HR options to combat talent shortages, degree inflation, and skills gaps

Saturday, January 03, 2015

The quality of a company’s workforce directly impacts its level of success, and in the current hiring climate, many businesses have been struggling to hire skilled workers or even receive a sufficient number of applicants.

Many of these hiring difficulties stem from a generational changing of the guard within the job market. Companies are now requiring candidates to be equipped with degrees for positions that previously didn’t require them, leading to competent workers being turned down who in previous years would have been hired.

Additionally, employers are finding the skills required for some positions are frequently not matching up to the skills possessed by applicants. Many candidates who opted to acquire a degree have lost out on direct work experience for the field they’re applying for. Technological shifts and job automation are rapidly changing industry needs and increasing the value of “soft skills” that are not always taught in universities.

Furthermore, a worldwide pandemic has led employers and employees alike to rethink their careers and store fronts, leading to many companies desperately trying to secure a work force in the midst of mass resignation and unprecedented job migration.

Because every business wants to hire and retain quality employees, this article will focus on breaking down the various hurdles facing business owners in today’s hiring climate, and detailing ways to overcome them and fill needed positions with skillful employees for the long-term.

The hurdles facing hiring teams

Talent shortages: It has become more of a common sight in the past few years to see stores closing early, offering less services, and reducing the days they’re open due to a lack of staff. These outcomes can not only be costly for business owners, but also damaging to their reputation among consumers for a considerable amount of time, in some cases persisting even after the talent shortages are resolved and standard operations are returned.

Talent shortages (lack of skilled employees) has led both local shops and big businesses to rethink their approaches to hiring, training, and retaining their employees. But before detailing these approaches, let’s first break down the largest reasons for talent shortages.

Both the amount of workers quitting their jobs and the amount of workers who would like to quit their jobs have increased drastically. These rates are sometimes referred to as “voluntary unplanned turnover” and “pent-up departure demand”. Based on several studies, these increases are, in part, due to:

  • Concerns around the COVID-19 pandemic (desiring to stay socially distant, concerned about family members at home, etc.)
  • Extended unemployment benefits
  • Burnout and depression caused by overworking
  • Large shifts in their industry (for example, since the pandemic, health care has seen extended hours, an increase in anxious workers, and increased HR requests for therapy coverage due to work stress)
  • Prolonging of schooling leading to individuals entering the workforce later than usual
  • Employees retiring earlier
  • Workers becoming more willing to explore other job opportunities or take extended time off from working

Degree inflation: When this term is discussed, you’ll hear it referring mainly to two specific trends that, while similar, are very different. One is more focused on the actions of hiring teams and the other is more focused on the prospective value of bachelor degrees in the coming future.

“Hiring Degree Inflation” denotes the growing trend of hiring teams requiring candidates to have degrees for positions that previously did not require them. This can create trouble not only for job candidates, but hiring teams, as companies may lose out on competent workers and candidates may lose out on perfect fitting jobs due to these degree requirements for jobs that may not fully be able to justify the requirement. With roughly ⅓ of Americans holding degrees, it may be beneficial for business owners to reconsider and hold more value in certificates, work experience, and the ability to train on-site for needed job positions, especially in this season in which many businesses are anxious for skillful workers.

“Candidate Degree Inflation” details the growing number of college graduates earning bachelor degrees and the growing trend of them becoming more and more common; and, debatably, perhaps less valuable and oversupplied. Some have argued that the internet, increases in student resources, and improved teaching has made degrees easier to obtain, and therefore claiming master’s degrees and PhDs to be the new defining quality to set apart job candidates that bachelor degrees once filled.

Regardless of if this argument holds up, the number of individuals obtaining bachelor degrees are on the rise, and so are the amount of jobs requiring them. While these two trends may seem well-tailored for each other, the pairing may be more ill-fitting than some may imagine.

Skill gaps: This term denotes either a misalignment or shortcoming in a worker’s/candidate's skill set and the skills needed to complete a job or occupy a position.

Let’s look at an example. Let’s say a job candidate is hired by a company due to the candidate having both a degree and experience in operating a specific type of aquatic device. This equipment training can be seen as a “hard skill” (technical and specific).

A year into the employee’s tenure, the model of the aquatic device is released for something that is more automated and less reliant on humans in order to operate. The employee’s position is then transitioned into more of a tour guide for her respective area of expertise by explaining to tourists how the aquatic device works. As a result, the worker needs to have good social skills, problem solving skills, and adaptability to perform this new job (“soft skills”).

Because the worker was hired on to complete a more technical, specific, and solitary position and is not being transitioned into a broad and social position, there may be a skill gap that ensues. Due to their skill set not matching with the skills required for the job, the employee may be unable to perform their duties, and as a result may require training or need to be placed into a different position that is more aligned with their skill set.

The skill gap outlined above is a more local example, but skill gaps can often be wide ranging and enveloping entire generational shifts and descriptive of entire subsets of workers (“millennials”, “zoomers”, “blue collar”, etc.)

How can HR combat talent shortages?

Look for talent already present within your business: The ideal candidate to fill your position may already be working for you! Extending job offers to your workers and providing on-site training can save you money and time that you would have spent completing the typical hiring process. Additionally, your workers may appreciate having offers extended out to them first, and in response grow in loyalty toward your company or brand.

Modify job criteria: The more specific a job’s requirements are, and the more stringent hiring teams are in finding candidates matching them exactly, the longer positions will remain unfilled and cost you money and stress. It’s worth considering which aspects of the criteria are non-negotiable and which areas can be taught on-site or picked up after some time with the company. Who knows? Giving slightly less than ideal candidates a chance may lead to new perspectives, unforeseen skills, and valuable experience entering your workforce.

Make your hiring process as efficient as possible: If your hiring and onboarding process isn’t streamlined, accessible, and reliable, then you’ll be at risk for leaving positions unfilled longer and losing out on potential job candidates. A modern recruitment and onboarding software can help your hiring team collaborate, communicate with candidates, and complete the hiring process more efficiently so that you’ll be able to reach skilled candidates and hire them before competitors can (see: "Why is recruiting and onboarding software important for your team").

Transfers and contractors: If your business is more far reaching, consider seeing if locations in need of help can be sent workers from more stable locations. Additionally, if the help you’re in need of is seasonal or temporary, hiring out contractors to help assist your workforce in times of need can be a good choice to save you both time and money.

How can HR combat degree inflation?

Consider which positions truly require a degree: Just because it’s currently the norm for most businesses to automatically require college degrees for managerial, technical, or post-entry positions doesn’t mean you have to follow suit. Have your hiring teams take the time and do the research on precisely what skills the job position requires and what exact skills the corresponding degree is likely to provide. After your research, consider adjusting the job skills accordingly, and perhaps both the candidate pool and the chance of a successful hire taking place will be widened.

Re-evaluate certificates, credentials, work experience, and readiness to train: Going off the previous point, it could be useful to deeply evaluate which skills are necessary to complete a job listing and consider if other types of certificates, work experience, or candidate malleability can take the place with a bachelor's degree.

More likely than not, permitting more allowance for certificates would be useful for more technical positions with specific and distinct duties. Older candidates are more likely to possess larger durations of work experience; so if expertise and wisdom are valuable for a position, consider seeking out this specific demographic.

How can HR combat skill gaps?

On-site training: For some positions, a candidate who is willing to learn, is a good listener, and is adaptable could be a worthy investment and could actually save you money in comparison with someone more qualified for a specific position. Modern onboarding software can streamline employee training and help you fill needed positions faster and at a less expense to your workforce having to train the new hire.

Setup your workforce for long term success: We mentioned earlier the benefits of extending job offers to your workforce before looking elsewhere. Additionally, another benefit of this hiring pathway is combating possible skill gaps. For example, restaurants commonly set up their workforce in such a way that when positions become open, entry level workers can apply, be trained in, and mentored for the needed jobs. Constructing your workforce in this manner can go a long way in saving you time, money, and stress in having the more complicated positions of your business being handled and supplied naturally through your very own workforce, thereby allowing you to focus more on the recruiting and hiring of the entry level positions of your company which are typically easier and less costly to fill.

Contract experts temporarily to train new hires: Another option when faced with a candidate or worker with a skill gap is to temporarily hire an expert in the job position to train the individual until they are able to complete the job on their own. While this might seem costly at first, this pathway can end up saving you costs in comparison with hiring a more expensive and demanding candidate who already has the skills the position requires.

Closing thoughts

Hiring teams and business owners certainly have some hurdles in front of them post pandemic, and understanding why talent shortages and skill gaps are occurring and how degree inflation is affecting the job market is crucial to beginning to implement solutions and new hiring techniques.

Taking advantage of modern recruitment and onboarding software can go a long way in helping you not only find, but retain, quality employees. Additionally, these softwares, contract workers, and your own workforce can assist in bridging the gap in skill that some new hires may have, thereby creating competent and loyal employees who are ready to fill the positions that your business so critically needs.

Interested in teaming with our human resource professionals or taking advantage of our HR solutions?

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