More U.S. Companies Having Difficulty Attracting Critical-Skill Employees
Oct. 10, 2011 — With the U.S. economy still unsteady, most U.S. companies are finding it relatively easy to attract or retain workers, with one major exception — critical-skill employees. A new survey from Towers Watson and WorldatWork shows that for the second consecutive year, the number of U.S. companies having difficulty finding and keeping critical-skill workers has increased.
The Towers Watson Talent Management and Rewards Survey, a study of 316 North American companies, including 218 from the United States, also found that nearly two-thirds of respondents expect their employees to work more hours now than they did prior to the recession and see this trend continuing for some time. Additionally, respondents are concerned about the impact that organizational changes they made in response to the recession are having in areas such as employees' work-life balance, productivity and willingness to take risks. Most companies have already made or are planning to make additional changes to their reward and talent management, and other organizational, programs.
According to the survey, nearly six out of 10 U.S. companies (59%) reported problems attracting critical-skill employees this year. That is an increase from 52% last year and 28% in 2009. Forty-two percent also reported difficulty attracting top-performing employees. Additionally, more than one-third (36%) reported difficulty retaining critical-skill employees, an increase from 31% last year and 16% in 2009. Overall, only one in 10 companies is having difficulty attracting or retaining employees generally.
"Companies are taking longer to fill these positions, and more of them are open," said Laura Sejen, global head of rewards consulting at Towers Watson. "There is clearly a greater-than-normal mismatch between the skills employers seek and those that are available in the marketplace. In short, despite the overall weakness in the job market, companies need a more appealing offering to attract critical-skill employees."
Employees Working More Hours
Nearly two-thirds (65%) of U.S. respondents report that employees have been working more hours over the past three years, and more than half (53%) expect this trend to continue over the next three years. Additionally, about one in three (31%) companies said their employees have been using less of their vacation or personal time off over the past three years.
The survey also found that more than half (56%) of U.S. companies are concerned about the long-term effects that changes they made during the recession will have on their employees’ ability to maintain a healthy balance between work and their personal lives. And more U.S. employers are becoming concerned about employee productivity (39%) and their employees' willingness to take risks (37%). As a result, almost two-thirds (66%) of respondents have made significant changes in the HR area — reward and talent management strategies, organizational structure, job evaluation process and competencies — and many expect to continue to do so.
"In the short run, having employees work extra hours can increase productivity, but in the long run, extended hours can negatively affect employee well-being and retention," said Laurie Bienstock, North America leader of rewards consulting at Towers Watson. "Employees at many organizations are already suffering from change fatigue. As a result, when the labor market does recover, companies can expect a sharp increase in voluntary turnover, especially if they do not address employee concerns, and deliver reward and talent management programs more effectively."
"Employees generally don't mind doing more with less especially when economic conditions are tough," said Ryan Johnson, CCP, vice president of research for WorldatWork. "But when this drags into multiple years, and they start to hear anecdotes of recovery, they become less understanding. At that point, the entire employee value proposition is crucial to retention."
Thank you for the reminder about these key issues.
Despite the weak economy and 9%+ unemployment, many companies still struggle to attract critical and "hot" skills talent, especially in industries where intellectual capital is more important than physical assets, such as technology, engineering-oriented firms, life science companies, etc. Seeing this as an ongoing issue in today's knowledge industries, I wrote an article for Workspan that addressed some of the many issues in pricing and compensating these key employee groups.
The article "Overcoming the Obsticles: Market Pricing and Compensating Hot and Critcal Skills, was published January 2009 in Workspan and is available via the WorldatWork website.