Organizations worldwide are frustrated by the challenge of finding well-qualified talent, which makes the fight to hire a top candidate even tougher.
Manpower Group’s annual Talent Shortage Survey revealed that last year, 40% of employers worldwide reported difficulty filling jobs. It’s not just your HR department feeling the pain, either; according to a recent Deloitte survey, 33% of CFOs said that the current talent shortage remains the top barrier to business growth.
What has caused the talent shortage? Let’s look at four contributing factors within the manufacturing industry as a microcosm of what’s happening on the national scale.
1. Low unemployment and a skills gap
The U.S. Bureau of Labor Statistics’ most recent unemployment rate was 4.1%. In general, such a low number is considered a good thing. The problem is that today’s employers are struggling to find the right people for their open positions: the qualified ones. Research conducted by Deloitte and the U.S. Council on Competitiveness indicate that manufacturing executives, for example, consider the “quality and availability of talent” to be the most critical part of competitiveness in their industry. Low unemployment means that employers have to work that much harder to find skilled candidates who currently aren’t working – or find competitive ways to convince employed individuals to make the switch to work with them.
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Business expanding post-recession
Just before and after the turn of the millennium, rapid growth of tech industries and offshoring labor led to industries like manufacturing taking a back seat in the national economy. Manufacturing jobs – and their accompanying skills and know-how – were displaced, outsourced and diminished in favor of such service sectors as financial services and health care.
Once the Great Recession hit, Americans rethought the idea of manufacturing. In a survey conducted annually between 2009 and 2014 with the Manufacturing Institute, Deloitte found that most Americans would choose to add 1,000 jobs in manufacturing centers. More jobs might have been created as a result, but the skills gap left hundreds of thousands of jobs unfilled – an estimated 600,000 in 2011 alone, for example.
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An improving economy
Historically, times of economic turmoil often are followed by bounce-back periods of growth. The current expansion post-Great Recession already has lasted 95 months, making it the third-longest in U.S history.
However, improvement can lead to fears of yet another “overheating,” sending the economy again into a recession-like period. As long as the economy expands, more jobs will be created, along with the need to fill them; the skills gap will counter naturally by holding back the right talent from taking those positions.
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Retiring baby boomers
Fresh talent coming through the American employment pipeline is considered weak compared to that of other nations, both developed and emerging. Research from the Program for International Student Assessment indicates that young Americans are behind on math, science and reading.
That’s a big problem. Deloitte estimates that 3.4 million manufacturing jobs will be open in the span between 2015 and 2025 – partly due to the 2.7 million baby boomers expected to retire during that time. Many of these positions are expected to remain unfilled due to the shortage of workers with the skills necessary to operate in the advanced manufacturing environment of the 21st century. What we see in the manufacturing sector is happening in other industries as well, which illustrates several reasons companies are struggling to find and retain top talent.