Are you considering the wider impact of the skills shortage?

Hiring isn’t easy. It’s time intensive, but it’s high-value work. If you spend the time to hire the right people, your business will grow.

I am not professing to be a business guru, but I have been exposed to enough podcasts, books, and real-life experiences to form an opinion.

The leaders who have hiring on their priority list, who give HR and recruitment a seat at the table, are the ones who grow most sustainably.

Businesses often stop at ‘it’s hard to hire’ and don’t dig much deeper into how these skill shortages impact their business – not just from a retention standpoint, but also from an output, profitability, and growth perspective.

The Open University recently released the results of an NI business survey. It noted that 83% of organisations agree they are currently facing skills shortages.

The survey went on to show that 75% of organisations found that these skills shortages had caused an increase in workload for other staff. This increased pressure on your existing teams creates a vicious circle – you lose a key player, pressure increases on the existing team, they become unhappy and leave, and you’re left with an even bigger gap in your talent pool. And so, it continues. 

If your team members are consistently under extra pressure without reward or recognition, they will inevitably seek a role that pays them their worth. It exacerbates the challenges with recruitment because it means that instead of hiring for growth, you’ll be hiring to replace lost talent.

More worryingly, the survey also found that 82% of businesses had experienced reduced output, profitability, or growth. Of course, this is not all because of the skills shortage – inflation is also a contributory factor. The cost of business is going up, so it’s normal for this to impact your bottom line. But while it can’t all be attributed to the skills shortage, it does have a big part to play. When you don’t have a team with the right skills, it takes a lot longer to get a lot less done, having a knock-on effect on your profit and output. 

These stats highlight that it is more important than ever for businesses to start managing their talent effectively if they hope to grow. Businesses need to be intentional in how they are forecasting, attracting, and retaining their talent.

The first step in tackling these issues would be diagnosing any existing challenges through stay interviews or similar techniques and starting to map your existing talent to identify skills gaps. These exercises will give you a real-time view of the situation, allowing you to deal with these problems before it is too late. 

Once you are clear on your current position, it is time to review your employer brand. How do you attract the best talent to join your business? What is your market reputation? What makes you different from other employers? Speaking with people who have interviewed or been offered roles but have not taken them is a good starting point – their feedback will help you build a deeper understanding of the perception of your business.

By looking both inwards and outwards, you build a picture of where the challenges lie in attracting and retaining the skills your business needs to succeed. However, it is worth noting that even once you have identified areas you could improve, there is no overnight fix – it takes time to establish trust within your teams and the wider market, but those businesses that have adopted this approach earlier in the game, are the ones who are reaping the benefits in a tight talent market. 

Tackling the skills shortage

It’s a bit of a juggling act and does require investment, but there are some ways to mitigate the impact of skills shortages on your business:

• Develop your talent – while this takes time, it will pay dividends in the long run.
• Hire talent externally to fill the gaps – it’s easier said than done.

Addressing the pressures on your team

The main way to overcome this is by being proactive with succession planning, rewards, and recognition. Make sure your team feel like they are rewarded fairly and conduct “stay interviews” to ensure you have your finger on the pulse.

Protecting against reduced output, growth & profitability.

Having the right people, in the right seats, at the right time will help mitigate this. Businesses are all about teams – if you build a high-performing team with talented individuals with the required skills, experience, and behaviours, your business can buck the trend and grow.  

If you’d like some help with diagnostics, improvement plans or general recruitment & development of talent, get in touch for a no-obligation chat with one of our consultants.

Written by Michael Hewitt