Most organizations around the world are wrestling with not only a widening skills gap but a more complicated labor market due to improved global economies. Need proof? Just look to the numbers: (1) In 2013, the U.S. unemployment rate was hovering at 5% and economists were wondering if the market was at its full employment, (2) by December 2019, the unemployment rate was at 3.5%, and (3) monthly job growth in 2020 is likely to average 150,000 jobs per month.
In response, the practices for attracting talent have been drastically changing as well, with many CEOs losing sleep over their perceived failure to attract and retain top talent.
How can organizations meet their hiring needs amidst these dire conditions? A total talent strategy can be the resounding answer. From traditional permanent employees to various contingent workers, this emerging model of talent workforce management integrates a full range of talent sources and helps employers find workers who bring real value to the table.
We recently sat down with three experts in the field of total talent to talk about their views on where employers stand on the approach today and where things are headed. In this article, we highlight a few points from the conversation.
What’s Driving Total Talent Acquisition?
Finding qualified talent is among recruitment’s biggest challenges. So why, with hiring at an all-time high and more money than ever being spent on recruitment, have so many businesses failed to attract the right talent? Some say it’s because organizations haven’t adapted to a candidate-driven market. Others suggest it’s a failure to embrace generational changes, technology, and globalization.
Zach Chertok, HCM Analyst with Aberdeen, says organizations are starting to do a lot of soul-searching. “They’re really having to pull back and say, where am I getting this wrong?” Chertok argues that, whatever the reason, there does seem to be a growing realization that the future of talent acquisition depends on moving from a siloed to a holistic total talent approach.
Research shows that companies that are now seriously pursuing total talent acquisition say they find it a practical solution to gaining a competitive advantage. According to these trendsetters and early adopters, their top total talent drivers include:
1) Controlling Labor Costs
Controlling costs is the number-one driver—and for good reason. Jennifer Torres, Client Portfolio Leader, MSP, at PeopleScout, says her clients "really want to have a full line of sight into how they're buying, from a labor perspective, which is one of their highest costs."
While the current unemployment rate is great news for job seekers who want to market their skills for the highest bidder, a 3.5 percent unemployment rate is costly for organizations committed to securing the best talent for the job. To make matters worse, the current environment is causing some companies to hire the first qualified candidate (who may later turn out to be a bad hire). What’s needed is a change in mindset from a supplier-driven to a talent-drive acquisition model.
Kim Pope, Chief Operating Officer at WilsonHCG, leads the global delivery team and says a question she hears all the time from clients is: “How do I adopt this new approach? How do I even go about being able to bring this all together?” She admits it’s not as easy as it sounds.
A total talent model lets companies hire in an on-demand capacity with non-permanent workers like freelancers and contractors alleviating the pressure of a tight market. From a procurement perspective, total talent represents a less expensive option than traditional hiring methods and is more effective in driving your organization’s financial performance by reducing overall labor and workforce costs.
2) The Need to Measure Various Talent Types
A total talent model helps organizations determine the resources most appropriate for their needs, regardless of worker classification, before acquiring them. And every kind of worker, be it permanent, temporary, independent contractor, or contingent, is considered to be an important resource for supporting the overall mission.
Companies enjoy the broader access to talent, cost-effectiveness, and more precise workforce planning this strategy brings. The benefits most often cited include:
- Achieving a competitive advantage through attracting and engaging higher quality talent.
- Accelerating business growth by using a flexible workforce, including remote workers.
- Improving employer brand.
3) Skills Shortages
Whether it’s a lack of required skills, educational qualifications, credentials, or work experience, skills shortages occur when the labor market doesn’t produce enough qualified candidates to fill open positions within an occupation or organization.
Record global talent shortages are forcing employers to shift their focus from traditional hiring strategies to building talent for today and tomorrow. Total talent lets you develop the right blend of people, skills, technology, and processes that create value while improving worker’s lives, productivity, and your organization’s bottom line.
Companies are now investing in hiring from more diverse pools of talent, collaborating with educational institutions, and investing in employee training. HR leadership is choosing to see the skills gap as an opportunity to better understand their organization’s needs and to strategize solutions.
4) Risk Mitigation
Unsurprisingly, risk mitigation is a big reason for organizations to adopt a total talent strategy. One need look no further than the recent $240 million payout FedEx Ground Package System agreed to give drivers in 20 states who were misclassified as independent contractors to understand the fear. In a similar case, a group of Uber drivers reached a $20 million settlement agreement with the ride-hailing company. Experts say the number of cases are on the rise.
The holistic view of the workforce that a total talent approach brings is crucial to helping management see:
- Who is doing their work at any given time.
- On what basis they’ve been hired.
- And at what cost.
Toward a Total Talent Future
Pope believes this modern approach to talent acquisition is here to stay. “Total talent is not a trend,” she says. Organizations now have over 30% to 40% of contingent workers within their workforce and they need help addressing those skill shortages.”
As the world of talent acquisition evolves, organizations must be ready to change with it. Concerns regarding talent shortages and how to address the skills gap are already challenging the traditional ways companies are finding, attracting, and hiring talent. The fact that more businesses are seeing the benefits of so many drivers indicates that total talent acquisition will only gain momentum in the coming years.
For more insights from this conversation, view the pane: "5 Things You Need to Know About Total Talent Today."