15 Nov Staffing Trilemma: The 3 recruiting market forces you need to contend with
The human resource pinch is the tightest we’ve seen in more than 20 years of business, with the pain especially being felt in the entry-level and mid-level ranks of companies that manufacture, move or process things. Unfortunately, the tight labor market doesn’t seem to be relenting anytime soon. If anything, the labor shortage may become more dire with time.
There are a number of complex reasons why industrial and manufacturing companies are being hit hard by the labor shortage: the 4.3 percent unemployment rate, a massive wave of baby boomer retirements, an inability to attract millennials, a less than 63 percent labor participation rate and a reduced number of South and Central American immigrants who have traditionally eased the tight supplies of workers in entry-level positions, just to list a few factors.
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Understanding these specific recruiting forces is important, but when you’re trying to analyze these complex, multifaceted factors to determine your recruiting position as a company, the analysis can become convoluted, and it becomes increasingly easy to miss the bigger picture. Before you start sorting through these specific factors, we must first contend with the three most foundational market forces at play in any staffing program – cost, speed and quality. The three constraints are interdependent; none of them can be altered without affecting one or both of the others. We call this the Staffing Trilemma.
How does the Staffing Trilemma work?
Let’s say you have an immediate start date, so you need someone “fast”. Finding that person will most likely require either a more expensive candidate or less rigorous screening requirements. In other words, if you need personnel “fast”, it will weaken the ability to deliver candidates who are “cheap” and “good”.
The more competitive the recruiting environment, the more acute these constraints become. No one gets what they want in all three Trilemma areas, especially when the unemployment rate is 4.3 percent.
There’s a cost to waiting the talent shortage out.
Generally, the issue with unfilled openings is that most employers are unwilling to make price and screening requirement (quality) concessions, therefore speed is sacrificed, leaving unfilled openings until there is a shift in the employment market.
Unfortunately, the decision to stick to our guns as a staffing company on price and screening standards is the most costly decision of all, as we shell out time-and-a-half in overtime to meet production, or production is simply missed altogether. With extremely limited resources, finding amazing people at record speeds at a low rate just isn’t happening.
Most employers have chosen the “wait it out” option, but at what cost? The speed of finding personnel has been so significantly affected in this tough recruiting environment that many employers have perpetual unfilled openings. There certainly is a cost to falling short of required staff-levels – overtime, lost production and burn-out – to name the most obvious.
How can we solve our labor needs in this constricted environment?
After the resourcefulness and dedication of your internal recruiting team and staffing partner have been verified, we need to move onto the scary question, “Why would people want to work here?”
It is time to get real – if I have an average environment, average pay, average opportunity and make no unique hiring accommodation, how can I expect to win in this recruiting environment? If I am below average in any of these categories without offsetting that weakness in another category, I’m in big trouble! Most staffing agencies are not helping matters because they are acting as though it is still 2012 and not doing any deep analysis either. We have gotten into this rut ourselves, only realizing the cycle we found ourselves in the beginning of 2017.
All isn’t lost.
This labor shortage challenge can certainly be overcome. With low unemployment and comparatively low labor participation rates, most of the workers desired are already working somewhere else. Keeping the Trilemma in mind, we must realize we have to entice these currently employed individuals to work out our company instead. It turns out there are three primary strategies we can use to attract talent.
We have partnered with several of our more progressive customers to objectively face the brutal reality of this recruiting environment and have adapted new recruiting strategies based on both the external and internal realities of their businesses. The companies who are willing to do what it takes, are winning the war for talent.
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