6 Ways to Prepare for the 2013 Talent Crunch
The temporary staffing market is expected to exceed its historical high next year according to Staffing Industry Analysts, as companies continue to rely on contingent workers as the economy remains slow – and this will see employers hire greater numbers of contract workers than we have ever seen before.
The Staffing Industry Analysts’ report forecasts 9 percent industry growth and 6 percent industry growth in 2013 with the sectors of industrial, IT engineering and locum tenens staffing heading for all time peaks in demand. The increase in job demand for temporary doctors is of some note as demand will be at 128 percent of historical highs as it is with IT and engineering/design professionals with demand hitting 116 percent and 111 percent of historical highs, respectively. Conversely, areas such as office/clerical, finance and legal are forecast to see reduced demand in 2013.
So, IT, engineering, medical, and other hot sectors may be facing a talent crunch in 2013, that is if the increased demand for temporary staff is not met with a ready supply of available temporary talent. This also means that we can expect to see increases in both starting salaries and time to hire in these areas, which could of course have a negative impact on company productivity and profit levels.
These indicators suggest that employers in certain identified sectors should be begin to prepare their businesses for the prospect of it becoming increasingly hard to source temporary talent over the coming year – and below I have suggested some ways that recruiters may re-orientate their business to this end.
1. Conduct Gap Analysis Of Market Rate and Internal Pay Levels
Do you have up-to-the-minute data of current and predicted market pay levels in your sector? Is there a gap between what you are paying and the current market and is this gap expected to widen over the next year, meaning that you are on a path towards increasingly less competitive salaries? What will this mean for your time to hire statistics? Do you expect them to increase and raise empty desk times and reduce output? This gap analysis can help to form the basis of your reactive hiring strategy to the potential temporary sector talent crunch in 2013.
2. Secure Increased Payroll Budget
Having understood the potential impact of a talent crunch in your sector, it’s time to convert the data into action with a ‘what if’ analysis. What will be the potential loss to the business in terms of reduced productivity from lengthened time to hire? How much will it cost the business to reduce the potential salary gap both now and through 2013? These two pieces of information should form the basis of your justification that you can take to your FD (or the powers that be), to persuade them to raise your salary budgets so you can respond as necessary to upward salary pressures.
3. Conduct Stay Interviews To Sure Up The Business And Keep Existing Talent
Now is the perfect time to begin conducting stay interviews with both your permanent staff and contingent labor body so you can take a pulse and assess the engagement levels of your team and find out what’s keeping them here and if there any risk factors that may be pushing people to leave. You can use your findings to address any staff disharmony (which may include pay raises) in order to ensure that you retain all your current staff, because if you lose staff, it will only exacerbate any talent crunch in 2013.
4. Track The End Dates Of Existing Contracts
This may sound obvious, but I have worked in many small business that do not have a good enough system for tracking the end date of current contingent labor contracts, meaning that contracts can run dangerously close to the end date, before the employer realizes, often leaving them with a tough and awkward negotiation to extend the contract, since the contractor may be looking elsewhere or even be committed elsewhere.
So, make sure to use a HRIS or simply Outlook reminders to monitor all contract end dates and to ensure that key people are sent multiple reminders well in advance of the contract end date so there is time to take action. This will allow you to more effectively retain staff during any potential talent crunch.
5. Consider Retention Bonuses
Consider building and introducing retention bonuses on all your temporary contracts, e.g the contractor gets a lump sum at the end of the contract (this could even be a renewal bonus). This does not have to cost that much more as you can simply back-load, e.g. offer a slightly reduced starting salary to fund the business. Its just a case of distributing the money differently to create an incentive for contingent labor to stay full term and renew if necessary. This is also another way to raise retention levels during the talent crunch.
6. Engage With Passive Contingent Talent
Begin to open the dialogue with contingent labor that you may be interested in. You can engage with passive talent by developing a talent community and/or all by blogging intelligently and on issues that matter to contingent labor such as tax, getting the next contract, coming to the end of your contract, finding the next contract, and adjusting to new teams. This should increase the level of speculative inquiries that you receive from contingent labor and enable you to build a social following of contingent labor that you can reach out to when times are hard.
Of course, no one knows what 2013 will actually bring, but we can only work on what the data is suggesting, which is that there may be a talent crunch in specific temporary staffing areas. And by following some of these steps I have set out you can prepare your business to weather the storm and minimize empty desks throughout next year.