Employers face a “fierce” battle to attract and retain the highest skilled workers even though the supply of labor has grown considerably in the past two years, research from EY has found.
The latest quarterly report from the EY ITEM Club forecasts that unemployment will drop below 7 per cent in the first half of 2014, however, labour market growth is unlikely to alleviate demand for skilled people.
“Despite the labour market increasing by nearly one million people over the last two years, the demand for highly experienced, skilled talent has never been fiercer, particular within construction, high tech, professional and scientific industries which are growing rapidly,” said Stuart Steele, EY’s human capital partner.
He said that in an increasingly global economy, employers are forced to compete for talent with both their domestic and overseas counterparts. The labour market is far more mobile than it was 10 years ago, with employees more willing to change careers and location, putting employers at a disadvantage.
Outlining the challenges for HR professionals, Steele said: “We are seeing some companies building talent strategies that factor in high levels of staff tenure, with the expectation that employees may only stay for three to five years. The challenge for the HR director is to ensure that the organisation gets the best out of their people within their relatively short tenure. In these cases, the quality of the development experiences on offer can become more important, or at least as equally important as the remuneration packages on offer.
“At the other end of the spectrum, we are also seeing some leading organisations establishing partnerships with universities or other learning institutions to secure a pipeline of work ready candidates, with skills that are specific to their industry or even their company. There is a greater level of targeted investment.”
The report also highlights that the labour market is going through a period of major change. With older workers delaying retirement, increases in immigration and cuts to the government’s workforce, EY forecast that the supply of available workers will swell by further million in the next two years.
Steele said: “It’s clear that the labor market is rapidly changing. Policy makers and employers, across all sectors, will need to adapt and evolve their HR policies to keep pace, or risk losing out in the war for talent.”