When capital was the limiting factor in organizational growth, finance and treasury functions moved to the forefront in many organizations. Now that people are becoming the scarce resource, HR departments are moving to the forefront in increasing number of organizations.
In Canada, HR professionals have been lucky to date. We have been experiencing higher unemployment rates than the United States or some western European countries. In the U.S., the battle for employees now includes virtually every occupation group. There are battles to hire part-time help for service industries that have been traditionally staffed by students after school. Even Disney World came to Canada this year to recruit staff to work in Orlando, Fla.
And while Canadian workforce shortages are not yet as acute as those south of the border, the signs indicate the war for staff is escalating in Canada.
Fierce battle
In the major cities, the battle is becoming fierce. The growing shortage of qualified staff is changing organizational thinking, especially in organizations dependent on highly qualified staff who are in short supply. These organizations are beginning to realize they cannot afford to lay off highly skilled staff as a cost-saving measure, because they will need these staff in the future when their organization turns around.
Like any resource shortage scenario, the battle for employees has taken on a traditional pattern. It first became evident in the highly skilled and scarce professions. Over the last three years, it has hit particularly hard in industry sectors that have been experiencing high growth rates. We are all familiar with the news stories covering the shortages in the high-technology industry, and the loss of Canadian information technology experts to the U.S. A similar pattern is occurring in the health-care sector, as efforts to deal with delays in treatment have created shortages for specialists in a growing range of health-care disciplines. Jumps of 50 per cent to 100 per cent in market pay rates have been experienced in several fields.
The second stage has been the spin-off impact on other highly skilled professions. The growth in organizations has fuelled a growing shortage of skilled, experienced financial and human resource management experts. Annual turnover rates in many skilled professional fields are approaching 25 per cent to 30 per cent in the hottest job markets in Canada. Pay rates have been growing in excess of 10 per cent per year.
Increasing staff shortages
The third stage is beginning to happen to many organizations today, namely the increasing shortage of skilled staff in most disciplines. Almost every job requiring post-secondary education is facing increasing shortages of qualified staff.
The fourth stage is beginning to appear in the tightest labour markets. In this stage, organizations find difficulty recruiting staff for even the lowest skilled jobs.
Increasingly, HR departments are focusing their efforts on attracting new staff. One significant development has been the move towards Internet recruiting as organizations seek ways to broaden their search options, as well as seeking out tools to increasingly automate the recruiting process. In many cases, the pressure is on to speed up the recruiting process.
Another growing development is to adopt a continuous recruiting strategy when an organization requires a large number of staff with similar qualifications. In continuous recruiting, the organization seeks out and hires qualified candidates before it has identified vacancies. In essence, it pre-hires in anticipation of future vacancies.
Along with more aggressive recruiting, organizations are re-visiting their compensation, benefits, and quality of work-life practices. As in any sellers’ market, job candidates are putting more emphasis on what the organization is offering them.
The flip side is retaining needed staff. Organizations are beginning to pay more attention to why staff members leave. There is an increasing focus on evaluating turnover and the use of exit interviews. This is now becoming a topic of discussion at board meetings.
Although employees leave for many reasons, organizations are beginning to understand that the single most common reason for an employee leaving is having to work under a bad manager or supervisor. Too many organizations have promoted people into supervisory or managerial ranks because of their technical expertise, or their ability to manage upwards. What is critically important is the ability of managers to manage downwards effectively. Poor staff morale and higher turnover are the consequences of managers who bully, manipulate and demean their staff. Staff deserve effective supportive management. Interestingly, recent research has shown that the quality of leadership has a significant impact on team performance. Indeed, excellent leadership can be at least as important as talent in determining the level of a group’s performance.
HR veteran Brian Orr is currently taking a personal break from work. He can be reached at [email protected].
In Canada, HR professionals have been lucky to date. We have been experiencing higher unemployment rates than the United States or some western European countries. In the U.S., the battle for employees now includes virtually every occupation group. There are battles to hire part-time help for service industries that have been traditionally staffed by students after school. Even Disney World came to Canada this year to recruit staff to work in Orlando, Fla.
And while Canadian workforce shortages are not yet as acute as those south of the border, the signs indicate the war for staff is escalating in Canada.
Fierce battle
In the major cities, the battle is becoming fierce. The growing shortage of qualified staff is changing organizational thinking, especially in organizations dependent on highly qualified staff who are in short supply. These organizations are beginning to realize they cannot afford to lay off highly skilled staff as a cost-saving measure, because they will need these staff in the future when their organization turns around.
Like any resource shortage scenario, the battle for employees has taken on a traditional pattern. It first became evident in the highly skilled and scarce professions. Over the last three years, it has hit particularly hard in industry sectors that have been experiencing high growth rates. We are all familiar with the news stories covering the shortages in the high-technology industry, and the loss of Canadian information technology experts to the U.S. A similar pattern is occurring in the health-care sector, as efforts to deal with delays in treatment have created shortages for specialists in a growing range of health-care disciplines. Jumps of 50 per cent to 100 per cent in market pay rates have been experienced in several fields.
The second stage has been the spin-off impact on other highly skilled professions. The growth in organizations has fuelled a growing shortage of skilled, experienced financial and human resource management experts. Annual turnover rates in many skilled professional fields are approaching 25 per cent to 30 per cent in the hottest job markets in Canada. Pay rates have been growing in excess of 10 per cent per year.
Increasing staff shortages
The third stage is beginning to happen to many organizations today, namely the increasing shortage of skilled staff in most disciplines. Almost every job requiring post-secondary education is facing increasing shortages of qualified staff.
The fourth stage is beginning to appear in the tightest labour markets. In this stage, organizations find difficulty recruiting staff for even the lowest skilled jobs.
Increasingly, HR departments are focusing their efforts on attracting new staff. One significant development has been the move towards Internet recruiting as organizations seek ways to broaden their search options, as well as seeking out tools to increasingly automate the recruiting process. In many cases, the pressure is on to speed up the recruiting process.
Another growing development is to adopt a continuous recruiting strategy when an organization requires a large number of staff with similar qualifications. In continuous recruiting, the organization seeks out and hires qualified candidates before it has identified vacancies. In essence, it pre-hires in anticipation of future vacancies.
Along with more aggressive recruiting, organizations are re-visiting their compensation, benefits, and quality of work-life practices. As in any sellers’ market, job candidates are putting more emphasis on what the organization is offering them.
The flip side is retaining needed staff. Organizations are beginning to pay more attention to why staff members leave. There is an increasing focus on evaluating turnover and the use of exit interviews. This is now becoming a topic of discussion at board meetings.
Although employees leave for many reasons, organizations are beginning to understand that the single most common reason for an employee leaving is having to work under a bad manager or supervisor. Too many organizations have promoted people into supervisory or managerial ranks because of their technical expertise, or their ability to manage upwards. What is critically important is the ability of managers to manage downwards effectively. Poor staff morale and higher turnover are the consequences of managers who bully, manipulate and demean their staff. Staff deserve effective supportive management. Interestingly, recent research has shown that the quality of leadership has a significant impact on team performance. Indeed, excellent leadership can be at least as important as talent in determining the level of a group’s performance.
HR veteran Brian Orr is currently taking a personal break from work. He can be reached at [email protected].
