Hiring in a Tight Labor Market: 4 Tips for Attracting and Retaining Talent
This article was updated on July 25, 2018.
HR leaders in search of talent know that hiring in a tight labor market is anything but easy, and recruitment challenges become more pronounced for positions requiring higher levels of skill. As the Harvard Business Review reports, the "skills gap" is real and growing, especially as job markets continue to constrict. The impact of this talent gap on organizations is clear, decreasing their capacity to serve customers, develop innovations and maintain levels of productivity.
So how should HR leaders respond to a climate in which talent is increasingly scarce and expensive?
Here are four suggestions:
1. Retain the Talent You Already Have
Start by identifying the key talent you already have and commit to keeping them in place. As job markets tighten, you can expect that your talent will be aggressively pursued by your industry competitors. To combat this, you should have a strong talent management system already in place. If you don't have the ability to engage your existing talent and give them a solid future within your organization, then there's no point in recruiting outside talent who'll simply become flight risks. The flip side of employee turnover is employee engagement, so engage your talent now.
2. Develop Your Bench of Talent
Evaluate the size of the gap between the talent you already have and the talent you'll need in the future. By anticipating your talent needs, you can begin to close that gap by developing your organization's talent bench. Employees promoted internally have a significantly lower failure rate than external hires. Expanding your training and development efforts both retains and develops your talent, so it's a double win for today and tomorrow.
IBM, for example, makes strong internal investments in tracking and developing its future leaders. The firm is among the top U.S. companies in developing leaders, and identifies those with early promise under its Basic Blue for IBM Leader program, "where leadership competencies are explored and guidance for career paths is given," according to Chief Executive magazine.
3. Enhance the Perception of Your Organization
According to Willis Towers Watson, a global advisory leader, you should evaluate your employer value proposition (EVP), or what an employer expects from its employees and what it provides in return, and try to see your organization through the eyes of potential job candidates. This type of intelligence can help guide future improvements to position your organization as a destination for talent.
Locating quality candidates in an increasingly small labor market means giving talented candidates more flexibility in their choice of benefits and working conditions. The stronger your EVP/brand perception among top-tier candidates, the more likely they are to join you, even in the tightest of job markets. So publicize what makes working for your organization special and unique.
You should also segment your EVP communication by generation for maximum efficacy. According to an ADP Research Institute report, "[t]he reason for taking a generational approach to employment branding is actually very clear. For the first time in United States history there are four generations in the workplace. Because each generation brings its own set of characteristics, experiences, and expectations to the job and the job search, a one-size-fits-all communications approach will not work well."
4. Increase Compensation
Although budgetary restraints might limit the reach of this option, becoming more competitive in terms of compensation will always be a viable option to bolster your chances with certain candidates. The ability to offer higher starting wages can give you a strong, short-term advantage while hiring in a tight labor market, affording you time to develop the more sustainable, long-term initiatives mentioned previously.
Finding talent in a tight job market is among the toughest challenges an HR leader will face. But if you carefully plan initiatives that will improve your appeal both internally and externally, you should be able to continue to win the war for talent for years to come.
