Talent Acquisition Ranks Among Highest Risks to Businesses

Talent acquisition is increasingly becoming a matter of risk management.

A new survey of business leaders by PwC reveals that talent acquisition and retention rank second (at 38%) among cited risks to their business (right behind more frequent and/or broader cyber attacks, at 40%). Indeed, the ability to recruit is a more serious concern for executives than rising production costs (34%), supply-chain disruptions (34%), Covid (25%), and other issues.

Only 30%of executives find the recession concerning. (In contrast, 69% of Americans worry about a recession, according to a Bankrate survey.)

Additionally, PwC found that 63% of leaders (up from 56% in January) have changed or are planning to change processes to address labor shortages. On the one hand, companies are laying off people. On the other, there’s a puch by organizations to automate and increase technology to reduce employees. 

In other words, it seems as if the strategy to mitigate talent acquisition risks demands acquiring less talent. 

This puts recruiters in a weird position. As employers look for technology solutions that will cut heads, they must often also bring in candidates with different skills. Meanwhile, employees are keenly aware that their positions may no longer be as secure, given that talent strategies often involve shuffling people around.

Risk Management for Candidates

When a company has had layoffs, or the CEO announces that layoffs are coming, or the news focuses too heavily on recession, candidates become leery of joining what looks like a risky organization.

To address such concerns, Amelia Christy, owner and chief operating officer of KNA Solutions, a staffing agency, advocates being candid. She suggests the following language, “We are reducing some positions in departments that weren’t profitable/revenue-generating, which is allowing us to hire and expand other departments and bring in new talent that will ensure our company is being set up for success no matter what economic conditions we are experiencing.”

This eases candidates’ fears that they will be hired and then quickly fired. (Of course, it needs to be the truth. You don’t want to bring people on board just to off-board them.)

It also requires senior management to communicate clearly with their line managers and the recruiting department. You can’t have your recruiters saying one thing while leadership plans a different strategy if you want to keep your Glassdoor reviews positive and your pipeline filled. Keeping those who hire (line management and recruiters) in the dark doesn’t help anyone.

Recruiting’s Low Tolerance for Risk

PwC also found that leaders wanted to change their processes, which can yield not just a shuffle of people but the need to hire new people altogether.

Meg Martin, HR consultant and founder of HRMeg LLC, sees this need as part of a potentially significant shift to bringing in higher-paid and highly skilled employees. “Any business planning to use new technology to perform functions previously covered by humans will still need employees to program, manage, and operate that technology,” Martin says. “So it’s potentially a shift in the kinds of jobs an employer might be seeking to fill: fewer humans to perform the function at the end of the chain, but more highly-skilled humans to program the technology to do the work.”

This may be good news for job seekers, as well as the sectors having the most difficulty recruiting, like hospitality and food service. These fields tend to have a lot of low-skilled, low-paying jobs. Except, increasingly, people are looking for more highly skilled, high paid jobs. As Martin points out, shuffling processes and increasing technology means that companies will require more “highly skilled humans” to replace entry-level roles.

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This may mean recruiters need to think outside the traditional hiring box and hire people from outside tech roles for the newly created positions, such as additional computer experts or technical workers who can repair complicated equipment. In fact, as it is, McKinsey found that 44% of tech workers in their sample started out in other professions. 

Hiring non-tech people for tech roles, however, can be a challenge for hiring managers who want someone “perfect.” Shelley Piedmont, founder of Career GPS, says that hiring managers often feel that they have to get it right the first time, explaining that organizations often give “no slack to a manager that makes a wrong hire.” 

If you can’t make a mistake in hiring, it makes sense to hold out for perfection. But with a tight labor market, training someone on the job may be faster than holding out. But that requires risk.

Today’s market doesn’t allow for zero-risk hiring. 

Mitigating Risk

PwC’s research shows that executive teams have plans to mitigate risks associated with talent acquisition, namely;

  • “Expanding remote work options for roles that allow: A large majority (70%) of respondents say they have either implemented this or have a plan in place. 
  • “Pursuing [company] acquisitions to gain access to talent: About half (52%) of executives say they’re considering an acquisition to gain access to needed talent.
  • “Customizing their HR strategy by employee type: 59% either have a plan to do this or have implemented one.”

Regarding the second point, while it may seem extreme to acquire an entire business to find the right talent, it certainly gives companies access to people who are not interested in changing jobs. If they don’t come to you, you can go to them.

Overall, though, it’s a confusing time for both recruiters and candidates. Is the economy going to tank, leaving businesses struggling, a reliance on more technology solutions, and a glut of candidates? Or will these solutions head off problems?

It will take time to tell how things will change, but in the meantime, recruiters are the frontline offense in the battle for the best talent.

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