In recent years, more companies have been facing a challenge in getting enough competent people onboard. The labor market for top talent is getting tight, while we also witness a Great Resignation trend.
So, how can HR approach this challenge?
The situation is complex and can be viewed from different perspectives. The focus of this article is on how Recruitment and L&D can work together to create a few solutions.
A useful view to start from is Ulrich’s comment that talent management today should be more about work task planning than about workforce planning (Ulrich, From workforce planning to work task planning, 2019). Once the company decides about its strategy, key strategic capabilities, and positions, these can be translated into specific tasks. With tasks defined, we can start thinking about different options to accomplish them (full-time employees, part-time employees, consultants/freelancers, outsourcing, and technology i.e. automation).
So, questioning our assumptions that we need full-time employees for all tasks is a useful starting point.
Another valuable approach is a skills-based, rather than an experience-based approach to hiring. After we have identified the tasks, we should identify the skills needed to perform them, as opposed to (guessing) which qualification and experience a person needs.
This is another key point where we should question our implicit assumptions about what is really needed for a task to be done. By focusing on skills we want to see in action, we can significantly broaden our talent pools.
In line with this trend, LinkedIn has registered an increase of 21% in US job postings listing the skills and responsibilities, rather than qualifications and requirements. The number of job postings that don’t require a degree has increased by 40% between 2019 and 2020 (Roslansky, You Need a Skills-Based Approach to Hiring and Developing Talent, HBR, 2021).
Building on these two approaches, work task planning and a skills-based approach to hiring, let`s review three basic recruitment strategies – buy, build and borrow.
In the “Buy” strategy, we hire people from outside of the company. But how do we approach this strategy when the pool of available candidates is shrinking? You spend a lot of organizational resources to identify and then literally court potential candidates. If you are lucky to get them on board, you will probably have to pay them more than your current employees in the same positions. Not an ideal move for the engagement of your people.
One way to address this problem is to go for “near match” candidates, rather than ideal ones. Near match candidates are those who are motivated for the position, have the skills and competencies required, but lack some aspects of technical knowledge and/or professional experience.
For example, a US-based Merit Bank`s team of recruiters is rumored to go to local retail stores in search of employees with great customer service skills. They would return the goods to retail employees to assess how they respond to more difficult interactions with clients. It turned out that these people were a powerful addition to their client-facing positions, after receiving thorough training in banking products and processes.
Going for a “near match” rather than for a “perfect match” candidate requires a more strategic approach to workforce planning.
Internship and apprenticeship schemes are one example of this approach. Cooperation with educational institutions for reskilling and upskilling of employees is the other.
A good example of the latter is the case of a US-based Penske Truck Leasing company that was facing the challenge of finding enough skilled employees. Penske partnered with Penn Foster School in 2006 to design an in-house development program that supports employees to upgrade and keep their skills up to date with the technology-driven transportation industry.
In a study conducted to evaluate the results of this investment in employees` education, „Penske found that more than 60 percent of its certified associates receive a promotion“. They also learned that employees who got certified through this program are 50% more likely to stay with the company, compared to non-participants (Penske Truck Leasing and Penn Foster: Focused on Delivering Career Pathways for Millennials, Forbes, 2017).
Another great source of „near match“ candidates are the current employees of the company. They know the culture, and how to get the job done and need less time to get up to speed than new joiners. Furthermore, they are more engaged and stay longer when they have the opportunity to develop in the company. According to the LinkedIn Learning Report 2022, „Companies that excel at internal mobility retain employees for an average of 5.4 years, nearly twice as long as companies that struggle with it, where the average retention span is 2.9 years“.
And, „Employees who feel that their skills are not being put to good use in their current job are 10 times more likely to be looking for a new job than those who feel that their skills are being put to good use“. Therefore, investing in employees` skills development makes a lot of sense both from the perspective of filling the open vacancies and retaining people.
This “Build“ strategy of hiring also requires a strategic approach and good workforce planning.
Internal talent marketplaces, AI-enabled platforms that help match open roles with internal employees, appeared and started to grow as an exemplar of this strategy. By being transparent about the open positions and identifying employees with the right skills, we decrease the chance of losing good people who feel stuck in their careers. Tailored development solutions help these people move from “near match“ to “perfect match“ candidates.
Of course, the company doesn’t have to wait to have an open position to post it internally. It can also announce the positions that will be in need in the future. For example, HCL takes this approach and invites employees to start tailoring their development journey towards them.
And finally, “Borrow“ strategy can also take different forms.
Some companies create a system for “borrowing“ internal people for specific, short-term projects. Unilever introduced an AI platform called Flex Experiences, to match employees` skills with internal projects. It came to life during Covid 19 lockdown, when the Data science team needed to grow quickly, to respond to the pressing needs for information about evolving customer needs and expectations. They were looking for people with a variety of backgrounds, expertise, and experience, to form a Covid 19 I&A squad. These team members from across the organization agreed with their managers on the number of hours/days per week they would dedicate to this work (An exciting new normal for flexible working, Unilever news, 2020).
By using this approach, Unilever manages to quickly respond to business needs, finding the right people for the projects. At the same time, it provides wonderful opportunities for employees to develop skills and knowledge and stay engaged.
A different form of “borrowing” is using the external network of people, such as freelancers.
According to UpWork`s 2021 Freelance Forward survey, 36% of the US workforce freelance, with the share of non-temporary freelancers rising. Freelancing is growing among the most educated, while shrinking among the least educated. The number of freelancers who earn more than in their traditional jobs continues to grow (from 32% in 2019 to 44% in 2021) and 56% of non-freelancers say they are likely to freelance in the future. So, it looks like freelancing is here to stay, and HR professionals should take this into account when thinking about resourcing strategy for their company.
Engaging a freelance consultant for the first time is often perceived as risky. There are a lot of unknowns in this situation – the quality and style of work, commitment to work and deadlines, cooperation style, etc. We rely on references and quick checks of fit for our project. The decision feels even riskier when we consider that we have less control over freelancers’ performance, compared to the work of our employees. Issues such as confidentiality of work, and intellectual rights, further make these arrangements more complex.
To overcome this challenge, many companies tend to form long-lasting relationships with freelancers. Continuously working with the same pool of experts, they build trust and get to know each other well. This makes the collaboration better, more efficient, and more pleasant for both sides.
Consulting is one of the industries that has been using this approach for quite a while to be able to quickly form high-quality teams, while keeping costs under control.
As a consequence of these long-term relationships, boundaries between insiders and outsiders can become blurry. In the words of Alok Singh (CIPD HR Hackathon Day 3 top-voted idea): “As employment relationships become even more diverse, traditional norms for employee benefits and talent development will no longer be relevant. If a contractor staff has more organizational memory than most of your employees, then it is in your interests to pay for their retention. If a consultant leading on a 2-year project is expected to make a major contribution to business delivery, it may make sense to invest in developing their leadership skills, and to incentivize performance with variable pay/bonus”.
In the consulting industry, it is not rare for companies to invest in upskilling their external consultants to ensure top-notch service delivery to their clients.
So, let’s take a fresh perspective on who can do the work and join our recruitment and L&D forces to deliver innovative solutions.