Talent shortage hurts HR

by 04 Sep 2007

Eighty-five per cent of HR hiring managers agree the talent shortage has increased the time it takes to recruit new staff, with almost one-quarter saying they have experienced increases of more than six weeks, according to recent research.

As a result, 69 per cent of hiring managers said their recruitment costs have increased, with 47 per cent experiencing an increase in costs of up to 25 per cent.

“Extended delays in the recruitment process can have damaging flow-on effects for an organisation,” said Richard Taylor, practice leader for Hudson Human Resources, which conducted the national survey of almost 300 HR hiring managers.

“Low morale among staff left to absorb the extra work, reputation damage as a result of continually advertising the same role and the obvious loss of productivity while the business is operating under capacity are just some of the possible issues,” he said.

As a result of the tight employment market, Taylor said some employers might be settling for second-best when recruiting new employees.

“The flow on effects of this could be quite serious. The quality of service provision provided by the HR team will be greatly affected, not to mention the business’ perception of HR,” he said.

“HR has been trying for too long to earn its rightful place at the table and activities such as these jeopardise this position by damaging its credibility.”

Taylor also said that increased recruitment costs are based heavily on the supply and demand principle. Increased competition for a decreasing supply of candidates has led to an increase in advertising spend, and employers paying higher salaries to secure premium candidates.

Taylor also noted that the skills shortage is predicted to get worse in terms of volume, but the level of skill available in the market should improve which would help to address the balance.

“All of this should drive the importance of the HR function within organisations, creating a generation of potential employees looking at HR as a career path and an opportunity to get in to an important business role and noticeably impact performance,” he said.

“I think we will also see a marked increase in the volume of line managers moving in to HR roles. Whether they are encouraged to move, or they see it as a new career path, it can only be a good thing.”

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