A recent survey found that skilled talent is the second largest threat to a company’s capacity to meet revenue and performance targets. Take a look at the results to learn more.
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Randstad USA, one of the largest HR services and staffing companies in the United States, released today the findings of its annual Workplace Trends report. According to the survey, the inadequate supply of qualified and skilled talent is the second biggest threat to companies’ ability to meet revenue or business performance targets, second only to “increased competitive pressures.” Meanwhile, increasing turnover rates are exacerbating the challenge, with 4-in-10 companies (41 percent) indicating their turnover rate increased in the last year.
Stagnant Wages Contributing to High Turnover of Talent
With a tightening labor market comes greater competition for hard-to-find talent, and greater efforts to lure workers away from competitors with better job offers. In fact, survey respondents named “talent being recruited by competitors” as the top reason behind their turnover, and 70 percent report their employees’ decisions to leave are primarily due to receiving a better offer elsewhere.
Even with the low U.S. unemployment rate and improving job creation situation, wages have remained largely stagnant in the last decade. Despite the signs that companies may need to increase salaries to recruit and retain top talent, most have kept their wages the same. Only one-third of companies have increased their salaries in the last 12 months, while 6-in-10 companies (60 percent) have kept them the same as they were 12 months ago.
Despite little upward movement in salaries, companies acknowledge that wage increases can greatly minimize turnover. Respondents named “salary increases” as the most effective program at decreasing turnover rates, followed by opportunities for advancement and bonuses.
“The reality is inflation-adjusted wages for typical workers have barely budged in the past five years,” said Jim Link, CHRO of Randstad North America. “The lack of wage increases plaguing the country’s labor market has allowed companies to contain costs and regain capital, however the honeymoon appears to be over. According to our survey findings, the increasing turnover rates and recruiting difficulties among companies can be directly attributed to the absence of wage growth.”
Many Positions Left Unfilled for Longer Periods of Time
Companies continue to struggle with open positions and vacancies that are difficult to fill, and they remain unfilled for lengthier periods of time. On average, companies report they are currently 13 percent understaffed, according to the Randstad study. Meanwhile, HR decision makers report the average time-to-fill a nonexecutive position is 2.6 months and 5 months for leadership or executive talent.
“Often the challenge for hiring executives isn’t the quantity of available candidates, instead it’s the increasing difficulty in finding talent that is qualified, with the right skills and cultural fit for the position. In fact, our study found that three-quarters of HR decision makers agree that compared to last year, it is taking more time to find the right talent to fill positions.”