talent – Talent500 Blog

5 proven strategies to improve employee retention in 2022

Posted on June 23, 2022 by naveen

The pandemic spurred on remote work models and for most, this was a welcome change from the ways of old. However, despite the autonomy and enhanced productivity, issues like burnout stayed a concern. In fact, burnout numbers increased significantly in 2021 with 52% of employees experiencing it as per an Indeed report. This comes as no surprise, especially with regard to the Great Resignation and the factors that led to it. With millions of employees leaving their companies, low pay and insufficient growth opportunities were two of the top reasons for 63% of employees quitting their jobs. Even in 2022, the issues persist, with 88%of employees on the fence about their company.

For those who quit, things weren’t grim. In 2021, 61% found a new job with ease, with 33% finding a new opportunity fairly quickly. Much of this success is attributed to companies adapting to the need of the hour. By offering better perks in line with evolving needs, employees found a better fit. In fact, over 50% of the employees who quit now have better pay, more flexibility, career growth opportunities, and more, according to a PEW report.

Revised strategies gave companies a competitive edge, and the same goes for retention too! The models of yesteryear are no more suitable in a digital landscape, and to retain talent, leadership must think outside the box.

To shed insight on trending winning strategies, here are tried-and-tested strategies for enhanced retention.

Maintain transparency to build trust

Trust and transparency are key to retaining employees and also building organizational culture. While both these elements exist in many forms, when it comes to retention, work responsibilities and salaries come into question most often. Companies looking to retain their talent must realize that trust and transparency can only be established if it is uniformly enforced across all operational verticals.

Netflix, on the other hand, established trust by assigning responsibility. Through the ‘No Vacation Policy’, Netflix offers unlimited paid leaves to its employees, and trusts its employees to do what’s best for the company. As a result, it has an under average turnover rate of just 11%.

Encourage self-expression and identity

A toxic work environment is a major reason why people quit companies. Naturally, the fix here is to build a healthy environment, one that focuses on employee satisfaction and engagement. One effective way is to encourage employees to bring their whole authentic selves to work. A great example of a company that fosters this culture is Northrop Grumman Corporation.

Featuring amongst the Fortune 100 leaders in employee retention, their core philosophies are centered around diversity and inclusion (D&I). At the company, employees are encouraged to express themselves however they deem fit. In fact, this kind of messaging enjoys the support from upper management, as their CEO is vocal about freedom of expression. Northrop Grumman Corporation was even celebrated for its diversity in 2020. All of these factors combined help it enjoy the retention rate it does.

Invest in employee career development

When employees feel that the company is invested in their career growth, they are more inclined to stay. This is an undeniable fact, especially for millennial workers, 41% of whom say that it is a vital factor of job satisfaction. A key aspect of career development for employees is internal mobility. Companies can make internal mobility a key factor as it can help employees learn new skills and improve retention. Research reveals that companies can increase retention at twice the rate by implementing internal mobility.

One of the world-renowned companies, Google has an 80/20 program that allows employees to explore and do side projects. The program encourages employees to put 20% of their time into side projects to help them advance their skills and capabilities. A program like this also allows employees to break free from their routine and change things which helps boost innovation, critical thinking, and employee relationships.

Personalize compensation and benefits

Fair compensation and benefits that meet employee needs can help companies reduce attrition by 56%. This not only improves retention, but also helps attract the best of the best in the industry. One of the companies that have implemented this strategy is Haro Helpers. Along with a standard compensation package, the company also gives employees a range of benefits to choose from. This includes bonuses, streaming services, commission, mental well-being, and more. This helps employees decide what they want when it comes to perks and benefits, which in turn improves satisfaction and retention.

Another aspect in terms of compensation and benefits is paid time off and rewards. Rewarding employees helps keep them motivated as well as valued in the organization. Apple, among the top global companies, offers its employees additional paid time especially during holidays. The simple policy works wonderfully in conveying the message that Apple is working for their employees. Moreover, the company also offers rewards based on the job location and culture. This helps employees feel valued and gives them a sense of belonging.

Recognize and reward employee efforts

Recognition and rewards have a direct effect on employee motivation, 72% of employees would work harder if they felt appreciated in the company. Not only that, recognition also has an impact on retention rates. A survey in 2019 revealed that 63% of employees are less likely to leave the organization if they were recognized. Naturally, this means companies should focus on strategies that not only recognize their workforce, but also reward.

Fortunately, reward programs can be clubbed into the compensation package. TCS, a leading company in India had a retention rate of around 11% in 2019. Much of this success can be attributed to the fact that it invests in its employees. What’s more, TCS offers employees a retention bonus on a yearly basis. This incentivizes loyalty, and may even impact motivation for some. When it comes to recognizing its employees, Infosys has a promotion cycle that happens on a quarterly basis. These promotions double-dip into career growth for employees, while also ensuring engagement regularly. With one of the top places to work at, Infosys has an attrition rate of 20.4%.

Employee retention is among the top concerns of CEOs, but these strategies can enable organizations to better retain their top talent. A proven approach is to create an engaging environment where employees feel a sense of belonging. Research shows that when employees feel a strong sense of belonging in the company, there is a 50% reduced risk of turnover.

Ensuring this level of engagement is something that should be built into the culture, and enforced right from the early stages of recruitment. With Talent500, you can do just that and build engaged teams efficiently. Our AI-powered tools ensure the best fit from a diverse pool of pre-vetted talent. What’s more, our processes ensure 5x faster hiring, which translates to faster deployment of services in a remote setting. To know more about our talent management services and the solutions ready for deployment, request a consultation.

6 things emerging and established leaders can learn from the failure of startups

Posted on June 23, 2022 by temp

Learning from the success of unicorns is wise, but there’s equal, if not more, insight to glean from startups that crash and burn. A forerunner to success, failure is part and parcel of any undertaking and those that succeed usually learn from what went wrong. For leaders, whether it comes to policy reform, employee management, revenue generation models, or any number of business practices, startups are a goldmine of tested theories. This is mainly because a vast number of startups are launched every year, with nearly 90% failing. Quite a few don’t make it past the first year, and knowing why can give leaders an edge.

In many cases, the answer to the why of it all comes down to insufficient capital and dwindling market demand. If not these, company culture comes into question, which without the right ideals, is merely a buzzword. A lack of policies that reinforce company culture or poor employee management at senior levels can put viable startups on the path to failure. Further, as the millennial workforce grows and finds its footing in startups, newer enterprises can find it hard to adapt to the modern employee.

All of these factors pose a challenge for modern leaders, and to get the formula to success right, learning from those that have come up short definitely helps.

Here are a few learnings for leaders looking to thrive in the competitive landscape of modern business of startups.

Get the team right – From partners to employees

Building a team with identical values and goals as the company goes a long way to ensure success. A partner or a co-founder who is simply a ‘yes person’ does little. It is crucial to see that their skills and talent complement that of the other members of leadership. In fact, not having the right core team members is one of the top reasons why startups fail.

Besides management, having the team members on the same page is essential to ensure that problems do not escalate and lead to the company’s downfall. This is where diversity comes into play, as such teams are known to broaden the company’s horizon. Be it through professional opinions, innovative mindsets or simply fresh perspectives on a number of problems, leaders stand to gain a lot from team building appropriately.

Balance the finances, business model, and product/service

The business model, finances, and product/service of the startup are vital aspects that build the foundation for success. As a result, balance and harmony between these aspects are non-negotiable, yet many companies fail to establish them. Research reveals that 38% of the startups fail because of insufficient or improper management of the capital gathered. Similarly, if the business model is not functional, it will hinder internal processes too. Further compounding the issue, the product or service may also fail to hit its mark. All of these combined inhibit startups and it all stems from imbalance. Modern leaders ought to assess their frameworks to see if there’s balance, and fix where there isn’t.

Encourage innovation to stay competitive

Innovative enterprises will often find success more easily than their counterparts, but achieving it is easier said than done. Most startups are built on innovative advances and there’s no doubting the fact that it is key to getting ahead and staying there. However, failure on this front can lead to massive losses, especially if the competition innovates at a faster pace. As a matter of fact, nearly 20% of the startups are defeated by their competitors, and innovation, in one aspect or another, has a huge role to play.

An effective way to organically ensure innovation is to focus on diversity and inclusion (D&I). A diverse and inclusive workforce creates an environment where people can freely think out of the box. Moreover, their different backgrounds provide new outlooks on various problems. Research shows that organizations who practice and excel at establishing D&I can deliver almost twice the economic profit.

Ensure that there is a demand for the service/product offered

As mentioned above, dwindling demand is among the top reasons why most startups fail. In fact, many start out with the determination to “stick through the rough patch”, even when there’s no sense in doing so as the market demand isn’t there. Data suggests that nearly 35% of the startups fail because there is no need for the product or service offered. Innovation for innovation’s sake shouldn’t be the end goal.

Create a company culture that promotes longevity and stability

The company culture is a critical aspect of any enterprise, and especially so for fast-paced startups. Unfortunately, startups can struggle with this, and failing here has dire consequences. For one, it comes across as a failure on the part of leadership, as a large part of the responsibility to influence company cultures rests on their shoulders. Secondly, in the nascent stages, unfavorable practices of bullying, misconduct, or disregard for policy can be disastrous.

This oversight should be an eye-opener for leaders as should noting the importance of establishing a company culture. One that looks out for its workforce is key. It can help avoid other pitfalls common that come naturally with time, and help with more serious issues like burnout. In fact, a strong culture can help avoid the failure caused by burnout, which nearly 5% of the startups experience.

Focus on employee satisfaction along with customer satisfaction

Employees are just as crucial to the mission as customers, especially in the pursuit of success. This is because engaged employees increase productivity as well as customer and employee retention. For startups, this means lower costs and better margins. In addition, satisfied employees can help improve employee engagement. Increased and improved employee engagement can lead to a 10% increase in customer loyalty, an 18% increase in productivity, and a 23% increase in profitability.

Considering what we’ve learnt, leaders ought to take a few plays from the startup playbook when looking to increase employee satisfaction. These smaller enterprises are often more willing to experiment with policies and come up with winning formulas to attract and retain the best talent.

Failure is a part of achieving success, but leaders don’t have to fail all the time to get there. Learning from those that have been there and done it helps, while being cost-effective too! Remember, enterprises that succeed do so because they bounce back and learn from their mistakes. According to research, the timing of execution plays a pivotal role in ensuring the success of a startup. What’s more, the team that executes is just as important, and building an agile team capable of rising to the task is easy with Talent500.

Equipped with AI-powered solutions, we can help you build global teams quicker and more efficiently, all the while ensuring employee engagement. Besides this, we offer talent management services to establish diverse remote teams and in adherence to country-specific regulations. Request a consultation to know more about the solutions on offer.

Work flexibility: 4 tips organizations can try to attract top talent

Posted on June 22, 2022July 19, 2022 by temp

The pandemic has not only resulted in an irreversible shift in the dynamics of work, but also created a new breed of mobile employees. Today’s workforce prizes autonomy and flexibility, often more than traditional triggers that attract and retain talent like compensation and benefits. Not only is a higher number of top talent demanding flexibility, but many are also willing to look for other opportunities should it not be offered.

The Talent500 State of Talent survey in 2022, conducted among 4,800 professionals across Indian cities, reveals this sea change in mindset: 87% of the tech talent are actively considering a job switch in 2022, and the primary reason for 55% of respondents is a lack of work-life balance. Further, for 83% flexibility is the top consideration for accepting a new offer.

Brushing aside these statistics as a pandemic reaction rather than a pandemic epiphany, can only add woes to an organization’s recruitment drive. Companies today are dealing with record highs in attrition rates and the intense competition in order to bag the right talent. After all, having greater agency over their lives, better control over their schedules, and the freedom to work when their productivity is highest, is what drives the workforce of today.

This phenomenon is not limited only to India or Asia, but complements sentiments across the globe. As per a survey by Slack, 72% of the employees prefer to work in a hybrid model. Other research also found that employees from the US value the flexibility to work from home for 2-3 days a week as much as 7% pay raise. What’s more, 40% of the employees who currently WFH would look for another job if required to work from the office.

While the why is easily understood in the advantages that flexibility offers employees – in terms of reduced stress and chances of burnout, higher job satisfaction and productivity –implementing flexible policies comes with other benefits for an organization. This includes increased loyalty, improved brand image, better employee morale and a larger talent pool to dip into. However, one fact that stands out among all these is the impact of flexibility on employee retention and attrition. After all, 89% of the companies saw better retention because of flexibility. And while it comes with its challenges, organizations can successfully implement and manage flexibility with the right frameworks in place.

Implementing flexibility – 4 tips for organizations

Flexibility involves both give and take. To foster fairness and accountability, here are a few pointers that leadership teams should keep in mind when implementing flexible policies.

Strengthen communication

Research indicates that 86% of employees and executives believe that ineffective communication causes workplace failures. When virtual, remote sessions overtake physical, face-to-face meetings, it is important for organizations to ensure that the employees are able to communicate with each other without any challenges or lags. While internal messaging tools, emails and video calls are all a must-have, what is critical is for managers to establish a clear guideline on which modes of communication require immediate attention and which matters require urgent communication such as those regarding deadlines or availability.

This helps employees respond to time-sensitive matters with ease and be accountable in remote settings. Since communication is so vital to success in such cases, companies can also offer soft skills training to boost this skill. In fact, 65% of employees who received training for communication had a higher performance score as per another survey.

Keep employee expectations clear

In flex work, making expectations clear to employees can help leaders track their performance as well as ensure that employees know the objectives of the employer. Employers can, and should involve employees in the goal setting process. This not only helps employees understand how their work contributes towards organizational objectives, but also feel a sense of ownership and engagement.

In fact, only 30% of the employees agree that their managers involve them in goal setting and these employees are 3.6 times more likely to be engaged as per a Gallup report. Research also suggests that productivity increases by 56% when managers help employees align their goals to the needs of the organization.

Spell out flexible policy terms clearly

Documenting the options that employees have when it comes to flexible work is key to ensuring smooth operations. Such formal policies can help organizations avoid inequities that come with informal and non-recorded arrangements and also help propagate company culture better. It is also necessary that managers or leaders put together the required details before the arrangement comes into effect.

While this may postpone how soon you can offer its benefits to your workforce, it does pay in the long-term. Include the working terms, infrastructural and other requirements, measures for keeping data safe, health precautions, and more in this policy and make it easy for talent to access them (such as via cloud) when needed.

Review performance

Performance reviews, a part of the traditional work arrangement, also have a big role to play in fully remote or hybrid models. For these to work, organizations need to be transparent about KPIs and other metrics used to measure employee productivity and impact. The only change when it comes to flex work is for employers to consider having such reviews at shorter frequency. This helps employees adapt better, keep their eye on the prize, and work towards achieving company goals in a more informed manner.

Managing flexibility – 3 ways for organizations to take the reigns

Implementing flexibility can come with certain disadvantages like procrastination, decreased engagement and loss of workplace culture. Here’s how companies can tide over these for a net positive gain.

Leverage technology

Tech has a starring role to play in most aspects of work today but enjoys the spotlight most when it comes to successfully implementing flex work. Organizations can and should use it to help teams collaborate, plan, learn, and adapt to evolving needs. According to this study, more than 80% of the employees stated that technology empowered them to better communicate and collaborate. Tools that help mitigate cybersecurity risks and keep sensitive information secure are also a must-have.

Make data accessible on a need-to-know basis

With everything going digital, employees need to have access to required data with ease. Easy and instant access to it makes them more productive and keeps them engaged. While this is highly valuable to organizations, a noteworthy aspect is to ensure that employees get access only to data that falls within their responsibilities. With ransomware attacks rising to 35%, a need-to-know access to data can reduce this risk and prevent data leaks.

Encourage collaboration

Collaboration can nurture stronger bonds within teams and boosts engagement. Research by Gallup suggests that those who have close workplace friends are 7X more likely to have better output, higher personal and customer engagement and enjoy greater well-being. To catalyze such relationships, employers can plan virtual celebrations, create intimate virtual spaces for employees to connect with each other, do a daily virtual huddle, and even create separate channels for specific categories as needed. Planning physical retreats as often as possible can also work wonders.

There are many companies who have successfully embraced workplace flexibility including Dell, Unilever, Sodexo and Humana, and yours can too. As a partner in aiding your efforts to hire, manage, and build global remote teams, look no further than Talent500.

With automated hiring processes and pre-vetting of profiles, we can help you find talent that adds value 5x times faster. Our in-depth pre-assessment has helped place 300,000+ professionals and build teams in 50+ organizations. Request a consultation now to know how you can leverage our tools to effortlessly manage and build your remote workforce.

Attracting talent with workplace experience: 7 stages of employee lifecycle

Posted on April 29, 2022July 11, 2022 by naveen

Leading organizations realize that a strong employee experience focusing on collaboration, skill development, and productivity delivers a great customer experience. Employees are the key to business success, especially with regard to innovation and growth. Naturally, the workplace experience (WX) must be conducive to the overarching objectives, holistically combining technology, culture, and operations to drive sustainable value. In a 2020 survey, 79% of participants responded that a sense of belonging in the workplace was important for their organizations’ success. Interestingly, 93% also believed that a sense of belonging drives organizational performance.

So, a focus on bettering the WX is vital as it will ultimately improve engagement, boost productivity and benefit the customer experience. In fact, organizations focusing on employee experience outperform S&P’s 500 by 122%. On the other side of the same coin, WX for employees impacts all stages of the employee life cycle. This includes all the interactions with the organization starting from pre-recruitment to post-exit. As such, an engaging and enriching experience is key to influencing decisions, be it when applying for roles or choosing to stay when faced with an attractive offer.

It goes without saying that good WX not only attracts but also retains the best talent, while simultaneously improving business performance. To better understand how, read on.

How employee experience helps attract and retain talent

Data has found that a highly engaged workforce leads to 21% more profits. For one-third of the employees across the globe, it is the purpose and mission of their company that makes their job feel important. By improving employee experience, businesses have witnessed a 29% improvement in quality while reducing absenteeism by 51%. Naturally, engaged employees are easier to retain.

Further, millennial and gen-z employees actively seek out companies with the right culture. This aspect, along with the growth and training opportunities, is primarily highlighted through the employee experience initiatives in place. As such, for companies looking to attract the best talent, employee experience should be a priority.

The 7 stages of the employee lifecycle

Employees experience 7 critical lifecycle stages with any organization. Designing each stage and applying best practices throughout the process helps attract and retain the best talent, improve employee performance, and get ahead in competitive markets.

Here are the 7 stages of the employee lifecycle:

Attraction

A company’s value proposition plays a crucial role in highlighting positive WX and attracting top talent. Here, companies should showcase brand value through their values and vision. This aids decision making and those that stand out here will attract talent. Maintaining social media presence and monitoring your online reputation go a long way in attracting the best talent. For employees, it is the image of the company and the idea that ‘this is the best place to work at’ that is attractive.

Recruitment

What makes the hiring process meaningful is an optimized and intuitive experience. Companies must be clear about the criteria and processes, and should provide the necessary information to succeed. Similarly, a timely response is also key, irrespective of the decision. According to a Talent500 Talent Intelligence survey, 90% of professionals feel that 2-3 interview rounds should be enough for recruiters to make a decision.

Onboarding

The onboarding process is a crucial step for any entity. New recruits must be able to adjust to company culture and environment. Making the job description, company values, visions, and expectations clear in the induction phase helps build long-term engagement. Further, during onboarding, new employees learn about the necessary aspects required to function effectively. Naturally, companies should strive to ensure this part of the orientation is well optimized.

Engagement

Vanilla onboarding processes that let employees figure it out on their own is a recipe for disaster. Companies should keep open lines of communication and seek feedback actively to make better WX. Gaining and acting on feedback should be a continuous process to maintain good relationships and retain employees.

Development

Employees will actively participate in an organization’s progress if they see a future for themselves. An employee will consider switching jobs when growth stagnates or is limited. When discussing WX, this means developing personalized and flexible development paths for employees to foster long-term engagement.

Separation

Employee separation is a key part of the lifecycle and the overall WX strategy. Organizations can learn a lot from departing employees through exit interviews. Whether it is a faulty policy, a broken process, or a simple oversight, this communication is crucial to organizational development. Based on the insights shared, companies can prioritize what needs immediate remedial action.

Alumni

Maintaining communications or keeping in touch with ex-employees is good for business. Ex-employees do not always cut ties with their former organizations. Some may return in case of new job opportunities or may even become customers or vendors. This alumni-building process is part of the employee lifecycle and can benefit from standardized processes.

How to build an effective workplace experience strategy

By improving employee experience, companies create the optimal WX. Here are a few ways that have proven effective at building a robust WX strategy.

Communicate the company’s goals and vision

Employees align and perform better when they understand the strategic directions of their company and value its goals. Make the organizational vision clear across the board. This should be evident for the new candidates right from the start because being aware of the vision and objectives will help candidates and employees understand their role in achieving the objectives. This creates a positive, lasting experience.

Embrace diversity in the workplace

A company that has people from across different cultures and backgrounds attracts the best employees and has a lower turnover rate. The diverse nature of the team should be part of the employee branding to attract talent from diverse backgrounds. In fact, almost 67% of candidates consider diversity and inclusion in a company before considering the organization. Around 50% of employees feel their organizations should increase workplace diversity. Interestingly, diverse companies earn 2.3X higher cash flow per worker.

Reward workers

Recognizing the efforts of employees and rewarding them for their achievements can help build desired work behaviors and promote organizational values. Build an employee reward and recognition program that appreciates employees’ performance, and personal and career milestones. Include training management staff to implement good workplace experience strategies. The focus should be on converting each employee into an ambassador of the company and making them part of your recruitment process through referrals.

Form a collaborative workplace culture

Organizational success is a team effort where siloed success means little. In a workplace, there ought to be effective interactions and collaborations within and between teams. A company that enables such an environment makes its employees feel more comfortable, happy and valued. A competitive environment in a workplace can often lead to lower performance and a lack of collaboration. This could, in turn, reflect on the review boards and impact your employer brand.

Concentrate on employee wellbeing

The employees’ physical and mental well-being is important in reducing absenteeism and boosting productivity. Providing emotional support and helping them address the issues can showcase organizational values and imbibe trust. Isolation and feeling unvalued can affect an employee’s performance and work experience. Although a hike in pay and perks acts as motivators, special programs designed to increase and better communication are also greatly appreciated.

How outsourcing talent management helps improve WX

Outsourcing of global talent acquisition is the new norm for industry leaders worldwide. Fast-growing startups and Fortune 500 companies like H&M, Airbnb, Morgan Stanley, Uber, Careem, Walmart, Rakuten, Twitter, and Pepsico trust global talent management companies like Talent500 to manage and scale their global teams. In fact, almost 78% of companies around the world have positive opinions about their outsourcing partners. Outsourcing the recruitment and management of global talent helps provide an exceptional experience, be it during the attracting, hiring, or onboarding stages during the employee life cycle.

In the world of remote work and hybrid work environments, being able to hire global talent effectively is the need of the hour. Here, outsourcing hiring and talent management is the smart choice, especially if you partner with Talent500. Companies from more than 50 countries are leveraging the Talent500 platform, which offers a suite of services designed to optimize WX at every stage of the process. Schedule a consultation today to manage your global talent efficiently and achieve 60% higher recruiter productivity!

Global technology talent crunch: What it means, its implications, and how to solve for it

Posted on April 29, 2022July 8, 2022 by mahidhar

Shortage of skilled tech talent has been a pressing issue globally due to rampant digital transformation. In recent times when the pandemic played the role of disruptor, this gap only widened and reliance on digital increased. Satya Nadella, CEO of Microsoft, rightly stated, “All businesses are software businesses”. This is apparent now more than ever as entire industrial ecosystems have now gone digital. This shift was revolutionary, putting talent in the driver’s seat for the first time in a long time, and new movements took form.

For instance, the full force of the ‘great resignation’ phenomenon was felt by global industries as professionals across major countries were quitting jobs in record numbers. According to Microsoft’s Work Trends Index 2021, more than 40% of employees were considering changing jobs. And in a more recent Talent500 Talent Intelligence survey, 85% of employees are considering a job change in 2022. With travel restrictions, tightened immigration policies, reshuffled company budgets added to the mix, it is no wonder that several big players found it hard to maintain steady workforces. In fact, the attrition rate at India’s IT giants has spiked to 20-30% per annum.

The situation did improve over time as data published in CompTIA’s Workforce and Learning Trends report, 2021, stated that 40% of companies hired IT talent during the pandemic. Unfortunately, this did little to solve the talent crunch as nearly 54% of global companies faced some form of talent shortage. So, what does this talent crunch mean for the global IT ecosystem? Read on to find out.

The impact of the IT talent crunch

As industries continue to integrate with technology, reliance on qualified talent will only increase. There’s no dearth of evidence for the rising demand of technology talent but very few countries have the resources to deliver. India, for instance, was found to be the only country capable of matching the talent needs across various sectors, even having a surplus with a total pool of 250 million workers!

The struggle and delay to identify and hire skilled talent is massive as it results in stop-gap solutions that often fall short of the mark such as temporary staffing and inflated salaries, all in a bid to retain what little talent is available. In fact, surveys found that such tactics cost UK companies €7.6 billion every year, negatively impacting their bottom lines. This loss in revenue is alarming and much of it has to do with talent and skill shortages. That’s not all; lack of talent also impedes a company’s ability to cater to their clients, offer services or maintain desired output. The global talent crunch has led to competition among companies, cities, and countries.
According to Korn Ferry’s projection, some nations will be affected more than others in the coming years. Among the countries that are expected to struggle with technology talent shortage include the US, Russia, China, Brazil, Indonesia, and Japan. The crunch has devastating implications, some of which are restricted world trade, reduced overall quality, slower production cycles, and increased cost of labor.

The key causes of the IT talent shortage

Talent shortages are fueled by several factors. On one end was the rapid digitalization brought on due to the pandemic. Almost overnight, entire industries went digital, leaving many employees inadequately equipped for their new roles. Another contributing factor is the lack of education. Emerging technologies and advanced systems rely on educated talent for optimal execution and the supply is not nearly enough to meet the demand. While countries like Poland, Portugal, and Israel are working toward building these educated workforces, major players are plagued with socio-economic issues that stifle progress.

Aside from these, the increase in the number of workers at the end of their career is another notable factor. Baby boomers are now closer than ever to retiring and the millennial workforce is partly reluctant and partly ill-equipped to fill their shoes. While a part of the problem has to do with the steep learning curve of modern technologies, the more pressing issue here is the lack of managerial skills required to take on these roles. As such, companies are left with limited options, if any.

This compounds the issue as bigger corporations and even non-technological companies compete for the precious few capable of handling these roles – throwing big money at the problem. Employees then cement themselves in these positions with no future plans to move. As a result talent is unevenly distributed, and smaller companies have to think out of the box to stay afloat. This often includes relocation to places with a more stable technology talent base and lesser competition.

How tech giants and major players responded to the talent crunch

Tech giants have employed diverse strategies to attract and retain talent. Some include driving up wages or offering higher remuneration through generous signing bonuses and incentives but there are other tactics in play too. Upskilling, for instance, is a big priority for the modern employee and employers are happy to oblige. For instance, Amazon recently invested $700 million to re-skill or upskill their employees. Similarly, PwC planned to invest $3 billion towards upskilling workers in the field of AI and machine learning. Interestingly, 42% of companies plan to launch upskilling initiatives.

By creating training programs and offering opportunities to improve, employers invest in their employees, who in turn become value drivers. Another viable option that now has its moment in the sun is the freelance ecosystem, also known as the gig economy is a labor market that consists of short-term contracts. In this context, companies look to hire self-employed individuals who can take on specific jobs in return for an agreed-upon payment. While this could lead to permanent, full time roles, usually these are intended for short term projects.

Hiring from anywhere has the potential to deliver value in a cost-effective model, and many companies have this option as a preferred route. In fact, hiring remote employees and adopting hybrid work models is now the norm. Around 85% of businesses agreed that implementing hybrid work models increases workplace productivity while 77% of companies declared that remote work reduces operational costs.

Global talent acquisition outsourcing: A long-term solution to bridge the talent gap?

Recruiting international staff is challenging and time-consuming. The top leaders including Fortune 500 companies outsource global recruitment and leverage globally distributed working models, EOR frameworks, and global talent management companies to meet these goals. Data suggests that 65% of successful companies employ outsourcing in their hiring model. This makes sense considering that the global IT outsourcing market is expected to reach $98 billion by 2024. Outsourcing frees up company resources, which can then focus on evolving core business practices.

Around 66% of companies with more than 50 or more employees outsource recruitment. And 78% of businesses have a positive view of their outsourcing partners. Companies like Alibaba, Skype, WhatsApp, Citigroup, Pricena, Slack, CuriosityStream, Klout, Github, Transferwise, and StudyTube found success through this model. Global talent managing companies like ours have successfully helped start-ups and Fortune 500s including Nike, Walmart, Rakuten, Uber, H&M, Twitter, Pepsico, and Target to manage and scale their global teams globally.

With the continuous demand for high-skill IT personnel, companies can’t afford to ignore global talent when hiring. To make hiring the best talent easier, partner with Talent500. Our pre-assessment tests, Intelligent AI fit, and multi-channel sourcing makes hiring 5x faster and 60% more efficient. Find and build the perfect team and scale effortlessly. Schedule a consultation today and build effective globally distributed teams that deliver.