What Is Talent Scarcity & How Employers Can Overcome It?
Talent scarcity refers to situations in which the demand for a specific skill set exceeds the available supply in the job market. Also known as talent shortage, this global issue has become one of employers’ most challenging hiring problems. A recent study found that “nearly 4 in 5 employers globally report difficulty finding the skilled talent they need in 2023, strengthening +2 percentage points year-over-year and more than double the difficulty in 2015.”
In this article, we’ll take a closer look at the challenge of talent scarcity, factors perpetuating the problem, and what employers can do to overcome talent shortages and find skilled workers prepared for the future of the workplace.
Why Is Talent Scarcity a Challenge for Employers?
Talent scarcity puts a brake on growth and innovation, reducing a company’s competitiveness and profitability. Talent scarcity also affects employee morale, as current staff often have to take on additional responsibilities to compensate for unfilled roles. This may result in overwork, burnout, and high turnover rates.
What Factors Are Driving Talent Scarcity?
Talent shortages are influenced by many different factors that overlap and interact in complex ways. Some key factors driving talent scarcity include:
- Technological advancements: Rapid advancements in technology have led to a growing demand for workers with tech-savvy skills. From AI specialists to data analysts, the pace at which new roles are emerging is faster than the rate at which skilled professionals can be trained.
- Demographic shifts: The ageing workforce in many developed countries is resulting in a significant number of retirements, creating a shortage of experienced professionals. In contrast, younger generations entering the workforce may lack the necessary skills and experience, creating a skills gap.
- Changes in the nature of work: The shift towards more flexible, remote, and project-based work often requires a new set of skills that may not be readily available in the existing talent pool.
- Educational mismatch: There’s often a disconnect between the skills taught in educational institutions and the skills needed in the workplace. This mismatch can lead to a surplus of workers in some areas and a shortage in others.
- Geographical disparities: Talent is not evenly distributed around the world. While some regions have an oversupply of certain skills, others face acute shortages.
- Rapid industry growth: Industries such as technology, healthcare, and renewable energy are growing at a swift pace. This rapid expansion often outpaces the availability of skilled workers, leading to talent shortages.
How Can Employers Overcome Talent Scarcity?
Here at Generation, we are addressing talent scarcity at its roots with our free employment programmes around the globe. However, there are steps employers can take as well to combat the challenge of talent shortages. From hiring solutions to promising partnerships, here’s how employers can overcome talent scarcity issues.
Reimagining Hiring Processes
In a talent-scarce environment, traditional hiring processes might not work. Companies may need to be more proactive and innovative in their approach. This can include implementing skills-based hiring practices, or adopting remote working policies to tap into a larger, global talent pool.
It’s crucial for companies to open up candidate pipelines from new sources that can deliver talent with the right skills, even if they might not fit traditional profiles. This broader sourcing is essential for reaching the right people and the most talent.
Upskilling Existing Employees
Rather than looking externally for new hires, companies can invest in upskilling their existing workforce. This not only provides a solution to talent scarcity, but also boosts employee morale, improves productivity, and reduces turnover. Offering opportunities for personal and professional development can also make your company more attractive to potential employees.
Embracing Diversity and Inclusion
A diverse and inclusive workplace can give companies a competitive edge in the global market. Diversifying in the context of gender, ethnic background, age, and more is key for expanding the talent pool. Embracing diversity also brings a host of other benefits, including a variety of perspectives, improved problem solving and decision making, and increased creativity.
With an adaptive mindset and innovative strategies, employers can successfully navigate the challenge of talent scarcity, ensuring their businesses continue to thrive. Employers must view this as a chance to revamp their recruitment strategies, invest in their existing workforce, and ultimately build a resilient and future-ready organisation.
Collaboration with Educational Institutions and Employment Programmes
Creating partnerships with educational institutions can help employers tap into a pool of fresh talent. These partnerships can also be used to develop curricula that equip students with the skills needed for specific industries, ensuring a steady flow of suitably trained graduates.
Partnering with Generation is another excellent way to solve talent scarcity. Generation offers a reliable pipeline of highly skilled talent that’s ready quickly, since our bootcamp-style programs last a matter of weeks. Our training requires extensive practice of the most important activities so that our graduates are your best employees from day one on the job. In fact, 82% of our employers say that Generation graduates out-perform their peers!At Generation, our mission is to train, support, and place people into otherwise inaccessible career opportunities that can change their lives. Explore our employment programmes to see how we can help you, or donate today to help us create career opportunities for our learners!