“Employers struggling to find qualified job candidates” – with unemployment rates across the United States at 25-year highs, nearing nine percent in some markets, it’s no wonder that unexpected announcements like this make headlines. So why is it that, with the Bureau of Labor statistics
reporting more than four million jobs lost in February – a very tough month for our economy – there were still nearly 3 million job openings available nationwide? At least part of the answer lies in the words “qualified candidates.”
Over the last decade, our nation’s economy has seen a fundamental shift in the types of industries that are driving job growth, and those that are shrinking. The number of manufacturing jobs, for example, has declined steadily since the late nineties and supports 30 percent fewer jobs today. Many employees leaving this industry are finding themselves ill-prepared to apply for jobs in other areas.
According to Manpower, Inc., 19 percent of employers nationwide cannot find qualified job candidates, especially in certain skilled trades such as engineering, sales, production and information technology. With technological advances, increasingly sophisticated consumer purchasing habits, and global competition many employers expect the gap between existing employee skills and those in demand to widen.
So how do businesses and the workforce adjust? They invest in people, in training and development. For the unemployed, this may mean going back to school to gain additional degrees, certifications, or an entirely new set of skills, or finding on-the-job training. For employers, this should mean a significant, strategic investment in human capital.
A Sustainable Competitive Advantage
"The only way to develop sustainable competitive advantage is by careful recruitment, training and retention,” said Robert Reich, former U.S. Labor Secretary and professor of public policy at the University of California, Berkeley. “If people are viewed as costs to be cut, your organization is moving in the wrong direction.”
It’s the people, that add the most value to any business plan, and companies that understand this have been investing in people for years. These companies consider it part of their corporate responsibility to identify, recruit and hire people with potential, and then train them on imperative industry skills. This often means re-training some skills and placing an emphasis on supporting diverse employee audiences and learning styles. Today, high school and college graduates and those displaced from other industries now sit aside baby boomers who are re-entering the workforce. And everyone needs training.
Companies that embrace the potential of their employees don’t commoditize talent, they elevate its value. For those who demonstrate a commitment to this type of strategy, the payoffs are tremendous.
Anyone who has worked in the contact center industry, in-house or outsourced, knows that turnover can be an ever-present challenge, and expensive as well. But when companies get it right – through a long-term commitment to employee training, development and succession planning – attrition rates remain low, and customer satisfaction is high. These companies create a culture of respect, support and success. And when it’s time to recruit new employees, their reputation precedes itself. One company, who invests nearly 10,000 hours a year in global video training, and regularly promotes from within, was able to reduce their recruiting advertising expense by 35 percent and still see an increase in the quantity and quality of applicants. For firms who regularly hire thousands of people for new programs, a strong marketplace reputation most certainly boosts the bottom line.
But as Reich maintains, the real end game is sustainable competitive advantage. Successful firms see this advantage through new business sales, customer retention and growth. Companies whose well-trained, loyal employees offer innovative, thoughtful solutions and service to customers will be called upon to serve them again.
But if the benefits are this clear, why do so few organizations adopt this philosophy?
Why is it that so many companies skimp on this investment, or worse, look at their human resources purely as cost centers that are often the first to get slashed? And what is the long-term impact to their success?
Short-sighted Savings. Long-term Consequences.
Employee-related expenses often account for a large percentage of a company’s overall resource allocation, and for that reason, many misguided leaders see big opportunities for cost savings here. Cuts in this area, however, are short sighted and often the long-term damage isn’t apparent until it’s far too late. Some of the most painful consequences include:
Reduced Revenue: lack of regular training, proper communication and strong employee accountability lead quickly to poor results. Poor results lead to customer attrition, and a decline in sales. This often prompts the next fatal step in the form of additional cuts to preserve margins, and the vicious cycle begins.
Poor cultures shed top performers: Companies that don’t invest in people won’t ever have to worry about cutting their best employees. They will gladly leave on their own to take more rewarding jobs in a competitor’s office.
Increased costs: Perhaps the most ironic consequence of cost-cutting is…increased costs. Experienced recruiters and leaders know the significant costs that go into recruiting, on-boarding and training new hires. On the job experience makes these employees more effective and more valuable as they grow in their roles. Those promoted from within carry with them years of priceless institutional knowledge and expertise. But funding these efforts with an ever-changing employee base negates most if not all the savings employers think they’re getting when they cut human capital investments.
Investments in employee recruitment, training and retention are just that – investments. They require payback time and a long-term strategy to recognize results. And in today’s marketplace the burden – or opportunity, as some see it – of re-training the nation’s workforce will continue to shift to employers. Embracing this concept as a sustainable competitive advantage will allow companies to recruit and train the highest-potential employees to drive organizational success.
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Edited by Michael Dinan