Competition for talent is still one of the biggest challenges that companies face as we roll into the latter half of 2023. Today’s workforce is shaped by changing demographics, technological advancements, psychographic desires, and behavioral factors.
These are several elements that impact today’s workforce:
- By 2039, minority groups will represent the majority of U.S. workers.
- The steadily increasing dominance by women in educational attainment (2:1 female/male ratio in four-year degrees by 2028) will be culturally transformational.
- There has been a shift from “emergency remote” to “sustainable hybrid” work locations in post-Covid period. More than 60% of knowledge workers are demanding a remote or hybrid work environment.
- Artificial Intelligence is enhancing and eliminating jobs at all skills levels.
- The self-sorting of states and larger metro regions into two vastly different social policy groupings (“Red” and “Blue”) are impacting employers’ recruitment efforts as Millennials and Gen Z workers choose to work and live in areas aligned with their social values.
- Pandemic job losses have been recovered, with positions requiring higher education levels above, less educated below pre-Covid levels.
- Talent (acquisition, retention, development, and redevelopment) and change management are identified as the top two elements required by CEOs to create successful enterprises.
- Workplace diversity, equity, and belonging is a “must have” for Millennial and Gen Z generations.
- Compliance has increased in importance due to multi-state scale of projects and regularly changing federal and state procurement regulations.
The trend for a tight labor market continues. Yes, we’re seeing improvements in certain areas. The Department of Labor announced there were 330,000 new jobs in May, and the unemployment rate was at 3.7%. However, the quest for talent remains challenging. Open positions or positions where a mis-hire occurred are painful and costly. If you’ve ever wondered how much an open position or “bad hire” costs your company, here’s some research:
- Open positions leave a big hole. CareerBuilder estimates that “employers lose more than $14,000 on average for every job that stays vacant for three months or longer.” This cost can be upwards of $25,000 for more advanced positions.
- Hasty decisions may lead to bad hires. The estimated cost of a mis-hired worker can be anywhere from six to 27 times the amount of the person’s actual pay, depending on their role and responsibility level.
- Filling roles isn’t as easy as it looks. The average mid-sized company in the U.S. works with 12 staffing vendors. The average staffing agency markup for temporary employees can range anywhere from 25% to 100%.
Faced with these and other challenges, many organizations’ bottom lines are suffering as they diligently work to fill roles with workers who are a good fit for the position and the company.
It may be time to look to a different solution to augment your hiring process:
- Consider direct sourcing. This is a community of pre-identified workers who are highly engaged. Direct sourcing reduces time to fill as the candidates are already familiar with your company. They are curated and pre-screened at detail-level to eliminate mis-hires. This results in a lower likelihood of unplanned attrition. Once they are off assignment, their availability status in the community changes so your company can quickly and easily engage them. This means the worker hits the ground running.
- Compare direct sourcing and traditional staffing agency costs by assessing cost-per-hire by department and role. Divide the overall recruiting expenditures by the number of hires made over a defined period. For example, over the past 12 months nextSource has reduced its own cost-per-hire by approximately 20% after implementing a direct sourcing solution.