Are you currently having trouble recruiting for certain positions at your company? Do you find yourself wondering where all the qualified candidates have gone? Take comfort in the fact that you are not alone. According to CareerBuilder’s 2016 Job Forecast, 33 percent of small business employers currently have positions for which they can’t find qualified candidates. And nearly double the amount (60 percent) are concerned about a growing skills gap in the U.S.
The talent shortage presents serious challenges for small businesses. Forty-two percent reported they have seen a negative impact on their business due to extended job vacancies with 27 percent citing a loss in revenue, 41 percent experiencing a loss in productivity and 29 percent pointing to a lower quality of work.
While the talent shortage is in part an information gap – people aren’t necessarily aware of the jobs that are out there and growing – a recent CareerBuilder study found that the number of students graduating in in-demand degrees is not keeping up with the demand for those skills. Increasing awareness about the opportunities and need for talent in these areas may be one solution to this problem, it is by no means a quick fix. In the meantime, employers need to take matter into their own hands to fix the skills shortage at their own companies.
Is higher wages the solution?
Skill shortages aren’t unique to this generation. In 1913, Henry Ford faced this very same problem. According to a recent Forbes article, Ford was losing production-line workers so frequently, he had to hire 963 people to ensure 100 of them stayed with him. As a result, he was losing money due to lost production. Finally, Ford made a game-changing decision and began offering a $5 per day pay package (base and bonus) – more than twice the going rate at the time. Despite increasing his labor costs to $9.4 million, Ford turned out a record-breaking profit of $30 million the next year. The lesson? Increasing wages to capture and keep the talent you need will pay off in the long-term through increased productivity, a better quality of product and, ultimately, a better bottom line.
But while raising wages and increasing compensation packages may be the obvious solution to recruiting needed talent, the reality is, many smaller companies do not have the resources to meet – or surpass – the compensation packages bigger companies can.
But hope is not lost for small businesses. First of all, small businesses offer their own unique benefits that are attractive to many up-and-coming talent. Take, for example, the ability to wear many hats, be a “big fish” in a small pond, work in a collaborative environment and move up through the ranks quickly. Small business employees also do not have to deal with the amount of office politics and red tape that are pervasive in so many larger corporate environments.
However, sometimes culture isn’t enough to attract and retain in-demand candidates. What then? For many companies the solution is to “hire for potential and train for skill.” That is, hire candidates who may not have all the qualifications, yet show passion and capability, and invest in training them for the job at hand. Here at CareerBuilder, we’re proof that this strategy works. We run six-month, paid internships in technology for long-term unemployed workers – many with limited or no technical experience. The vast majority of our interns have gone on to find tech-related jobs at other companies. We purposely designed the program to have candidates find jobs outside of CareerBuilder to prove that programs like this can be effective for teaching workers in-demand skills in a relatively short period of time.
Some employers are hesitant to invest in training, fearing that as soon as employees gain highly marketable skills, they will leave them to work for their competitors; however, studies show that investing in employee training and education actually increases loyalty among employees. Not to mention that opportunities for learning and development are often one of the top factors job seekers look for most when evaluating potential employers.