to demand. Education and training can take years, and the rise in demand for digital and analytical skills in recent years has been so rapid that even today’s digital native graduates have found themselves leaving education without the skills employers are looking for.
That means employers need to rethink their talent acquisition strategies.
Many of the world’s largest companies and technology firms are starting to look beyond the next hire. “It’s not a passive ‘We’ll figure it out when we get to it,’ as we may have experienced with the current skills shortage,” she says. “Instead, it’s ‘We know there’s going to be a skills shortage – what can we do differently to address it?’”
This can mean looking as much as a decade ahead, using sophisticated analytics to project both future needs and future availability of skills across multiple locations. If certain markets are more likely to see an availability of skills, companies are more open to having this data influence and guide their location plans to better ensure their access to these increasingly in-demand resources.
Some firms are also actively looking to adapt and evolve their existing knowledge by setting up programs to share expertise between generations.
Another approach – and one that is likely to become more common – is to get more actively involved in encouraging the students of today to develop the skills that organizations will need in the future.
This goes far beyond on-the-job training or apprenticeships – although these are also likely to be increasingly popular as well, Mirchandani says.
“Employers looking for sophisticated skillsets are starting to foster skills and relationships with potential future employees among high school-age students through contests and scholarships,” Mirchandani notes. “If you’re not already thinking five to ten years ahead for your talent needs, you need to start now.”