No longer just a trend, today’s tight labor market is something that hiring managers in every industry grapple with each day. With demand in most fields outpacing supply, a dramatic skills shortage has driven the national unemployment rate down to 4.1%. Such a low level indicates the country is at a level of full employment that has talent happily employed while hiring managers struggle to keep their organizations fully staffed. This phenomenon stunts the growth of businesses in a number of ways and magnifies the importance of implementing a new hiring strategy.
When a growing business is understaffed, it becomes especially vulnerable. This is easily seen in the tech industry, where so many cyberattacks are happening each day that they are now the fastest-growing crime in the U.S. As a result, companies are investing heavily in cybersecurity measures and strongly recruiting the tech pros who can safeguard their operations. When a business is unable to quickly find cybersecurity talent they need, it is essentially inviting hackers to walk in through the front door.
The concern of added vulnerability is not limited to tech initiatives. When a business cannot find a great Accountant or Auditor, it is again vulnerable. After all, how can a business continue to grow if it can’t maintain accurate financial records, properly audit operations, or maintain an accurate payroll? The tight labor market is keeping these and other vital roles open longer, increasing risk.
Fresh talent is crucial to a growing business because new professionals bring with them new ideas that can move an organization forward. While this may be most obvious in the creative industry where imagination is a job requirement, it is essential to roles in any type of business. Even manufacturers understand the need for creative minds, sometimes offering incentives to assembly line employees who suggest actionable improvements to processes. Just as with human development, the early years of any business have a distinct impact on its long-term health. As a business tries to establish itself further, it feeds off of new ideas and information to sustain growth.
Hurts Efficiency and the Bottom Line
To put it simply, things can’t get done unless a business has the people to do them. When talent is hard to find, roles stay open longer. This puts greater stress on existing employees as they are typically tasked with covering an open role’s duties. Even if they can miraculously keep up on deliverables, stretching resources in this fashion is guaranteed to reduce quality and burn out even the best professionals. Today, the average cost per new hire is $4,129, and it takes an average of 42 days to secure that individual. In hot industries like Finance & Accounting, IT, and Creative, those numbers can stretch even further. As expenses pile up and roles are left open for months, efficiency and profits will decline, inhibiting further growth.
Helps the Competition
Even though all businesses must face the same tight labor market as their competition, the shallow talent pool actually magnifies disparities between companies instead of evening out the playing field. Out of all an organization’s competitors, there will always be one or more who hire strategically and adapt to a tight labor market quickly. Likewise, some competitors may simply have more capital so that they can weather the storm longer. When a business hesitates to adapt to the challenging labor market and implements a “wait and see” approach instead of a new hiring strategy, they allow their competition to get further ahead and are left behind with a distinct disadvantage.
Overcoming a Tight Labor Market
While hiring managers have seen better times, the news isn’t all bad. Despite the challenges a tight labor market brings, there is also an opportunity to reevaluate the ways talent is acquired. A proven staffing partner like Highmark can quickly deliver the right talent who can keep your company productive, ahead of the competition, and as successful as possible.
Looking for further hiring insight or the latest compensation figures for your industry? Download your 2018 Tech or Creative Salary Guide today.
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