December 2016 Prosperity at Work E-Tip
Economics & Job Creation:
“THE EMPLOYMENT SITUATION — November 2016”
“The High Cost of Picking a Wrong Leader”
“Imaging technique can see you think”
“Activity trackers can work when paired with wellness coaching”
“4 Ways to Build Talent Pipelines of the Future”
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Economics & Job Creation:
THE EMPLOYMENT SITUATION — NOVEMBER 2016
The unemployment rate declined to 4.6 percent in November, and total nonfarm payroll
employment increased by 178,000, the U.S. Bureau of Labor Statistics reported today.
Employment gains occurred in professional and business services and in health care.
Household Survey Data
In November, the unemployment rate decreased by 0.3 percentage point to 4.6 percent,
and the number of unemployed persons declined by 387,000 to 7.4 million. Both measures
had shown little movement, on net, from August 2015 through October 2016. (See
Among the major worker groups, the unemployment rate for adult men declined to 4.3
percent in November. The rates for adult women (4.2 percent), teenagers (15.2 percent),
Whites (4.2 percent), Blacks (8.1 percent), Asians (3.0 percent), and Hispanics (5.7 percent)
showed little or no change over the month. (See tables A-1, A-2, and A-3.)
The number of job losers and persons who completed temporary jobs edged down by 194,000
to 3.6 million in November. The number of long-term unemployed (those jobless for 27
weeks or more) was little changed at 1.9 million and accounted for 24.8 percent of the
unemployed. Over the past 12 months, the number of long-term unemployed was down by
198,000. (See tables A-11 and A-12.)
The civilian labor force participation rate, at 62.7 percent, changed little in
November, and the employment-population ratio held at 59.7 percent. These measures
have shown little movement in recent months. (See table A-1.)
The number of persons employed part time for economic reasons (sometimes referred to
as involuntary part-time workers), at 5.7 million, changed little in November but was
down by 416,000 over the year. These individuals, who would have preferred full-time
employment, were working part time because their hours had been cut back or because
they were unable to find a full-time job. (See table A-8.)
In November, 1.9 million persons were marginally attached to the labor force, up by
215,000 from a year earlier. (The data are not seasonally adjusted.) These individuals
were not in the labor force, wanted and were available for work, and had looked for a
job sometime in the prior 12 months. They were not counted as unemployed because they
had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 591,000 discouraged workers in November, little
different from a year earlier. (The data are not seasonally adjusted.) Discouraged
workers are persons not currently looking for work because they believe no jobs are
available for them. The remaining 1.3 million persons marginally attached to the labor
force in November had not searched for work for reasons such as school attendance or
family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment rose by 178,000 in November. Thus far in 2016,
employment growth has averaged 180,000 per month, compared with an average monthly
increase of 229,000 in 2015. In November, employment gains occurred in professional
and business services and in health care. (See table B-1.)
Employment in professional and business services rose by 63,000 in November and has
risen by 571,000 over the year. Over the month, accounting and bookkeeping services
added 18,000 jobs. Employment continued to trend up in administrative and support
services (+36,000), computer systems design and related services (+5,000), and
management and technical consulting services (+4,000).
Health care employment rose by 28,000 in November. Within the industry, employment growth
occurred in ambulatory health care services (+22,000). Over the past 12 months, health
care has added 407,000 jobs.
Employment in construction continued on its recent upward trend in November (+19,000), with
a gain in residential specialty trade contractors (+15,000). Over the past 3 months,
construction has added 59,000 jobs, largely in residential construction.
Employment in other major industries, including mining, manufacturing, wholesale trade,
retail trade, transportation and warehousing, information, financial activities, leisure
and hospitality, and government, changed little over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4
hours in November. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours,
while overtime was unchanged at 3.3 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See
tables B-2 and B-7.)
In November, average hourly earnings for all employees on private nonfarm payrolls
declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year,
average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-
sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.
(See tables B-3 and B-8.)
The change in total nonfarm payroll employment for September was revised up from +191,000
to +208,000, and the change for October was revised down from +161,000 to +142,000. With
these revisions, employment gains in September and October combined were 2,000 less than
previously reported. Over the past 3 months, job gains have averaged 176,000 per month.
“The High Cost of Picking a Wrong Leader”
Selecting a CEO is arguably one of the most vital decisions a board makes. Companies that choose the wrong leader can suffer hits to their stock price and market capitalization and lose in a variety of areas — momentum, opportunities, reputation, customer goodwill and, perhaps most importantly, trust within the organization, which can take years to re-establish.
A new report, authored by Spencer Stuart search consultant Jeff M. Hauswirth, looks into the impact selecting the wrong CEO can have on an organization. Mr. Hauswirth is a member of Spencer Stuart’s global CEO and board practices group and has racked up more than 20 years of experience conducting CEO and board mandates across diverse industries, including real estate, industrial, technology and media. He has led more than 150 CEO, president and general manager searches, most of which involved identifying and recruiting talent from around the globe.
According to any number of reports, the impact of the CEO on an organization — especially one who fails — is staggering. The economic cost of appointing the wrong top leader at global companies is estimated at more than $100 billion, according to a report by PwC. Nearly one third of investment decisions are related to the reputation of the CEO; 39 percent of investors say they would likely sell a stock based solely on the CEO, while only 15 percent say they are likely to buy a stock based on the CEO’s current reputation alone, concluded recent FTI Consulting findings.
A study conducted by Rakesh Khurana, dean of Harvard College, and Nitin Nohria, dean of Harvard Business School, found that CEOs appointed after 1985 were three times more likely to be fired than CEOs who were appointed before that year.
According to Harvard Business School, 40 percent of all executives who change jobs or get promoted fail in the first 18 months, a number that has remained steady for the past 15 years. Despite understanding the high stakes of these decisions and witnessing high-profile failures, boards have not made wholesale improvement in CEO selection. So why is CEO succession and selection so hard to get right? Many boards still cling to a CEO selection process that sets organizations up for failure.
“Concern over hiring the wrong CEO can lead some boards to a cautious, closed search process designed to minimize the risk of failure,” said Sam Pettway, founding director of BoardWalk Consulting – a specialist search firm focused on recruiting CEOs and senior leaders for non-profits and foundations. “We say refocus that concern.” The best searches, he noted, are creative, impactful, innovative efforts designed to attract aspirational candidates to a compelling mandate. “Yes, it might be expensive to unravel a bad hire, but the opportunity cost of a truncated or mediocre search can be far higher. As an early boss once preached, ‘Why do we never have enough time to do it right but always enough to do it over?!’”
Where the Process Breaks Down
The stakes of CEO selection require a process with commensurate rigor, according to Spencer Stuart. However, boards can overlook important components of the process, especially if directors have never had to address succession previously. Here are some of the most common missteps the search firm has come up with:
1. The right people are not involved in the selection.
While the expertise of a previous CEO on the committee is valuable, some boards become too reliant on this perspective. Similarly, the process runs more smoothly when at least one member of the CEO selection committee previously chaired one. However, this experience is rare given the episodic nature of CEO selection. Boards should prioritize CEO succession expertise when recruiting new members, even if there is no imminent transition. For the right balance of efficiency and diversity of perspectives, the optimal size of the committee is three to four directors, typically including the lead director or non-executive chair. Audit committee chairs should not be assigned to the selection team, as the time commitment is too great in the face of their existing responsibilities.
Some organizations have found it helpful for the current CEO to act in an “of counsel” capacity. However, depending on the level of emotion in the situation, the CEO’s involvement may do more harm than good. Even when the CEO has proactively made the decision to leave, it can still be challenging for the executive to hand over the helm.
Additionally, board members with aspirations for the CEO role can quickly undermine the integrity of the process and should recuse themselves well in advance of the formation of the selection committee.
2. The board may not be equipped to evaluate CEO candidates.
On average, boards tend to be extremely effective at understanding industry dynamics and financial and strategic planning. However, it is far more challenging to accurately assess a potential CEO successor’s integrity, fit with the organizational culture, ability to inspire and energize the enterprise, and capacity to develop other leaders. Thus, many committees can fall into the trap of overlooking or discounting what they cannot tangibly measure. Drawing on experts with a history of CEO and executive assessment can help provide a fuller picture of the candidate’s potential, as well as strengths and areas for development.
3. The CEO specification does not align with the organization’s strategic goals.
At times, the articulated strategy is too rooted in the present and can include status quo assumptions, rather than reflecting a view of where the company needs to be in five to 10 years. If the specification is built upon an outdated strategy, the successor could be set up for failure. The criteria for the new CEO should be tied to the strategic, organizational and operational levers that the next CEO will need to employ.
The length of the selection process also impacts the CEO specification, said Spencer Stuart. The process can easily take more than two years, during which the market can change dramatically. However, many committees can be reluctant to pause the process to reassess whether the expectations are still relevant out of fear of perceived failure.
4. There is lack of alignment on how the process should work.
A lack of agreement on the overall succession plan can undermine the selection process — and the successor’s future success. A recent survey conducted by PwC revealed that nearly half of directors were divided on their companies’ succession plans. Lack of alignment on the process may also indicate differing perceptions of the strategy and how to execute it, which can quickly derail a new CEO. Without unified board support, the successor can quickly fall into the trap of navigating conflicting mandates rather than delivering on the organization’s strategic goals.
The Spencer Stuart report also looked into why CEO succession and selection is so hard to get right. Many boards still cling to a CEO selection process that sets organizations up for failure, said the search firm.
A Best-In-Class Process
While many factors contribute to selecting the wrong CEO, a strong succession framework significantly increases the odds of a long-term successful outcome. Taking the following steps can help organizations create a more surefire process.
Opt for a committee that provides options. Ensure the committee provides a slate of choices to the board — two to three candidates — after a transparent, inclusive process. Some committees tend to be more insular and hold more power in making the final decision; rather than presenting a few finalists, selection committees present a single candidate for the board to validate. Although the process is often shorter when the committee presents a single candidate for recommendation, a more time-consuming, consensus-driven approach often yields better long-term results. The report also notes that in many situations, the human resources (HR) function may not be deeply involved in CEO succession. In these cases, it may be time for organizations to revisit this approach, especially if the HR leader brings previous expertise that can contribute to the process.
Develop a forward-looking CEO specification. To go beyond generalities, the board should identify the very specific effect it wants the next CEO to have on the business and define the skills that it will take to accomplish that. For a poorly performing company where strategy is the primary contributor to lackluster returns, the board will have to consider whether to tap a turnaround specialist from outside the company. Even a company that has delivered consistently high returns versus industry peers must evaluate how it will continue to outperform, but also find ways to innovate, drive distinctiveness and avoid the complacency that can come with success. While expectations for the CEO must be appropriately high altitude, no more than five to six competencies should be included — beyond that, the assessment of prospective candidates can become too detailed and detract from the critical requirements.
Think creatively about candidates. When identifying candidates, be prepared to challenge traditional assumptions. The committee will have to reflect carefully on the range and depth of the company’s likely internal succession candidates — and consider whether changes in strategy, the nature of competition or customer behavior suggest the need to look at a wider group of candidates both inside and outside the company. In addition, if there are internal prospects to be considered, it can be helpful to assign a board director to help them navigate the process while continuing to contribute at the highest levels in their current roles.
The Spencer Stuart report concluded that when identifying candidates, be prepared to challenge traditional assumptions. Here is what the study suggests:
Do not underestimate cultural fit. Boards will want to consider whether the culture of the company needs to shift or change, and how aligned individual candidate profiles are with the desired company culture. Prior to having the candidates evaluated by experts in executive assessment and organizational culture alignment, the committee members should spend additional time with the candidates in different settings in order to begin to gauge their cultural fit. Executives who are hired solely for their technical skills can fail if they do not align with the culture.
Understand the full picture. A rigorous review of an individual’s capabilities, including the observations of others who can validate their performance in current and past roles, can reveal whether candidates have the relevant experience as well as potential areas for development. Gaps may include a lack of specific knowledge or “hard skills,” such as experience with regulators or financiers, or a deficiency in certain “soft skills,” e.g., the ability to navigate complex interactions or to influence and motivate others. Gaining insight into external talent — through research, informal or formal introductions, or an executive search — can provide additional benchmarks when assessing the readiness of potential successors.
And, of course, it is not enough to look at past accomplishments; boards should strive to gain an understanding of candidates’ analytical capabilities, social intelligence and self-awareness — all skills that speak to an individual’s executive intelligence and ability to succeed in more complex and demanding contexts.
“There is nothing better than to see a CEO engage the organization at both the board and enterprise level, challenging the status quo and driving both EBIT and marketshare,” said Brian Clarke, managing partner of Kensington International — a provider of executive search, leadership development & coaching, and outplacement & transition services. “We have seen revised commercial and operating strategies – when combined with the infusion of new energy and direction coming from a new CEO – moving the needle virtually overnight.”
Years of data and experience have demonstrated the predictive power of these traits on executive performance — and their link to the performance of the business. Although some organizations evaluate candidates based on personality testing, there is no clear correlation between personality and performance.
With the high cost of failure — and the significant financial, reputational and talent impact of the right decision — boards need to reassess their CEO succession processes and ensure that they are supporting their strategic goals. In addition to the potential damage to the organization, a poor decision in successor can also jeopardize a director’s standing.
“We’ve seen numerous boards hire the wrong CEO, either during a pivot or a turnaround, and the results have been disastrous,” said Rod McDermott, managing partner at McDermott & Bull– an executive search and interim leadership provider. The firm was designated as the fastest growing recruiting outfit among its Top 50 rivals by Hunt Scanlon Media this past spring. “Not only are time and financial resources squandered, companies often lose key talent who are disenfranchised by the wrong CEO.” More often than not, he added, “the wrong CEO brings a cultural perspective that is not aligned with company values – spending money lavishly on executive perks, self-dealing, creating a closed-door mindset, or alienating key customers and vendors.” In these cases, he said, great people see the writing on the wall and will often leave before watching the company flounder and ultimately fail.
While there can be immense pressure to make a decision quickly, the board must resist that urge and take the time necessary to make a fully informed decision. In addition, it’s important to remember that succession is rarely a neat process and the committee and chair need to have realistic expectations. Those who do not invest in developing strong selection processes well in advance of CEO succession risk paying heavily later.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media
“Imaging technique can see you think”
By significantly increasing the speed of functional MRI (fMRI), researchers funded by the National Institute of Biomedical Imaging and Bioengineering (NIBIB) have been able to image rapidly fluctuating brain activity during human thought. fMRI measures changes in blood oxygenation, which were previously thought to be too slow to detect the subtle neuronal activity associated with higher order brain functions. The new discovery that fast fMRI can detect rapid brain oscillations is a significant step towards realizing a central goal of neuroscience research: mapping the brain networks responsible for human cognitive functions such as perception, attention, and awareness.
“A critical aim of the President’s BRAIN Initiative is to move neuroscience into a new realm where we can identify and track functioning neural networks non-invasively,” explains Guoying Liu, Ph.D., Director of the NIBIB program in Magnetic Resonance Imaging. “This work demonstrates the potential of fMRI for mapping healthy neural networks as well as those that may contribute to neurological diseases such as dementia and other mental health disorders, which are significant national and global health problems.”
fMRI works by detecting local increases in oxygen as blood is delivered to a working part of the brain. The technique has been instrumental for identifying which areas in the brain control functions such as vision, hearing, or touch. However, standard fMRI can only detect the blood flow coming to replenish an area of the brain several seconds after it has performed a function. It was generally accepted that this was the limit of what could be detected by fMRI — identification of a region in the brain that had responded to a large stimulus, such as a continuous 30 second “blast” of bright light.
Combining several new techniques, Jonathan R. Polimeni, Ph.D., senior author of the study, and his colleagues at Harvard’s Athinoula A. Martinos Center for Biomedical Imaging, applied fast fMRI in an effort to track neuronal networks that control human thought processes, and found that they could now measure rapidly oscillating brain activity. The results of this groundbreaking work are reported in the October 2016 issue of the Proceedings of the National Academy of Sciences.
The researchers used fast fMRI in human volunteers observing a rapidly fluctuating checkerboard pattern. The fast fMRI was able to detect the subtle and very rapid oscillations in cerebral blood flow in the brain’s visual cortex as the volunteers observed the changing pattern.
“The oscillating checkerboard pattern is a more “naturalistic” stimulus, in that its timing is similar to the very subtle neural oscillations made during normal thought processes,” explains Polimeni. “The fast fMRI detects the induced neural oscillations that allow the brain to understand what the eye is observing — the changing checkerboard pattern. These subtle oscillations were completely undetectable with standard fMRI. This exciting result opens the possibility of using fast fMRI to image neural networks as they guide the process of human thought.”
One such possibility is suggested by first author of the study Laura D. Lewis, Ph.D. “This technique now gives us a method for obtaining much more detailed information about the complex brain activity that takes place during sleep, as well as other dynamic switches in brain states, such as when under anesthesia and during hallucinations.”
Concludes Polimeni, “It had always been thought that fMRI had the potential to play a major role in these types of studies. Meaningful progress in cognitive neuroscience depends on mapping patterns of brain activity, which are constantly and rapidly changing with every experience we have. Thus, we are extremely excited to see our work contribute significantly to achieving this goal.”
“Activity trackers can work when paired with wellness coaching”
With the holiday shopping season upon us and a new year just around the corner, many people will begin looking for ways to move more and eat less. Some of those people will turn to activity trackers to help them achieve their goals.
While critics have debated the effectiveness of activity trackers, a recent study by faculty in the IU School of Public Health-Bloomington found activity trackers can work, if paired with wellness coaching. The study was published in the American College of Sports Medicine’s Health and Fitness Journal.
“There is a lot of information out there about people not using activity trackers, but we think that is because the people using them need support,” said Carol Kennedy-Armbruster, senior lecturer in the Department of Kinesiology at the IU School of Public Health-Bloomington and co-author of the study. “We found that a combination of giving someone the device and then pairing them with someone who can help them learn how to use it actually works.”
The study, co-authored by Brian Kiessling, associate instructor and Ph.D. student within the Recreation, Parks and Tourism Department at the IU School of Public Health-Bloomington, focused on how people regard activity trackers, how the trackers affect behavior, and how they can be effectively integrated into programs that help people increase movement in their lives.
Kennedy-Armbruster and Kiessling used two years’ worth of data collected from IU’s Ready to Move program, which pairs students with IU employees. The student/employee teams meet a minimum of eight times during a 10-week period for coaching sessions, and participants are given a Fitbit to help track their movement.
Over the two-year span, 173 IU employees participated — 152 women and 21 men. Coaches focused, in part, on how activity trackers affected participants’ behaviors in combination with student coaching.
Throughout each 10-week period, the student coaches helped participants establish a baseline number for the amount of steps they would like to achieve in a day. Participants then tracked their movement using a Fitbit, gradually increasing their goals and therefore their movement throughout the day. According to a pre-program survey, 83 percent of participants had used a tracking device before, most using a pedometer. In that survey, participants said they believed an activity tracker could help serve as a motivator and reminder to move.
At the end of the 10 weeks, participants said the activity trackers did serve as a reminder and motivator and were easy to use. Ninety-three percent of participants also agreed that working with a student coach helped them develop effective health and fitness goals, and 90 percent agreed that a combination of that coaching and a fitness tracker helped them sustain their health goals after coaching ended.
By combining coaching with the device, Kiessling said many employees were able to view movement outside the traditional idea of exercise involving a gym, strenuous cardio and weight lifting. The trackers allowed them to visibly see how everyday movement counts, which resulted in employees finding creative ways to take additional movement breaks throughout the day.
“We relieved a lot of stress for people,” Kiessling said. “Participants would say ‘I drive by that fitness center every day and I feel bad.’ But this program helped them realize they can do this on their own during the day. It opened up a whole new way of thinking about movement. The activity tracker, in combination with the support from their coaches, really made that possible.”
“4 Ways to Build Talent Pipelines of the Future”
While strong job growth is a good sign for the U.S. economy as a whole, it presents certain challenges for employers and HR professionals. According to the just-released iCIMS ‘U.S. Hiring Trends’ report, employers are having difficulty attracting suitable candidates. Jobs are becoming harder to fill, requiring more time and money to hire best-fit talent.
“In today’s tight labor market, employers need to think about how best to leverage their employees as rigorously as they do their other resources,” said iCIMS chief economist, Josh Wright. “They should weigh the costs of traditional hiring practices versus building out their talent pipelines. Our data suggests employers should consider the latter more closely.”
iCIMS’ data suggests that employers having difficulty filling positions with qualified candidates should invest in their talent pipelines by fostering relationships with passive candidates and interns, as well as by developing an effective employee referral program. Medium and large businesses, apparently recognizing the value of an internship program, have been able to convert interns into full time hires. Not surprisingly, small businesses struggle here.
“Technology is advancing rapidly, transforming the workplace and how employees engage with employers,” said Mr. Wright. “These rapid changes are evident in debates about skills gap in the labor force and the impact these have on the labor market. Employers across all industries and company sizes need to examine their operations and search for opportunities to nurture their own pools of talent.”
Companies struggling to fill positions quickly with qualified candidates need to invest in their talent pipelines and build relationships with potential candidates. iCIMS offers four ways employers can build talent pipelines for future hiring needs.
1. Grow Your Company from the Intern Up
Many companies recognize internships as one of the most effective recruiting tools because they provide a relatively secure source of entry-level hires. Interns have already demonstrated their skill, dedication, and ability to fit into the company culture; furthermore they have received some level of grooming or at least exposure to the work of the company. According to a study by the National Association of Colleges and Employers, approximately 71 percent of employers plan to transition interns into full-time employees, and 63 percent of companies would like to hire interns for entry-level positions.
Unsurprisingly, small businesses’ use of internships lags behind medium and large companies, in terms of both the average time it takes to fill a position and the size of the internship program relative to overall hiring. Medium and large businesses appear to be doing a better job at building talent pipelines for internship programs: their internship programs are larger relative to their overall hiring programs.
More surprisingly, the relative size of the largest enterprise companies’ internship programs more closely resembles that of small businesses. The relative composition of their total hiring may play a role here, as well, but some enterprise companies may be at risk for coasting on their brand names.
2. Don’t Forget Passive Candidates
Strong talent pools of passive candidates ensure that a company always has a pipeline of talented and qualified candidates to select from when a job becomes available. Passive candidates are the people that are willing to entertain a job offer but are not actively looking for a new position. According to another recent iCIMS survey, 78 percent of respondents would be open to a new career opportunity if contacted by a recruiter with a relevant opportunity, even if they weren’t actively seeking a new job.
Sending automated personalized, branded communications based on what talent pool they belong to makes passive candidates more likely to think of that organization when ready to apply to a job. Automating this process with a recruitment marketing automation tool enables employers to maintain a constant pool of warm candidates, reducing cost per hire and time to fill.
3. Diversify Your Recruitment Marketing Tools
One of the most important parts of building a talent pipeline is expanding candidate reach. In order to make an organization more visible, employers should regularly leverage multiple channels to discover which sources are most effective. Employers can make open positions easy to discover by advertising where candidates are looking. This includes job boards, social media, and ensuring that open jobs ranked favorably on search engines like Google.
Dedicated talent acquisition technology helps companies more effectively build candidate pipelines with automation and ease. Companies of all sizes can explore and test candidate outreach channels to attract more candidates and reduce their time to fill. Employers should partner with a technology provider that allows for a seamless flow of information from multiple vendors into a single talent acquisition system of record.
4. Increase Your Odds — Encourage Employee Referrals
According to iCIMS, on average, 24 percent of new hires originate from a referral, but some companies see rates of nearly 40 percent. Larger companies with 1,000 employees or more tend to hire more referred employees (27 percent) compared to smaller companies (14 percent). This divergence is likely due to the fact that 69 percent of large companies have a documented referral process compared to 46 percent of smaller companies.
Part of the reason employee referrals are considered so successful by employers is due to the fact that they are effective at bringing talent that easily fits into a company’s existing culture. By capitalizing on employee networks, companies can enhance their ability to compete for talent.
The lack of available or qualified candidates could be pointing to a skills gap. According to the Aberdeen Group, 80 percent of employers believe that the skills gap is a hindrance for any organization looking to recruit employees. Aberdeen found that the hardest skills to find in candidates include a mix of both soft and hard skills.
Calculating the impact of this problem on either the economy as a whole or individual employers is difficult, but few doubt that unfilled positions come at a steep cost. When the right talent can’t be found, lost profit and revenue can be as high as $23,000 per unfilled position, according to the U.S. Chamber of Commerce Foundation.
Inadequate Talent Supply
Numerous reports continue to come out citing that lack of quality talent is an issue among companies despite a large amount of people seeking new employment opportunities.
Forty percent of employers are experiencing difficulties filling roles, marking the highest level since 2007, according to the latest ‘Talent Shortage Survey’ released by ManpowerGroup.
The report noted that as skills needs change rapidly, employers are looking inside their organizations for solutions, with more than half choosing to develop and train their own people. This represents a significant jump from ManpowerGroup’s 2015 survey, when just 20 percent prioritized training and development to fill roles or find new skills. In the U.S. IT sector, businesses are reporting the most marked talent shortage in a number of years. IT roles jumped from ninth to second place this year, the most marked demand for IT in a decade.
The inadequate supply of qualified and skilled talent is the second biggest threat to U.S. companies’ ability to meet revenue or business performance targets, second only to “increased competitive pressures,” concluded a recent Randstad ‘U.S. Workplace Trends’ report. Nearly eight-in-10 hiring decision makers (79 percent) agree that when positions become available at their organization, they struggle to find people whose skills match the job requirements.
Ninety five percent of recruiters expect finding new talent to be as or more challenging in 2017 as this year, according to the latest ‘Recruiter Nation Survey’ conducted by Jobvite. Corporate recruiters cited a lack of skilled candidates (65 percent) and dealing with hiring managers moving candidates through the hiring process (48 percent) as their biggest challenges. Recruiters expect competition for talent to be in the most demand within hospitality (87 percent), manufacturing (79 percent) and healthcare (78 percent).
Job creation has been “steadily increasing” ever since the recession, “forcing corporate recruiters to double up their efforts to fill positions with quality candidates,” said Dan Finnigan, chief executive officer of Jobvite. “But there simply aren’t enough educated, talented and qualified candidates to keep up with the demand.” As a result, he says, “these recruiters must now go above and beyond by helping to create compelling employer brands and an exceptional candidate experience to keep their clients happy.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media