The Talent Shortage and High-Turnover Industries

talent acquisitionIn this age of low U.S. unemployment rates and increased talent competition, 54% of employers surveyed in Brandon Hall Group’s recent research believe there is a shortage of qualified talent in their industries. But to what extent is this belief prevalent among typically high-turnover industries (technology and software, retail, manufacturing, healthcare, and hospitality)? And can high-turnover industries teach us something in terms of managing a talent shortage?

Using Brandon Hall Group’s 2015 Talent Shortage/Hiring Practices study among 355 human capital management leaders, I decided to dig into a few data points to answer those questions. However, as a caveat, hiring practices are not the whole story about how to manage talent shortages. There are location-selection strategies, competitive moves, and other factors that can impact an organization’s ability to attract talent in a tight market, and those topics were not the focus of this study.

Feeling the Same Pain

To begin with, everyone seems to be feeling the same pain. The same percentage of respondents from high-turnover industries and remaining respondents (54%) believe there is a talent shortage.  However, a greater percentage of high-turnover respondents than other respondents report struggling to fill key roles because of the industry talent shortage (33% high turnover vs. 25% other). In addition, at least a quarter of the high-turnover (32%) and other (26%) respondents are not sure whether there is a talent shortage but agree it has gotten increasingly difficult to find, attract, engage, and hire high-quality candidates.

Both segments are experiencing the same hiring challenges: attracting talent (66% high-turnover, 62% other), building external talent pools (45% high-turnover, 46% other), and making competitive offers to top talent (38% high-turnover, 41% other).

What to Do?

So what is a company to do when faced with a shortage of qualified talent and a struggle to attract talent? How about targeting recruiting efforts for specific talent communities?   When comparing the two segments, more high-turnover respondents than other respondents make at least some effort to recruit from specific communities, such as millennials (67% high turnover vs. 56% other), university-based groups (86% high turnover vs. 75% other) , and military veterans (63% high turnover vs. 57% other). I find this surprising because most organizations could benefit from developing strategies to recruit from these talent populations. The millennial population, in particular, is plentiful in the U.S. Millennials (born between 1982 and 2000) represent more than one-quarter of the population and number 83.1 million (Source: U.S. Census, June 2015 press release).

How About Sourcing?

In terms of sourcing strategies, a greater percentage of high-turnover respondents than others invest time and resources on direct sourcing (78% high turnover vs. 65% other) and employee referral programs (75% high turnover vs. 62% other).  Employee referral programs are a highly effective way to recruit talent.  In fact, Brandon Hall Group’s 2015 Talent Acquisition Survey shows that, on average, all organizations fill about 17% of their job requisitions from employee referrals, which is the second highest percentage after general job boards, at 18%.

Biggest Impact

Looking to the future, the top responses for the three most-important changes an organization could make to improve their recruiting performance are:

  • Strengthening their employer brand (65% high-turnover vs. 55% other)
  • Updating and modernizing sourcing strategies (54% high turnover vs. 46% other)
  • Improving the onboarding process (48% high turnover vs. 45% other).

To me it is no surprise that strengthening an employer brand is the top response because conveying authentic messaging about an organization’s employer/employee relationship is very likely to attract quality talent that is aligned with the organization’s values, mission, and culture.

The bottom line is, most organizations are experiencing a shortage of quality talent and are struggling to attract talent. What distinguishes high-turnover industries from other industries is that a greater percentage of them make an effort to recruit from specific talent communities, especially millennials and veterans; utilize employee referral programs and direct sourcing; and place emphasis on their employer brand. These are strategies worth emulating.

Daria Friedman, Principal Analyst, Talent Acquisition, Brandon Hall Group

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Mike Cooke

Chief Executive Officer of Brandon Hall Group Mike Cooke Prior to joining Brandon Hall Group, Mike Cooke was the Chief Executive Officer and co-founder of AC Growth. Mike held leadership and executive positions for the majority of his career, at which he was responsible for steering sales and marketing teams to drive results and profitability. His background includes more than 15 years of experience in sales, marketing, management, and operations in the research, consulting, software and technology industries. Mike has extensive experience in sales, marketing and management having worked for several early high-growth emerging businesses and has implemented technology systems to support various critical sales, finance, marketing and client service functions. He is especially skilled in organizing the sales and service strategy to fully support a company’s growth strategy. The concept of growth was an absolute to Mike and a motivator in starting AC Growth, in order to help organizations achieve research driven results. Most recently, Mike was the VP and General Manager of Field Operations at Bersin & Associates, a global analyst and consulting services firm focused on all areas of enterprise learning, talent management and talent acquisition. Tasked with leading the company’s global expansion, Mike led all sales operations worldwide. During Mike’s tenure, the company has grown into a multi-national firm, conducting business in over 45 countries with over 4,500 multi-national organizations. Mike started his career at MicroVideo Learning Systems in 1992, eventually holding a senior management position and leading all corporate sales before founding Dynamic Minds. Mike was CEO and Co-Founder of Dynamic Minds, a custom developer of software programs, working with clients like Goldman Sachs, Prentice Hall, McGraw Hill and Merrill Lynch. Also, Mike worked for Oddcast, a leading provider of customer experience and marketing solutions, where he held a senior management position leading the company into new markets across various industries. Mike also serves on the Advisory Board for Carbon Solutions America, an independent sustainability consulting and carbon management firm that specializes in the design and implementation of greenhouse reduction and sustainability plans as well as managing the generation of carbon and renewal energy and energy efficiency credits. Mike attended University of Phoenix, studying Business Administration and Finance. He has also completed executive training at the Chicago Graduate School of Business in Chicago, IL.