It's ten years since ManpowerGroup conducted our first Talent Shortage Survey, and a great deal has changed. The world has experienced a global recession, an uneven recovery, and demographic, technological and economic shifts that have transformed the employment landscape.
We have seen the emergence of the Human Age, where talent is the new differentiator. Through all of this uncertainty, the one constant is that talent shortages continue unabated. From speaking to CEOs and business leaders across the 80 countries and territories in which we operate, I know talent shortages are something companies struggle with all over the world.
The working population is declining, forcing employers to select from shrinking talent pools. Technology is evolving faster than ever, changing the skills needed for jobs and shortening the life cycle of those skills. We are also seeing a bifurcation of the workforce — those with in-demand skills versus those with high-supply skills. Yet, too little has changed in these ten years.
The first step to addressing talent shortages is to make sure talent strategy is aligned with business strategy. The same old recruitment and workforce practices won't yield different results, so it is time to harness new people practices, and explore untapped talent pools. Employers need to foster a learning culture within their organizations and encourage employees to own their careers.
They need to promote their employee value proposition to position the company as a talent destination.
Businesses can no longer count on maintaining a sustainable competitive advantage over decades, but must be prepared to identify and achieve more transient competitive advantages. The ability to drive the speed and agility needed to succeed hinges on attracting, recruiting and managing talent, and organizing the workforce in ways that support the business strategy.
Here at ManpowerGroup, we're proud to work with clients around the globe to develop, source and retain the best talent for them through our strong and connected brands.
ManpowerGroup surveyed more than 41,700 hiring managers in 42 countries to identify the proportion of employers having difficulty filling positions, which jobs are difficult to fill, and why. Employers were also asked about the impact talent shortages have on their organizations and what steps they are taking to address them.
41,700 employers were asked:
How much difficulty are you having filling jobs due to lack of available talent?
Compared to last year at this time, how much difficulty are you having filling jobs?
What is the one job you are typically having the most difficulty filling?
What level of impact does this talent shortage have on your ability to meet client needs?
How are talent shortages/skills gaps impacting your organization?
Why are you having difficulty filling this specific job?
What strategies are you pursuing to overcome these difficulties?
The number of global employers reporting talent shortages in 2015 peaks at a seven-year high of 38%. Beyond the averages, 83% and 68% of employers in Japan and Peru respectively are struggling to fill jobs, compared to only 11% of Irish employers. The number of employers reporting talent shortages climbs most sharply in Singapore (to 40%), South Africa (31%), Romania (61%) and Greece (59%). In contrast, the number of Argentinian employers falls most significantly to 37%.
Skilled Trades positions are the jobs employers globally have the greatest difficulty filling for the fourth consecutive year, with Sales Representatives rising to second place. Last year's second and third-placed jobs, Engineers and Technicians, slip back to third and fourth respectively. The biggest climber in the global top 10 this year is Drivers, moving from 10th to fifth position.
The proportion of employers who say talent shortages impact their ability to serve client needs remains at the same level as 2014 (54%) reinforcing that not enough is changing to address talent shortages globally. More than one in five global employers is still not pursuing strategies to tackle talent shortages.
This report includes global, regional and country level data. For more details on talent shortages around the world, including an interactive data explorer tool, infographic, insight and blogs, visit manpowergroup.com/talentshortage
Talent Shortages are on the rise globally. The problem is most severe in Japan, Peru and Hong Kong
Worldwide, the percentage of employers who are experiencing difficulties filling job vacancies continues to rise in 2015. When compared with 2014, the proportion increases from 36% to 38%. This is the highest figure reported since before the global economic recession started in 2008: in 2007, 41% of employers were facing a talent shortage, falling to a low of 30% in 2009 (Figure 1).
Hiring managers report the most severe talent shortage in Japan (83%), as has been the case since 2010. Around two in three employers report difficulty filling jobs in both Peru (68%) and Hong Kong (65%), while talent shortages are an issue for 61% of employers in both Brazil and Romania.
A greater percentage of employers report talent shortages in 29 of the 42 countries and territories this year, when compared with 2014. The most notable increases are evident in Singapore (40%), South Africa (31%) and Romania (61%), where the proportions facing recruitment difficulties due to talent shortages climb by 30, 23 and 21 percentage points from 2014, respectively. Elsewhere, the proportion reporting talent shortages decreases in 12 countries, six of which are located in the Americas. The most notable declines of 26 and 12 percentage points are reported in Argentina (37%) and Panama (46%), respectively, while decreases of 11 percentage points are reported by employers in both Finland (22%) and Turkey (52%).
Nine of the 10 countries with the least severe talent shortage issues are located in Europe, the Middle East and Africa region (EMEA). As in 2014, the lowest level of difficulty filling jobs is reported in Ireland (11%), although this figure increases by 9 percentage points year-over-year. Elsewhere, talent shortages are an issue for just 14% in three countries – the Netherlands, Spain and the U.K. (Figure 2).
Globally, the hardest-to-fill jobs continue to be in skilled trades roles, followed this year by sales representatives
Across all 42 countries and territories as a whole, employers report that skilled trades vacancies are the hardest to fill, as was the case in each of the previous three years. However, the second hardest job to fill has changed from 2014, with the sales representative role rising up the list from fourth, meaning that the engineer category slips from second to third and the technician category from third to fourth this year.
Employers report considerably more difficulty recruiting drivers in 2015, with the category climbing the rankings from 10th to fifth, while the production/machine operator category is new to the top 10 this year, climbing from 12th to 10th. Moving in the other direction, the sales manager category slips out of the top 10 this year (Figure 3, Figure 4).
The level of difficulty faced by employers dealing with talent shortages has eased when compared with 2014
While the proportion of employers who face difficulties with recruiting due to talent shortage is increasing over time, the survey suggests that employers are not experiencing an increase in the level of difficulty. While 7% of employers globally report greater difficulty filling jobs than in 2014, 19% say they face less difficulty, while 63% believe the level of difficulty is unchanged (Figure 5).
Most employers who do have a talent shortage say there is an impact on client-facing relationships
As in 2014, more than half of those employers who are facing a talent shortage say it is having a high (20%) or medium (34%) impact on their ability to meet client needs. Only around one in five (21%) feel that talent shortages are not having any impact on client-facing activity (Figure 6).
Employers expect reduced competitiveness and more limited ability to serve clients if they can't hire all the talent they need
Among employers who feel that talent shortages are impacting their ability to meet client needs, the most likely consequences are expected to be a reduction in ability to serve clients (42%) and reduced competitiveness/productivity (42%). In addition, 30% expect an increase in employee turnover and 26% anticipate lower employee engagement and morale. One in four (25%) expects reduced innovation and creativity in their organization and the same proportion say talent shortages can lead to higher compensation costs (Figure 7).
Talent shortages worldwide continue to be driven by a lack of available applicants and a lack of technical competencies among those who are available
A lack of available applicants is the most common reason employers give to explain why they face difficulty filling jobs in 2015. More than one in three (35%) say this is an issue, up from 31% in 2014. The lack of candidates with the required technical competencies has a similar impact in terms of driving talent shortage, with 34% saying this is a reason why they can't fill jobs. The technical competencies employers are seeking include candidates who have industry-specific professional qualifications (16%) and those with industry-specific skilled trades certifications (13%).
More than one in five hiring managers (22%) say that lack of experience is behind talent shortages and 17% report a lack of workplace competencies. The most frequent soft skills deficits are lack of professionalism (6%) and lack of enthusiasm, motivation and a learning mindset (6%).
A further barrier for 13% of employers is candidates with salary expectations that exceed what is offered. In addition, 5% say that candidates don't want to work in the location where there are vacancies and 5% are struggling to fill jobs because the company, business sector or occupation has a poor image (Figure 8).
Developing the capabilities of existing staff, seeking out new recruitment channels and tapping into different labor pools are the most widely-used strategies for addressing talent shortages at the global level in 2015
In order to address talent shortages, hiring managers at the global level are most likely to be adopting new people practices (39%), although this proportion is down from 47% in 2014. More than one in five (22%) employers seeks to explore new talent sources in order to tackle the difficulties they face filling jobs, while 18% are implementing alternative work models (down from 23% last year) (Figure 9).
One in five employers (20%) at the global level are revising their people practices to provide more training and development for existing staff. Most commonly, this takes the form of training to develop new skills (13%) and training to enhance existing skills (12%). There is also a trend for utilizing non-traditional recruiting practices, both internally and externally to the organization, selected by 18% in 2015, compared to 13% in 2014 and 10% in 2013. Some employers are offering enhanced benefits (5%) and/or higher starting salaries (5%), while 5% are seeking to redefine qualifying criteria to include individuals who lack some required skills or qualifications but have the potential to acquire them.
With regard to seeking out new talent sources, 10% of employers are seeking to explore previously untapped talent pools, particularly candidates from outside their immediate region (3%) and young people (3%). Meanwhile, 8% of employers are appointing candidates who don't have the relevant skills at present but do have potential to learn and grow.
Employers who report implementing alternative work models to address talent shortages are most likely to be increasing focus on improving their talent pipeline (7%), although the proportion taking this approach is down from 10% in 2014 and 13% in 2013. One in 20 (5%) are redesigning existing work procedures, for example by sharing work assignments between different employees.
Click here to read the complete 2015 Talent Shortage Survey results, including regional overviews and country specific comparisons.