Learning & Development, Recruiting

Can More Money Close the Skills Gap?

The late, great Notorious B.I.G., aka Biggie Smalls, once rapped about more money causing more problems, but could more money be the solution to closing the skills gap?

money

Source: Atsushi Hirao / Shutterstock

If you’re like 54% of global companies, chances are you’re having a tough time finding skilled talent—and it’s not your fault. The skills gap can definitely be blamed. According to new research from ManpowerGroup, the talent shortage has nearly doubled in the last decade, going from 30% in 2009 to 54% in 2019. ManpowerGroup explains that the skills workers need have changed drastically over the last 10 years, and skills that were once in demand are now obsolete.

According to the report:

“The top ten most in-demand roles in 2019 are trending year over year: 80% of them were also in short supply in 2018. Healthcare professionals enter the top ten reflecting an aging population. Meanwhile office administrators, contact center staff, project managers, lawyers and researchers fall out of the top ten reflecting the rise in automation of routine tasks. And as technology disrupts work, the most in-demand roles may look similar yet the skills required continue to evolve rapidly.”

Closing the Skills Gap Requires Serious Cash Flow

So how can we close this gap? By attracting skilled talent with the things they want and need from an employer. These skilled workers know they are in high demand, and because of this, they have the upper hand when it comes to negotiating the things that will help them succeed in their jobs.

So, what’s driving skilled labor to employers of choice? Simply put: money. ManpowerGroup compiled insights from 13 years of its global Talent Shortage Survey data to uncover what workers want, and money ranked number one across the board for all ages and genders, with the small exception of older, male Baby Boomers (aged 65+), who say challenging work is more important than money.

While money tops the list for a majority of workers, it’s not the only thing employees want. ManpowerGroup reports that these items listed below are important, as well:

  • Gen Zs (aged 18–24) are ambitious and hungry for cash and career development, yet already, women and men have differing desires. Women prioritize pay twice as much as their next priority—developing skills—while men say skills and career matter almost as much as pay.
  • Millennials (aged 25–34) want flexibility and challenging work; women say flexibility is a necessity, whereas it’s still a nice-to-have for men.
  • Gen Xers (aged 35–44) are on a quest for balance. Men prioritize flexibility as much as women and want the ability to work remotely, their share of parental leave, and a flexible start and end to their day.
  • Boomers (aged 55–64 and 65+) are driven by pay, challenging work, and flexibility, though they place the highest priority on leadership and teams. Older workers want to pay it forward: The over-65s are most motivated by purpose.

Pay Always Matters

While pay may matter to most workers, what’s vital is that these workers say it’s how the pay is being delivered that is of more importance. The report says that pay is the top attraction and retention factor for all workers under 65 years old, regardless of gender. But wages aren’t keeping up with the demand.

According to the Organisation for Economic Co-operation and Development (OECD) Employment Outlook in 2018, wages are only growing half as quickly as they were 10 years ago, especially for lower earners. But this low wage growth could be attributed to the skills workers have. For in-demand skills—like cybersecurity, cloud computing, front-end developers, solutions architects, health care, and more—the workers who have them have seen salary increases of over 10% in the same time period.

ManpowerGroup suggests that “companies have to get creative to enhance compensation beyond cash to differentiate and attract talent.” When 89% of people in the United States would consider additional benefits over more pay, popcorn and Ping-Pong are not the answer, says the report. When employers take a personalized approach to their compensation and benefits packages, employees and candidates alike will flock to these companies.

When it comes to additional benefits to offer, ManpowerGroup suggests autonomous working and flexibility arrangements. In addition, you could add parental leave policies and/or unlimited time off. You could even create “unplugged” policies to prevent your workers from getting burnt out, which will also show them that you have their well-being in mind.

“Add attractive financial incentives and goodwill gestures that reward loyalty,” suggests the report. Financial incentives can include tuition reimbursement and student loan repayments, as well as financial planning assistance, among other things. And be sure to offer learning and development opportunities to keep workers’ skills up to date. While pay may be top of mind, offering these additional perks will keep workers sticking around a lot longer.

How to Give Workers What They Want

Now that we’ve identified what workers want, it’s time to understand how you can give these things to them. “Talent can call the shots and employers need to shift their demand closer to match the supply,” says the report. “They need to understand people’s needs and desires to attract, engage and retain the best talent while others are trying to do the same in a tight labor market. Getting it right up front brings return on investment and retains and develops talent for the long term.”

ManpowerGroup offers the following tips to help guide you:

  1. Get creative about compensation—Pay matters, but so does quality of life. Reward people well to help meet their needs wherever they are in their career journey.
  2. Assess for fit and potential—Provide people with the insight they need to thrive, and you’ll end up with more motivated and satisfied workers.
  3. Build a culture of learnability—Give workers the challenge they crave and the support they need to grow and succeed.
  4. Create flexibility for wherever people are in their career life cycle—It helps drive well-being and productivity, too.
  5. Be more than transparent about your “why”—Be explicit and authentic about the purpose and meaning in your company’s mission, and ensure leaders live it.

If you thought this article was going to be about “throwing money at the problem to make it go away,” think again. Money may solve some problems, but when it comes to attracting and retaining talent, money plays a small role in your workers’ happiness. Offering a competitive salary and benefits your workers want will help you and your employees succeed in the future.