The Ongoing Impact of the Recession—Recruiting and Skill Gaps

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SHRM Survey Findings: The Ongoing Impact of the Recession—Recruiting and Skill Gaps March 12, 2013

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Two-thirds (66%) of organizations that are currently hiring full-time staff indicated that they are having a difficult time recruiting for specific job openings, an increase from 52% reported in 2011. HR professionals indicated that the top four applied skills gaps for job applicants are critical thinking/problem solving (53%), professionalism/work ethic (46%), written communications (41%) and leadership (38%).

Transcript of The Ongoing Impact of the Recession—Recruiting and Skill Gaps

Page 1: The Ongoing Impact of the Recession—Recruiting and Skill Gaps

SHRM Survey Findings: The Ongoing Impact of the Recession—Recruiting and Skill Gaps

March 12, 2013

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• This is Part 2 of a series of SHRM survey results about the ongoing impact of the U.S. and global recession, which began in 2007. Overall results will be reported separately in three different topic areas:

Overall financial health and hiring. Recruiting and skill gaps. Global competition and hiring strategies.

• Overall results for 2012 will also be reported separately for California.

• Industry-specific results will be reported separately for each of the eight industries that were included in the sample:

Construction, oil, mining and gas. Federal government. Finance. Health. High-tech. Manufacturing. Professional services. State and local government.

Introduction

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• Is recruiting for specific jobs difficult in the current labor market? Two-thirds (66%) of organizations that are currently hiring full-time staff indicated that they are having a difficult time recruiting for specific job openings, an increase from 52% reported in 2011.

• What basic knowledge and applied skill gaps do job applicants typically have? For basic knowledge skills, writing in English (55%), mathematics (38%), reading comprehension (31%) and English language (spoken) (29%) are the most common skills gaps. The top four applied skills gaps are critical thinking/problem solving (53%), professionalism/work ethic (46%), written communications (41%) and leadership (38%).

• What types of jobs are the most difficult to fill? Although difficulty in filling specific jobs varies by industry, the top five most difficult positions to fill overall are highly skilled positions: scientists (88%), engineers (86%), high-skilled technical (e.g., technicians and programmers) (85%), high-skilled medical (e.g., nurses, doctors, specialists) (83%), and managers and executives (77%).

Key Findings: Difficulties in Recruiting

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• How many organizations are making major technology changes that affect the work of employees? Thirty percent of organizations indicated that in the last 12 months they had made major strategic changes involving the use of technology (e.g., robotics, computerized systems, software technologies) that affect the work of employees, and 10% plan to do so in the next 12 months.

• Will these technological changes affect the number of full-time regular employees? For organizations that have made technological changes in the last 12 months or that plan to in the next 12 months, 71% indicated that the number of employees will stay the same. Sixteen percent reported an increase, and 13% a decrease, in the total number of employees.

• Will these technological changes affect what employee skills are required for the organization? Although 72% of organizations indicated these technological changes would require new skills, they would not require new staff. Eighteen percent indicated employees would require the same skills, and 10% would need to hire new staff for the new skills that would be required.

Key Findings: The Impact of Strategic Technological Changes

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• HR professionals may need to convince hiring managers that staffing for some jobs will be more difficult than expected. This is particularly true of STEM (science, technology, engineering and math) jobs. In particular, the high-tech and manufacturing industries are experiencing difficulty recruiting for certain positions.  HR professionals may need to work with their organizational leaders to come up with more effective compensation packages for hard-to-fill jobs.

• Staffing for replacement needs of jobs exited by retiring Baby Boomers may create an even bigger staffing challenge in the years ahead. The U.S. Bureau of Labor Statistics’ (BLS) 2010-2020 Employment Project Report forecasts a decreasing overall labor force from 2010 to 2020. With the Baby Boomers leaving the workforce, replacement needs will exceed new job growth vacancies in four out of five occupations.

• Technological changes may reduce the number of full-time regular employees for some organizations.  HR professionals will need to take a lead role in driving increases in productivity while making sure employees are not at risk of burnout.

• Skills shortages may put renewed emphasis on training.  In the years ahead, HR professionals will need to work with their organizational leaders and relevant education and training bodies to invest in education and training as a way to meet skills shortfalls.

What do these findings mean for the HR profession?

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Difficulties in Recruiting

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In general, in the current labor market, are you having a difficult time recruiting for certain types of full-time, regular positions that are open in your organization?

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents whose organizations were currently hiring full-time staff were asked this question.

Yes; 52%No; 48%

2011

Yes; 66%

No; 34%

2012

n = 1,568 n = 2,562

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In general, in the current labor market, are you having a difficult time recruiting for certain types of full-time, regular positions that are open in your organization?

Note: Only statistically significant differences are shown.

Comparisons by industry

High-tech (82%)

Manufacturing (79%)>

Federal government (50%)

Finance (66%)

Health (65%)

State or local government (52%)

Construction, mining, oil and gas (74%)

Professional services (70%)>

Federal government (50%)

State or local government (52%)

Finance (66%)

Health (65%)> State or local government (52%)

Comparisons by industry

• The high-tech and manufacturing industries are more likely than the federal government, finance, health and state or local government industries to be having difficulty recruiting for certain types of full-time, regular positions.

• The construction, mining, oil and gas and professional services industries are more likely than the federal government and state or local governments to be having difficulty recruiting for certain types of full-time, regular positions.

• The finance and health industries are more likely than state or local governments to be having difficulty recruiting for certain types of full-time, regular positions.

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In general, what basic skills/knowledge gaps do job applicants have in your industry?

Note: Percentages do not total 100% due to multiple response options. Respondents whose organizations were not having a difficult time recruiting for certain types of full-time jobs were not asked this question.

Other

History/geography

Humanities/arts

Foreign languages

Technical (computer, engineering,mechanical, etc.)

Government/economics

Science

English language (spoken)

Reading comprehension (in English)

Mathematics (computation)

Writing in English (grammar, spelling, etc.)

9%

1%

2%

8%

7%

11%

18%

30%

30%

38%

48%

9%

2%

2%

8%

11%

13%

14%

29%

31%

38%

55%

2012 (n = 1,928)

2011 (n = 597)

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In general, what applied skills gaps do job applicants have in your industry?

Note: Percentages do not total 100% due to multiple response options. Respondents whose organizations were not having a difficult time recruiting for certain types of full-time jobs were not asked this question.

Other

Ethics/social responsibility

Diversity

Lifelong learning/self-direction

Creativity/innovation

Information technology application

Teamwork/collaboration

Oral communications

Leadership

Written communications

Professionalism/work ethic

Critical thinking/problem solving

5%

19%

17%

21%

25%

30%

36%

36%

39%

41%

44%

54%

5%

18%

18%

21%

21%

29%

33%

34%

38%

41%

46%

53%

2012 (n = 2,168)2011 (n = 716)

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Specific job categories for which organizations are having difficulty recruiting

Note: n = 242-1,344 (2012); n = 104-610 (2011). This figure represents “Somewhat difficult” and “Very difficult” responses. “Not applicable” responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of full-time jobs were asked this question.

Sales representatives

Skilled trades (e.g., electricians, carpenters)

Managers and executives

High-skilled medical (e.g., nurses, doctors, specialists)

High-skilled technical (e.g., technicians, programmers)

Engineers

Scientists

72%

68%

78%

86%

85%

88%

83%

68%

70%

77%

83%

85%

86%

88%

20122011

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Specific job categories for which organizations are having difficulty recruiting

Note: n = 242-1,344 (2012); n = 104-610 (2011). This figure represents “Somewhat difficult” and “Very difficult” responses. “Not applicable” responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of full-time jobs were asked this question.

Administrative support staff

Customer service representatives

Hourly laborers

Drivers

Production operators

HR professionals

Accounting and finance professionals

24%

34%

29%

36%

52%

49%

54%

21%

31%

34%

41%

44%

49%

53%

20122011

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The Impact of Strategic Technological Changes

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In the last 12 months, has your organization made any major strategic changes involving the use of technology (e.g., robotics, computerized systems, software technologies) that affect the work of employees?

Note: n = 3,324. Percentages do not total 100% due to rounding.

Yes No No, but we have plans to do so in the

next 12 months

30%

59%

10%

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In the last 12 months, has your organization made any major strategic changes involving the use of technology (e.g., robotics, computerized systems, software technologies) that affect the work of employees?

Note: Only statistically significant differences are shown.

Comparisons by industry

Health (42%) >

Construction, mining, oil and gas (27%)

Federal government (28%)

Finance (28%)

High-tech(24%)

Professional services (28%)

State or local government (26%)

Comparisons by industry

• The health industry is more likely than the construction, mining, oil and gas; federal government; finance; high-tech; professional services and state or local government industries to have made any major strategic changes involving the use of technology that affect the work of employees in the last 12 months.

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In the last 12 months, has your organization made any major strategic changes involving the use of technology (e.g., robotics, computerized systems, software technologies) that affect the work of employees?

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

2,500 to 24,999 employees (35%) > 100 to 499 employees (28%)

Comparisons by organization staff size

• Organizations with 2,500 to 24,999 employees are more likely than organizations with 100 to 499 employees to have made major strategic changes involving the use of technology that affect the work of employees in the last 12 months.

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As a result of these technological changes, has (or will) the total number of full-time, regular employees at your organization increased, stayed the same or decreased?

Note: n = 1,345. Only respondents whose organizations made or planned to make any major strategic changes involving the use of technology in the past 12 months or next 12 months were asked this question.

Increase Stay the same Decrease

16%

71%

13%

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As a result of these technological changes, has (or will) the total number of full-time, regular employees at your organization increased?

Note: Only statistically significant differences are shown.

Comparisons by industry: Increase in total number of full-time, regular employees

High-tech (37%) >

Federal government (10%)

Health (15%)

Professional services (14%)

State or local government (7%)

Construction, mining, oil and gas (25%)

Finance (18%)

Manufacturing(19%)

> State or local government (7%)

Comparisons by industry

• The high-tech industry is more likely than the federal government, health, professional services, and state or local government industries to have an increase in the total number of full-time, regular employees as a result of recent or planned technological changes.

• The construction, mining, oil and gas; finance; and manufacturing industries are more likely than state or local governments to have an increase in the total number of full-time, regular employees as a result of recent or planned technological changes.

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As a result of these technological changes, has (or will) the total number of full-time, regular employees at your organization decreased?

Note: Only statistically significant differences are shown.

Comparisons by industry

• The federal government is more likely than the construction, mining, oil and gas; health; high-tech; manufacturing; professional services; and state or local government industries to have a decrease in the total number of full-time, regular employees as a result of recent or planned technological changes.

Comparisons by industry: Decrease in total number of full-time, regular employees

Federal government (33%) >

Construction, mining, oil and gas (8%)

Health (11%)

High-tech (9%)

Manufacturing(15%)

Professional services (9%)

State or local government (12%)

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As a result of these technological changes, has (or will) the total number of full-time, regular employees at your organization decreased?

Note: Only statistically significant differences are shown.

Comparisons by organization staff size: Decrease in total number of full-time, regular employees

25,000 or more employees (27%) >1 to 99 employees (9%)

100 to 499 employees (9%)

Comparisons by organization staff size

• Organizations with 25,000 or more employees are more likely than organizations with 1 to 499 employees to have a decrease in the total number of full-time, regular employees as a result of recent or planned technological changes.

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How have (or will) these technological changes affected the employee skills required in your organization?

Note: n = 1,345. Only respondents whose organizations made or planned to make any major strategic changes involving the use of technology in the past 12 months or next 12 months were asked this question.

Require new skills, but we do not need

to hire new staff (e.g., existing staff can be trained if

necessary)

Require the same skills

Require new skills, for which we need to

hire new staff

72%

18%

10%

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How have (or will) these technological changes affected the employee skills required in your organization?

Note: Only statistically significant differences are shown.

Comparisons by industry: Require the same skills

Finance(31%)

Professional services (27%)>

Health (11%)

State or local government (14%)

Finance(31%) > Manufacturing(16%)

Comparisons by industry

• The finance and professional services industries are more likely than the health and state or local government industries to require the same skills for employees as a result of technological changes.

• The finance industry is more likely than the manufacturing industry to require the same skills for employees as a result of technological changes.

Comparisons by industry: Require new skills, but do not need to hire new staff

Health (81%)

State or local government (81%)>

Finance(61%)

High-tech (56%)

Professional services (66%)

• The health and state or local government industries are more likely than the finance, high-tech and professional services industries to require new skills, but they do not need to hire new staff as a result of technological changes.

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How have (or will) these technological changes affected the employee skills required in your organization?

Note: Only statistically significant differences are shown.

Comparisons by industry (continued)

• The high-tech industry is more likely than the finance, health, professional services, and state or local government industries to require new skills and need to hire new staff as a result of technological changes.

Comparisons by industry: Require new skills and need to hire new staff

High-tech (24%) >

Finance(8%)

Health (8%)

Professional services (8%)

State or local government (6%)

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How have (or will) these technological changes affected the employee skills required in your organization?

Note: Only statistically significant differences are shown.

Comparisons by organization staff size: Require the same skills

1 to 99 employees (25%) >500 to 2,499 employees (12%)

2,500 to 24,999 employees (14%)

100 to 499 employees (21%) > 500 to 2,499 employees (12%)

Comparisons by organization staff size

• Organizations with 1 to 99 employees are more likely than organizations with 500 to 25,000 employees to require the same skills for employees as a result of technological changes.

• Organizations with 100 to 499 employees are more likely than organizations with 500 to 2,499 employees to require the same skills for employees as a result of technological changes.

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Demographics

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Demographics: Organization Industry

Note: n = 3,481. Percentages do not total 100% due to rounding.

State or local government

Manufacturing

Professional services

Health

Finance

Construction, mining, oil and gas

High-tech

Federal government

Other

20%

14%

13%

13%

11%

10%

7%

7%

6%

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Demographics: Organization Sector

n = 3,294

Privately owned for-profit

Government

Publicly owned for-profit

Nonprofit

Other

43%

25%

17%

12%

3%

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Demographics: Organization Staff Size

n = 3,208

1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees

26%

33%

19%

16%

6%

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n = 3,311

Demographics: Other

U.S.-based operations only 76%

Multinational operations 24%

Single-unit organization: An organization in which the location and the organization are one and the same.

36%

Multi-unit organization: An organization that has more than one location.

64%

Multi-unit headquarters determines HR policies and practices

50%

Each work location determines HR policies and practices

3%

A combination of both the work location and the multi-unit headquarters determines HR policies and practices

47%

Is your organization a single-unit organization or a multi-unit organization?

For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?

Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?

n = 3,325

n = 2,204

Corporate (companywide) 68%

Business unit/division 19%

Facility/location 13%

n = 2,206

What is the HR department/function for which you responded throughout this survey?

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• Response rate = 15%

• 3,481 HR professionals from a randomly selected sample of SHRM’s membership participated in this survey

• Margin of error +/-2%

• Survey fielded August 28–September 14, 2012

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SHRM Survey Findings: The Ongoing Impact of the Recession—Overall Financial Health and Hiring

Survey Methodology

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About SHRM Research

Project leader:Tanya Mulvey, survey research analyst, SHRM Research

Project contributors:Alexander Alonso, Ph.D., SPHR, vice president, SHRM ResearchEvren Esen, manager, Survey Research Center, SHRM ResearchJennifer Schramm, GPHR, manager, Workplace Trends and Forecasting,

SHRM Research

Copy editor:Katya Scanlan, SHRM Knowledge Center