WORKFORCE DECISION-MAKERS REACT TO MIXED ECONOMIC SIGNALS
Restricted vs Expanded Hiring
52% of surveyed companies implemented hiring freezes, while 49% are encouraging employees who left to rejoin, according to a recent report by Josh Bersin.
Decreasing vs Increasing Compensation
46% are reducing sign-on bonuses, while 64% are increasing compensation, according to the same report.
Prioritizing Hiring
54% of CFOs in a Gartner survey cite hiring and retaining workers as a top challenge.
Cutting Costs
35% cited cutting costs, and 35% cited forecasting as their main challenges in the same study.
Trying to create hiring plans based on big-picture assumptions about the economy and workforce can be frustrating. Instead, build for flexibility, and the TA function can adjust to the changes that will inevitably arrive.
Workforce agility is a priority.
Many internal TA teams focus on hiring needs based on past requirements, compensation, costs and recruiting practices. Today, however, the types and sources of skills in demand may change quickly. When considering talent solutions to support recruiting and contingent workforce management, companies are prioritizing scalability and breadth of capability as fundamental needs for a successful partnership.
Project-RPO offers a responsive option for specific talent goals.
Sometimes, new demands or changing conditions require support that can be applied quickly and efficiently to directly address near-term talent needs. Project-based recruitment process outsourcing (RPO) is one example of a solution uniquely suited to deliver on that demand. Whether staffing a new location, supporting a hiring initiative, or establishing a best practice for acquiring certain skill sets, a project solution can bring the best practices and resources to deliver on specific talent goals.
UNCERTAINTY CREATES AN IMPACT ON THE UK LABOR MARKET
Hard-to-fill roles remain an issue
Nearly half of companies (47%) have vacancies defined as hard-to-fill, up slightly from 45% in Q1. As a result, companies continue to focus their TA priorities on tackling hard-to-fill roles.
Steady hiring intentions
The CIPD outlook showed that 41% of respondents planned to increase staff levels while only 7% intended to decrease staff. Even as this figure changes and staff expansion levels of, the competition for available talent will likely remain strong.
Getting flexible in solving
hiring challenges
In response to hiring and retention challenges, companies are taking new measures to meet demand, including upskilling current staff (41%), advertising jobs as flexible (35%), raising wages (29%) and hiring more apprentices (26%).
The challenges of a complex labor market are causing employers to re-examine both their internal talent functions and their external partnerships, including those with RPO and MSP providers. Recently Sevenstep examined rising expectations for talent solutions in the UK and across EMEA. Experience in the region points to several priorities that should shape expectations for the TA function and supporting solutions.
Improve visibility to see ahead.
A highly adaptable data and analytics platform should be a central resource in a solutions provider's arsenal for driving change, setting strategy and steering processes. Innovation in analytics technology makes the difference between drowning in numbers and identifying the best actions for the desired outcome.
Create access to an extended TA capability set.
An RPO or MSP partner must provide resources and capabilities positioned to deploy on demand and deliver on specific needs. Resources must be more than simply larger numbers of people; they must be people trained in the fields, skills and talent types being sought.
Move from HR goals to business goals.
Hiring a role quickly may indicate solid performance, but identifying a way to limit the hiring need by reducing turnover is a path of business impact. By understanding desired outcomes, an effective solutions partner can help reduce the hiring burden and enable the organization to navigate the region's labor market challenges.
EMPLOYERS ENHANCE THEIR FOCUS ON SKILLS, NOT DEGREES
More than half of HR professionals (56%) apply skills assessments as part of the hiring process, and 79% value the results of those assessments more than other criteria, such as years of experience. This data comes from research released in August by the Society for Human Resource Management (SHRM).
The term Skilled Through Alternative Routes (STARs) has recently gained visibility as non-profit organizations and employers seek paths to understand and engage overlooked talent with in-demand skills. One organization estimates that 32 million STARs in the US have skills that qualify them for higher-wage work than their current jobs offer. Related data suggests many implications employers should consider, including:
Potential workforce supply: One study found that 50% of the US workforce does not have a college degree, but 69% of new jobs between 2012 and 2019 require a bachelor's degree or higher to apply. Removing degree requirements can dramatically expand access to workers.
Persistent barriers: The same study found that the percentage of STARs holding jobs that provided career gateways to advancement for their skills fell from 54% to 46%, and more than 7 million such jobs were lost to them due to increasing demands for college degrees. There is room to open the door to STARs at the entry-level.
A positive trend: The door to opportunity is quietly opening as employers slowly remove degree requirements from their jobs. Jobs advertised on LinkedIn not requiring degrees rose from 15% in 2020 to 20% in 2022. Reaching out to STARs can yield a competitive advantage in securing talent.
Increasing business focus: One Deloitte survey found that 60% of surveyed business executives valued the concept of "fractionalized work" in which workers flexibly flowed to work and tasks based on their skills. Rethinking an organization's approach to work may help open more opportunities to STARs with vital skills.
Rethink roles and skills
Re-defining resource needs by skill instead of traditional role requirements and educational demands is no small task. But the case for doing so is compelling, as skills-based requirements can often open a role to high-quality talent that may otherwise not apply. Organizations are not only reconsidering requirements for established positions, but in more advanced cases, they may consider breaking up and reinventing roles based on how skills are applied.
Adapt the tech stack
The applicant tracking system (ATS) can be a significant barrier to STAR talent, as it may be set up to reject applications quickly based on educational requirements. While the technology itself is not at fault, and adjusting education requirements will fix the issue, the tech stack is important to recognize as the gateway to the application process.
Cast a wider net for talent
When college degrees are removed from job requirements, organizations can focus on sources for talent through paths such as apprenticeships, certifications, and competitive programming "boot camps" and competitions. Internal mobility and employee upskilling are also strong sources of talent for skills-based roles.
COMPANIES AND WORKERS CONTINUE TO EMBRACE INDEPENDENT AND CONTINGENT WORK
High value talent
In the McKinsey study, more than a third of surveyed employed respondents who earn more than $150,000 per year describe themselves as independent workers.
Worker Optimism
Roughly 45% of independents with bachelor's degrees expect economic growth compared to only 35% of the broader employee workforce — a positive outlook at least on par with permanent employees.
Challenges for Workers
Only 32% of flexible workers receive health insurance from their employer. They are 1.5 times more likely to feel the need to pursue training to advance their career, and 62% would prefer to work as permanent employees.
While over two decades have passed since enterprise contingent workforce strategies supported by Managed Services Providers (MSPs) have become mainstream, spending on non-employee talent often remains siloed by department or location. With that in mind, more organizations are stepping up their approach to better engage flexible workers and the agencies that supply them.
Create an enterprise approach to the non-employee workforce. One priority of the MSP is to expand visibility into the universe of contractors and contingent workers and their agencies across the enterprise. This view creates opportunities for significant improvements in cost, speed, and quality of talent.
Keep all options open when considering hires. The best resource for that permanent role may prove to be a contractor, so do not let preconceived rules get in the way. In practice, an MSP or a total talent partner (covering both permanent employees and contingent workers) can provide the technology and processes for breaking the boundaries that stand in the way of talent engagement.
Stay active in measuring impact and refining processes. Contingent workforce suppliers, freelancers and independent contractors all have unique entry points into an organization's work process. Tracking how they are engaged, how they perform, and how they are budgeted requires a committed management effort. A specialized MSP is well-suited to deliver on this demand.
HEALTHCARE ORGANIZATIONS ADJUST TO WORKER SHORTAGES AND RISING COSTS
Nursing Shortage
Losing Workers
Growing Employment
Rising Labor Costs
A successful talent strategy starts with workforce intelligence. In an October 2022 healthcare event, Noelle Paras, Vice President of Client Services for Sevenstep joined Jeff Lackey, founder of JKL Advisors and former head of talent acquisition at a major US healthcare leader. Together, they explored the role of predictive analytics and talent intelligence in a successful pandemic response. The lessons learned during the 2020-21 period provide a blueprint for the future. Areas of priority include:
Create visibility into the talent supply.
During the pandemic, the talent function at the healthcare organization could pinpoint all worker types aligned to specific roles and qualifications, including permanent, contract, and geography. This visibility continues to play a role in the company's right-talent, right-time, right-cost strategy.
Understand the available TA resources.
A clear view of resources enables the TA team to flex and scale quickly through capacity planning, leveraging what is needed to achieve outcomes on time and at cost. RPO recruiters, internal teams, and contractor staffing all contribute to success.
Measure TA performance in detail.
The organizations prioritized measuring progress and addressing issues as the pandemic unfolded. The effort was made possible because traditional quarterly reporting had been replaced with accurate daily and weekly data around time to fill, efficiency, quality, retention, satisfaction and, importantly, candidate feedback. Today, that same capability enables the company to identify and act quickly on every opportunity to improve performance.
THE NEED FOR WORKFORCE INTELLIGENCE DRIVES TALENT TECH INNOVATION 
Increasing investment
73% of companies have increased their investment in talent technology since 2021
Unsure returns on technology
Only half of the surveyed companies have measured the ROI of their technology investments
A hunger for meaningful data
67% of TA and HR professionals are not providing hiring managers with the right data to make decisions, and only 32% of senior leaders are confident in their data to support their strategies
Artificial intelligence is part of the innovation landscape that offers the ability to address the demand for meaningful data. Many technology innovations utilize AI and analytics, but few have applied new capabilities in a way that can offer a predictive view of data and performance.
Sevenstep's proprietary Sevayo® Insights platform has tackled that predictive analytics opportunity and serves as an example of the core capabilities organizations should demand from their talent technology. Data aggregation, analysis and predictive analytics are keys to success.
Aggregate and analyze data from all channels.
Smarter decision-making begins by bringing together all data sources into a common view. Sevayo® Insights applies a robust unified data model – along with a modern, flexible data pipeline – to do just that. Sources of input range across the entire talent ecosystem, including recruitment marketing platforms (CRM), applicant tracking systems (ATS), human resource information systems (HRIS), learning management systems, and public employment data.
Apply predictive analytics to create informed, forward-looking decisions.
An upcoming report from Sevenstep and Aptitude Research further explores the process of talent technology innovation, and AI and predictive analytics is a key part of the story. Specifically, predictive analytics is breaking the cycle of reactive decision-making and emerging as the new foundation of strategic talent acquisition and the future of the TA tech stack.
