3 ways employers can better access talent and skills

Organizations are stifled by skills and talent shortages, and it’s only going to get harder. Skills gaps, or the inability to attract talent, are considered the biggest barrier to transformation for companies across 95% of countries featured in the Future of Jobs Report 2023.

Even in a volatile economic environment with rising interest rates, about 50% more businesses are concerned about skills and talent than other barriers like regulatory challenges or shortages of investment capital.

Other research also identifies skill and talent concerns. A survey from ManpowerGroup shows a 17-year high in hiring difficulties, with over three-quarters of employers across 41 countries having difficulty filling roles. Research from Achievers also identifies labour shortage concerns, with two-thirds of HR leaders globally saying the labour shortage is getting worse.

While employers are finding things difficult now, they may be experiencing the tip of the iceberg. ILO data shows that by 2030, working-aged people will make up 2% less of the population in upper-middle- and high-income countries – the equivalent of taking 75 million people, more than the population of France, out of the labour force in these countries. These demographic shifts will be more impactful and longer lasting than macro-economic fluctuations in labour supply and demand.

With labour shortages in upper-middle- and high-income countries set to last, employers must find new ways to access talent. The Future of Jobs Report asked over 800 employers to identify the business practices and public policies with the greatest potential to increase access to talent. The three practices selected by most employers were increasing wages, better promotion opportunities and more upskilling. However, looking at some practices picked less often can help us identify potentially overlooked opportunities to address businesses’ most pressing needs.

Here’s three business practices that could be being missed as ways that employers could improve their access to the skills and talent they need.

Just one in ten employers believe tapping into diverse talent pools is a promising way to increase talent availability in the next five years. With a growing focus on diversity and inclusion, it’s possible that employers already believe they are benefitting from diverse talent. However, the data suggests further opportunities exist.

According to a Culture Amp survey of HR leaders, despite over 80% believing that DEI initiatives are beneficial to their organizations, only 34% of respondents reported having enough resources to support these initiatives. With gender-diverse companies 15% more likely to outperform their peers and ethnically diverse companies 35% more likely (Why Diversity Matters), diverse talent provides both financial and social returns.

The World Economic Forum’s Prioritizing Racial and Ethnic Equity in Business: Towards a Common Framework report sets out more of the negative economic consequences of racial and ethnic inequity for both businesses and countries. Similarly, as explained in the Global Gender Gap Report 2023, a robust gender strategy is increasingly seen as essential to attracting the best talent and ensuring long-run economic performance, resilience and survival.

Beyond DEI goals, diversifying talent pools can include looking in new places. Achievers estimate those not actively seeking jobs make up 39% of the talent pool. Similarly, reducing the rigidity of job requirements, such as experience in specific roles/sectors, can open up a broader candidate pool. This has been effective in recruiting for the most in-demand roles on LinkedIn, with cross-role hiring responsible for six of the 10 most in-demand roles.

Only 6% of employers believe removing degree requirements and conducting skills-based hiring is among the strongest practices to increase talent availability. Despite relatively few employers selecting this approach, LinkedIn data demonstrates its value. On the platform, 40% of companies used a skills-first approach in 2022. These employers were 60% more likely to find successful job candidates than their peers who did not apply a skills-first approach.

A skills-first approach can provide a more robust talent pipeline to employers and create additional opportunities for job seekers. This is demonstrated by ManPowerGroup’s Jobs Exchange via Welcome.US, highlighted in the World Economic Forum’s Putting Skills First report. With collaboration partners including Accenture and Pfizer, this initiative uses a skills-first approach to facilitate refugee job seekers accessing the job market. The Jobs Exchange uses both self-reported skills and AI-identified skills that the job seeker may not have recognised in themselves to identify a range of potentially suitable job matches. This has led to over 100,000 jobs advertised and thousands of refugees successfully matched in just over one year.

While 80% of employers expect to focus their DEI programmes on women, just 14% believe that public policy to increase the availability of childcare will increase talent availability. In comparison, just 3% believe that supplementing childcare for working parents will increase talent availability among the organizations surveyed in the Future of Jobs Report.

Increased access and affordability of childcare increases labour force participation, particularly for mothers, as demonstrated in several studies such as Del Boca and CEPR. This increases the talent pool employers can access and can promote the well-being of both individuals and the overall economy, as noted in the World Economic Forum’s Global Gender Gap Report 2023. A recent European Commission report estimated that increasing the participation rate of children under three years of age in childcare to 60% could increase labour participation rates for mothers by 7-61% in a selection of European countries. If the average increase was applied across upper and upper-middle-income countries, the labour force could increase by 35 million people – almost the population of Canada.

Employers’ experience with skills shortages and difficulties accessing talent is likely to be exacerbated for those in upper-middle and high-income countries, as working-age people make up less and less of the population.

Employers will need to explore new ways to match talent to their jobs. These employers could alleviate their greatest concerns by trying new ways to diversify their talent pool, apply skills-based hiring, and pay attention to childcare needs.