Oh, how quickly a year goes. If you’re one of our loyal blog followers, you’ll remember reading our piece on staffing challenges for 2016. Some of those challenges are still in full force today, while new ones are starting to take hold.
Without further ado, here are 14 staffing challenges you’ll face during 2017. If you’d like instant help reducing staffing challenges, start using our small business applicant tracking system – Recruiteze. This free recruiting software can save you recruiting time and dollars.
The Top Staffing Challenges You’ll Face In 2017
- Building a talent pipeline for the future
While much of your emphasis might be on current hiring needs, you can’t afford to ignore the future. Not if you want to position your company for continued growth, at least. Meeting current hiring requirements can be struggle enough but building a forward-looking talent pipeline adds an extra concern.
Businesses need to define, attract, hire, retain and develop the right talent to ensure growth for the future. You cannot afford a short-term mentality here. Getting this right takes significant time investment. As a result, in 2017 HR professionals must invest more time into developing talent pipelines.
In 2017 HR professionals must invest more time into developing talent pipelines.
This process must start with smart analysis of existing talent, alongside awareness of shifting talent requirements. HR professionals must identify the gaps between current and needed talent, and develop a plan to fill those gaps. If we look at Oracle’s detailed 12-step methodology for building a talent pipeline, it’s clear that the time and effort investment is significant.
Only 10% of HR leaders feel comfortable with succession planning, according to Deloitte research, but it’s imperative that we don’t shy away from the challenge.
- Navigating the multi-generational workforce
For the first time ever, the workforce officially consists of five generations. The Traditionalists, the Baby Boomers, Generation X, Generation Y and Generation Z, working together. This presents extraordinary challenges to HR professionals in terms of engagement, retention and productivity. We must understand and embrace these differences in order to get the most out of our employees at every level of the business. This demands a new level of flexibility, to empower us to meet employees’ needs from across the generational divide.
For instance, consider work-life balance. Traditionalists and Baby Boomers are often characterised as “workaholics”, who value hard work and discipline to climb the career ladder. Compare that to studies showing that nearly half of Generation X considers work-life balance as a critical factor when choosing a role. Different values apply in many areas across the board, from communication style to motivation. If you’re interested in learning more, we’ve given a general overview of many of these areas here.
- Hiring Millennials
We might be working amongst five generations, but the largest of those generations is now the Millennials. Overtaking the Boomers – previously the largest generation in the workforce – last year, 1 in 3 American workers are now millennials. Learning how to attract, hire and retain this millennial generation presents a unique staffing challenge.
Read more: Hiring Millennials: What The Experts Say
Things like building an effective work-life balance, creating goal-led incentives and overhauling your rewards structure can go a long way. It’s also important to address areas such as training, and look at the career progress structure you have in place. HR professionals must also take care to address their ‘Big Questions’: who are we, who do we help, and why do we care? Millennials are generally attracted to organisations with purpose, and seek to engage in meaningful work. While things like rewards and progression are doubtless important, having a clear value proposition cannot be ignored.
With this in mind, our interviewing techniques must also improve. Putting out a strong message of who we are is only half the battle. We must also ensure we attract people who are a strong fit to that message. Cultural fit becomes ever more important, and with it we must embrace a more refined interview process.
- The continued growth of the freelance economy
More than 1 in 3 Americans work freelance, and that number is continuing to grow. Changing technologies make this possible, while changing attitudes value the freedom and accountability of freelance work. Equally, more support is available than ever, lowering the barriers to freelancing considerably. These things combined have led to the situation we have currently: the so-called gig economy.
Read more: The Freelance Economy: HR Implications
On the upside, the freelance economy has been shown to increase productivity and engagement. Businesses are able to be more agile than they’ve been before, hiring the talent they need, when they need it, without huge overheads. On the downside, any change presents a serious challenge. How we attract, manage and motivate freelance talent is very different, and if we don’t adapt we make ourselves noncompetitive.
- Countering poor workplace engagement
One of the reasons the freelance economy continues to grow is staggeringly poor engagement in the workplace. According to Gallup research, 70% of Americans are not engaged at work. Poor engagement costs the US economy around $370 billion annually – that’s a lot of lost productivity.
If the bottom line isn’t important enough, Gallup lists nine key performance outcomes that are impacted by employee engagement. High employee engagement results in:
- 21% higher productivity
- 22% higher profitability
- 37% lower absenteeism
- 28% less shrinkage
- 48% fewer safety incidents
- 41% fewer quality incidents (defects)
- 25% lower turnover in high-turnover organizations
- 65% lower turnover in low-turnover organizations
- 10% higher customer metrics
Clearly, this is something you want to be getting right. That’s easier said than done though. The Ping-Pong tables and beer fridge are only the tip of the iceberg, because real change to employee engagement starts much higher up the tree. It’s about embedding top-down cultural change that genuinely cares about employees.
- Overcoming sourcing difficulties
The Annual Manpower survey found back in 2015 that 1 in 3 US employers struggled to hire when they needed. That shows no signs of abating, as we continue to function in a candidate-driven hiring market. Sourcing pools are getting smaller – or at least, harder to navigate – and one of 2017’s major staffing challenges is to adapt to that. We must embrace creative recruiting strategies to help us maximise our sourcing effectiveness, and secure the talent we need.
We must widen our sourcing toolbox, to include methods such as group interviews, headhunting and advertising. Attending careers fairs is a good idea, and we should seek out referrals. We should consider video interviewing, and ensure our social media recruiting etiquette is up-to-date.
One area deserves special attention: content marketing. Content marketing is an outbound marketing strategy, which makes it perfect for attracting in candidates as part of a longer-term branding strategy. It’s easy, inexpensive, and increases credibility massively, and targets those hard-to-access passive candidates. However, knowing you should and actually doing it are two very different things. In 2017, HR professionals really need to embrace content marketing to it’s full extend – before they get left in the dust.
If you’ve still got a way to go, read our Complete Guide to Content Marketing for Recruiters and HR Folk. It’s in 3 parts, and it’ll tell you everything you need to know.
- Improving the Candidate Experience
As the hiring market continues to be increasingly competitive, the candidate experience we deliver takes on ever more importance. A great candidate experience allows you to hire better quality people, according to Lou Adler, and that has obvious implications.
One of the biggest staffing challenges facing HR professionals in 2017 is the need to improve the candidate experience during the hiring process – and beyond. This has knock-on effects for engagement, retention and productivity too, starting the hiring cycle off on a positive note.
At the least, it’s absolutely critical that you don’t make mistakes with the candidate experience. Losing track of candidates, not staying in touch, not maintaining a chain of contact – these things can be massively damaging to your brand. A smart applicant tracking system has a huge role to play here – and if you ask us, the RecruitEze free ATS is one of the best.
- Managing an international workforce
The workforce is changing. Many generations, a mix of freelance talent, and now we’re crossing international borders. International workforce management is a major staffing concern for HR leaders in 2017, just as it was in 2016. How do we source, hire and retain a worldwide team? What can we do to ensure productivity? How can we manage cross-borders? What impact will differing time zones have on productivity?
HR professionals must find a way to answer these questions, to ensure maximum productivity internationally. There still exists what McKinsey call a “globalisation penalty”, where global companies consistently perform lower than local companies across a whole range of areas.
The issues these businesses face include sourcing and hiring, relocating, training, facilitating skills transfer and navigating cultural difference. To fix this, we must manage siloes and improve performance, and ensure cross-border teams function optimally. We must train future leaders who grasp and thrive in this global age. We must try out different organisational models, to ensure we can evolve.
- Coping with skills shortages through investment in training
40% of global businesses report skills shortages, the most since 2007. More than half of US employers have open positions they simply can’t fill. Over 2/3 of employers struggling with skills shortages suffer a direct financial impact. The MRI Network Recruiter Sentiment Survey 2016 shows sourcing is one of the biggest challenges recruiters face.
Those statistics considered, it’s immediately clear why skills shortages continue to present such a huge staffing challenge. How can we attract the people we need? Can we get the job done, if we can’t find those people? Will our businesses remain commercially competitive, if we can’t innovate? How can we build these skills in new or existing employees?
One of the big answers to these questions is learning and development. If we can’t hire people who already have the skills we need, we must train people to have them. Invest in our existing assets, so to speak, and create a competitive difference that way. Although there is an obvious cost attached here, there are also cost savings to be realized through training in-house rather than hiring externally.
We should also be looking further ahead, cultivating talent from a younger age to have the skills we’ll need in the future. To this end, apprenticeships and internships have a clear role to play.
Learning and development offers a potential solution to the skills shortage problem, it also brings its own problems to bear. In 2017, HR professionals are likely to be concerned with securing investment into training, and managing training and time-lost. They’ll be worrying about ensuring training effectiveness, and justifying ROI.
- Improving employee retention
Employee retention is one of 2017’s biggest staffing challenges for 36% of IT, 36% of retail and 37% of financial services hiring managers. Poor employee retention can cost tens of thousands of dollars, plus the knock-on effects of having to source, hire, induct and engage another employee. On the flipside, improving retention saves time and money, increases morale and improves productivity.
Read more: Top 7 Benefits of Retaining Your Employees
Many businesses still aren’t doing what they could though, and employee retention remains a major staffing issue. Some of the things you’ll see HR professionals embracing in 2017 include innovative interviewing to ensure better cultural fit, and better rewards programs.
Read more: 7 Important Employee Retention Tips
You’ll see an improvement in the feedback review cycle, with employees hopefully given more one-on-one time with management. You’ll see an increased emphasis on recognition as well as reward. Many workplaces will offer more flexibility too, in a nod to the rise of the freelance economy and changing millennial expectations. Lastly, you’ll likely see a big increase in the number of roles being filled internally – both to combat hiring difficulties and to improve career progression and aid retention.
- Improving employee productivity
A major staffing challenge for 2017 will be the need to improve employee productivity. With the workforce demanding more flexibility and better work-life balance, it’s imperative to increase productivity without increasing hours-in-office. Indeed, simply increasing hours-in-office would be counterintuitive, and likely have little impact on productivity.
It seems we need to get more done in every area of our life, so increasing efficiency has a critical part to play here. Embrace new technologies designed to save you time, and make your life that little bit easier. You’ll already be familiar with the Recruiteze small business applicant tracking system – and its hacks like that which can make a big difference.
Beyond that, look to ways to improve the ease of communication across your organisation. Particularly in bigger businesses, siloes can slow down progress significantly. There’s also a clear link between employee engagement and employee productivity, so you’ll be focusing on many of the same changes above.
- Overcoming budget restraints
More than half of US employers feel the recession is still in full force, and we’ve got the budget restraints to prove it. The Employer Associations of America’s 2017 National Business Trends Survey found that recruitment and associated costs are a major concern. 56% of businesses worry about their long-term ability to pay for benefit costs, while 44% worry about paying competitive wages long-term. 47% worry about the cost of regulatory compliance.
These problems reflect the growing emphasis on employee engagement, and the competitive hiring landscape. We need to offer candidates a better salary, with better rewards and benefits, and it’s costing us more to find them. The same survey found that over 80% of businesses increased wages in 2016, and 75% plan to increase wages again in 2017.
There’s pressure to hire and stay competitive, but budgets are being stretched thinner and thinner.
Just over a year ago nearly 12% of employers said their hiring would increase despite these restraints though. To meet these increased hiring demands, HR professionals in 2017 will be concerned with methods to reduce recruitment costs.
Read more: Best Ways To Reduce Recruitment Costs Part 1
Things like improving retention will be important on this front, and businesses will adopt a more outbound candidate attraction strategy. The likes of content marketing will be central. You’ll want to improve the hiring process; making it more efficient and ensuring you deliver the optimum candidate experience. You’ll improve the interview process to ensure you get the right candidates to start with, and look at other ways to lower attrition to this end.
Read more: Best Ways To Reduce Recruitment Costs Part 2
You’ll also increase your direct hires with a view to reducing agency costs, embracing social media and other advertising. Your employer brand will be a central focus for 2017, allowing you to attract and retain better candidates, more easily. You’ll focus more on referrals as a better quality, more abundant, more cost-effective source of hire. You’ll hire more freelance talent, to save on overheads.
- Staying on top of evolving technology
Back in 2015, a CareerBuilder survey found that nearly 10% of HR professionals found implementing new technologies a challenge. That trajectory is set to continue well into 2017 and beyond. The constant evolution of technology offers real competitive edge, but that comes hand-in-hand with the competitive disadvantages of getting it wrong. However, using a small business applicant tracking system like Recruiteze is easy to implement and well worth your time.
In particular, people analytics is the big conversation of 2017. The Deloitte Human Capital Trends Report shows that 77% of organisations think people analytics is critical, but only 8% rate themselves as “strong”. This gap will be a major concern in 2017.
The HR skills gap will be a major concern in 2017.
Getting to grips with people analytics allows HR professionals to better understand their role in the organisation. It allows us to make better decisions for the business, and improve retention by improving our insight. Analytics drives accountability and helps dissolve siloes by improving communication. It allows us to hire better, and keep those people more engaged and more productive, for longer.
However, we’re still held back by a lack of understanding and a lack of suitable talent. 2017 will see that start to change, with smart businesses doing what it takes to embrace analytics to the full.
- HR playing a more strategic role
One of the biggest challenges HR professionals face in 2017 are the changes in the HR role itself. HR professionals are called on to make different decisions, to rise to different challenges than we have before. We’re called on to become strategic business partners, where we’ve often been seen as reactive. We must be able to communicate, influence and persuade at Board level, and we must overcome the objections of those around us in order to do so. We must command a newfound respect, to secure the buy-in we need to be effective.
It’s important that we also become project managers, able to handle the vast information projects that HR analytics will drive. HR professionals need to be able to interpret data, and tell a compelling story about that data that engages and inspires change. We must become advocates for the changes in the HR sphere, and we must embody those changes ourselves.
The staffing industry has never been short of challenges, and 2017 proves no exception. Some of these challenges are timeworn, and show no signs of abating. We still face tight recruitment budgets, of course, and a competitive hiring landscape still demands our attention. Reducing costs and increasing effectiveness is an ever-present demand.
Others of these challenges demand new coping strategies. The rise of analytics and Big Information mark a shift in how we collect and leverage people information, for instance. Meanwhile the workforce continues to split along fault-lines, becoming increasingly multi-generational, multi-national and multi-cultural.
Taken together, these changes mark a fundamental shift in the role of the HR professional. HR becomes more proactive and less reactive; more informed, and less instinctive. Data gives insights that drive business decision-making, and HR professionals are the harbingers of this strategy. While cost reductions and productivity increases remain ever important, HR is evolving to look forwards as much as it looks back.
Free Small Business Applicant Tracking System and Recruiting Software
Recruiteze offers efficient recruitment tools to help HR and recruitment professionals meet the staffing future head on. Our small business applicant tracking system allows you to parse, format and easily navigate candidate information, so your online recruitment process is more efficient. You get a custom careers page and application system, which ensures your candidate experience is top-tier.
Stop doing recruitment the hard way, and start using Recruiteze today.