The much-anticipated post-pandemic economic recovery has hit a dangerous roadblock: a global skills shortage. Desperate for staff, some employers are softening their hiring criteria to make up the numbers they need to continue operating their businesses.
But I don’t believe there are any market conditions under which employers should compromise their talent standards.
You may think I’m naïve or out of touch. I get it. You need staff right now. But the decision to lower your standards will come back to bite you. Here’s why.
The Skills Shortage Is Threatening Economic Recovery
In June 2021, the US Chamber of Commerce found there are 1.4 available workers for every open job today — half the historical average of 2.8 over the past 20 years. In the hardest-hit sectors (health services, education, and professional and business services), there are more open jobs than workers to fill them.
Suzanne Clark, president and CEO of the Chamber, called the shortage a “national economic emergency [that] poses an imminent threat to America’s great resurgence.” The causes of current worker shortages are hotly debated and may include low wages, border closures impacting migrant workers, and the mass movement out of cities.
Don’t Lower Your Standards — It’s a Trap
Trying to close talent gaps by hiring permanent employees who are not up to your normal standards — and failing to develop them — will impact productivity, disrupt your culture, and drag down your high performers. For example, if you’re putting someone in a customer-facing role, they need to be a good ambassador for your company. If not, you’ll end up paying for this mistake several times over.
On the other hand, implementing a hiring freeze can be dangerous. You don’t know when the labor market will recover, you need these roles filled, and your competition is hiring in the meantime.
So, what’s the solution?
Address Short-Term Gaps With Short-Term Talent Solutions
Although it may be more expensive, hiring contingent or temporary labor is a much better idea than hiring low-quality permanent employees during a skills shortage.
Contingent labor provides you with surge capacity and can be scaled up and down to meet changing demand with ease. Similarly, you may want to bolster your teams by outsourcing certain processes.
However, contingent labor isn’t a silver bullet. It, too, is affected by the skills shortage. While finding quality contingent labor may be easier than finding quality full-time employees, the market is still competitive.
If you choose this approach, be sure to think about the core capabilities you want to develop internally and the non-core processes you can outsource or cover with temporary solutions. The goal should be to own your core capabilities and build that muscle in-house.
Develop Existing Talent
Think differently about job requirements. Instead of advertising for people with specific skill sets, hire people with high potential who are hungry for a career in your field. Then, help them develop the skills your company needs through a formal program, like the Starbucks College Achievement Plan.
Obviously, this approach requires time and is best suited for large organizations that can afford to adopt a longer-term strategy. But there’s no real downside. Developing your people increases loyalty and provides a talent pipeline that will pay for itself by reducing your recruitment costs. Even if the skills shortage were to end suddenly, you’d be left with an abundance of highly trained and engaged workers. You win either way.
Widen Your Talent Pool
If you’re still not a fan of remote work, the skills shortage should get you over the line. If you embrace remote work, you don’t need to fish in the same narrow pond as your competitors. Instead, you can widen the net and hire candidates from across the globe.
A broader talent pool means more choices and a more plentiful supply of high-quality candidates. But be warned: You aren’t the only company hiring remotely. You will need to take some steps to make your company attractive to remote employees, including showcasing your benefits and building your digital employer brand.
Make Your Company an Attractive Place to Work
Whether you’re recruiting remotely or not, attracting top talent during a skills shortage means you need to get competitive. Your jobs need to stand out from all the other open roles on the market. Here are a few simple ways to do that:
• Raise wages: A skills shortage means that candidates have more options. People may have been lining up to work for the minimum wage in the past, but now they don’t have to. Minimum-wage employers in the US are screaming about the skills shortage, but guess what? Companies that offer higher wages aren’t struggling as much.
• Get flexible: Offering flexibility means more than grudgingly letting employees work from home two days per week. Flexibility can take many enticing forms, including generous parental leave and letting people set their own hours.
• Offer dignity: Whether someone is an IT manager or a janitor, dignity matters. You can offer your employments dignity through benefits, financial security, and access to continuing education.
• Build a sense of purpose: People like to be part of something, working together toward a common goal. And it doesn’t need to be a massive goal like getting to Mars or curing cancer. If candidates see that your company gives them a chance to join a shared mission, they’ll be interested.
Don’t make rash hiring decisions just to fill vacancies. Take a step back and consider your options. Perhaps you can hire contingent labor, develop existing talent, widen your talent pool, and increase your competitiveness by improving your employee value proposition.
No matter which approach you take, you don’t need to lower your hiring standards during a skills shortage. That’s a short-term solution with long-term consequences.
Omer Molad is the cofounder and CEO of Vervoe.
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