How Better Incentives Can Help Tackle The Skills Shortage
Complaints about the lack of skilled, qualified candidates have been ringing loud and clear. But an obvious solution to the problem has been hard to come by. Employers face a job market where the skills shortage is growing, but also unemployment is falling and candidate preferences are changing. Many recruiters are left wondering how they can make their organization’s job openings stand out and attract the best talent.
One answer may be incentives–the competitive salaries and other benefits that appeal to candidates. But we’re not simply suggesting employers offer outlandish pay packages. Incentives come in many forms, and the ones best suited to addressing skills gaps are those that help employees increase their knowledge and skills over time.
Apprenticeships, on the job training, tuition reimbursement, and other forms of career development that promote continued learning have been in decline. And the educational institutions that prepare young workers have not picked up the slack employers are leaving behind. In this post we’ll discuss the disparities between the workplace training both schools and employers offer, and how more skills-focused incentives can help bridge the gap.
Is the Skills Shortage Really That Bad?
Business leaders in high-growth and high-skilled industries have bemoaned the lack of skilled candidates for years, with some even pushing for changes to immigration policies. And a study by Wanted Analytics last year revealed some of the most in-demand jobs and skills in the U.S. rely on technical training. Across all industries, 52% of employers in a CareerBuilder survey last year reported they had unfilled jobs due to a lack of qualified candidates.
No one seems to doubt that the skills workers have today are not keeping pace with those required by employers. What is up for debate is the best way to reduce the shortage. One survey found that 96% of academic leaders felt their institutions were preparing young adults for the workplace, but just 33% of business leaders agreed. Rather than bicker over where responsibility for skills development lies, all parties including job seekers need to understand how more appropriate training can lead to better employment opportunities.
Education and Building Skills
Educational institutions are typically expected to prepare their students for the workplace and the adult world. And by some measures, American schools are doing their part. Millennials can now boast they are the most educated generation, and educational attainment overall is on a steady path upwards.
Schools are undoubtedly aware of the end result their graduates want: a job. But they also have other demands to meet, including boosting enrollment and graduation rates, and catering to student interests and ideals. The question for educators is just how far should they do in emphasizing career prospects over everything else.
As we mentioned above, many educational leaders feel they are already doing their part to provide training for the labor force. But some recent studies reveal a discouraging number of graduates are not translating their education into appropriate jobs. Among graduates of community colleges in California, just 36% were found to have a job that directly corresponded to their field of study. Another survey revealed that 45% of recent graduates are considered underemployed–working in a role that doesn’t require a degree at all.
Employers and Incentivizing Skills
Many employers would read those survey results and argue that educational institutions need to focus more on funneling students towards in-demand career paths, and provide more training in technical skills. In other words, incentives for career development should start in the classroom. But the demand for skills can’t be fixed with a one size fits all solution, and it’s also not a one-time deal.
For years now, employers have cut back on apprenticeships and on the job training programs. The U.S. Labor Department estimates the number of apprenticeship programs has fallen by 40% since 2003. And the employees among U.S. manufacturers whose job is to provide training and development for others has decreased by nearly 50% since 2006.
This strategy may have worked in employers’ favor during the recession, but the balance of power in the labor force has been swinging back towards job seekers. And those candidates are well aware that neither education nor employment are providing the skills they need. When CareerBuilder asked job seekers what they think is causing the skills gap, 55% blamed education and 53% highlighted the absence of on the job training.
Workers of all ages can see the value in skills development and further education–after all, no one wants to be made redundant by advances in technology. And Millennial workers seem especially attuned to the importance of career development. When asked to list top priorities for an organization if they were in charge, over 30% listed employee well-being, growth, and development. These workers clearly want their business leaders to focus more on training and education in the workplace.
How Recruiters Can Help
Recruiters are actually well positioned to help bridge the skills gap when it comes to offering incentives. After all, they’re the ones responsible for advertising open positions and reviewing candidates. So the incentives recruiters can offer should be thoroughly reviewed, to ensure better alignment with job seekers’ preferences and employer needs.
Higher, or more competitive wages, are usually the first step. And it’s hard to argue with the premise that the most qualified candidates want to earn the highest wages they can get. But not every company can meet those demands, and many applicants don’t focus on salaries alone. This is where incentives relating to career development can really set your vacancies apart.
If your organization can offer some type of employee training or development, that should be prominently features in the job posting and on your career website. This could range from tuition reimbursement (outsourcing employee development) to training in-house (building skills internally). These incentives show candidates that your organization offers more long-term growth opportunities, and values employees’ career goals. Which is all the more reason for them to apply, get hired, and stay for years to come.
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