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A Struggle to Find Skilled Staff is Not a Skills Shortage

75% of Australian SMEs and large businesses are struggling to find skilled staff, according to survey results released this week. An immediate reaction to these figures might be to blame the Great Australian Skills Shortage.  Plenty of research has shown a skills shortage does exist, in certain sectors. But results like this don’t prove it. A ‘struggle to find skilled staff’ does not equal a skills shortage.

A skills shortage is an external problem. Something we can blame on government policy, universities, or a 2-speed economy. That can make it an easy excuse. The harder option is to look internally at the areas businesses can control. And there are plenty. Here are 2 obvious levers employers can use to reduce their struggle finding skilled staff:

Improved retention of existing staff.

I hate to state the obvious. But the same survey results show most businesses are not doing enough to retain their existing talent. Keeping your current staff engaged reduces the need to tap the market for new people. Duh? Well, seems this is easier said than done:

  • +75% of SMEs say that written reviews and development plans are critical to keeping staff engaged. BUT…
  • Only 35% have actually written and implemented clear reviews and development plans for every employee over the past 12 months.

Retention is a complex topic with solutions that differ for many businesses. But I suspect most employers have a pretty good sense for what can drive it in their business. These results indicate the initial challenge might not be identifying the ‘how’, but actually doing something about it.

There is one option many businesses seem to be relying on: trying to buy their way to better retention and engagement. While in some cases, income can be a driver of employee engagement, studies also show it can be less important than intrinsic rewards. Most of us intuitively know this from our own experience.

However, over 60% of SMEs report increasing pay levels for their employees, despite only 40% of staff beginning to make more wage demands. I’ll bet at least some of these proactive wage increases are an attempt by employers to buy better retention. This might work in the short term, but it’s not a sustainable strategy.

For regular tips and ideas on improving employee engagement, Anthony Sork is a great source.

Improved recruitment processes.

Just because businesses struggle to find skilled staff doesn’t mean they don’t exist. We see a number of employers falling for this assumption. They might advertise a role themselves. After 2 weeks, the response has been poor or completely mismatched to the profile they’re targeting. It’s logical to conclude the right candidate just isn’t out there.

A good proportion of our early client projects have involved situations like this. And you know what? In all cases, the ‘right’ candidates have been out there. The employers just weren’t looking in the right places.

A recruiter with 10 year’s experience has an eye for these things. Often all it takes is a few tweaks to the wording of a job ad, an adjustment of the role description or categorisation, or sourcing in a few different channels. Simple steps when driven by someone who’s done it for years. Less simple or obvious to most business owners working through it alone.

Do you need a recruiter to improve recruitment in your business? Not necessarily. But in each of these situations, it’s been the difference between an employer cursing the lack of skilled staff in the market, and having the right candidate starting on Monday.

Does your business struggle to find skilled staff? What other factors would help in your situation?


Source: Sage MicroPay SME Business Sentiment Index 2011

Cofounder and CEO at RecruitLoop. Previously with McKinsey. Passionate about startups, health and technology. Surf when I can; ride a bike most days. Follow me @mboverell.

  • Great post. There’s a lot of interesting work around on whether skills shortages are actually perceived skill shortages, and come down to recruitment difficulties, poor job definition, and poor recruitment techniques. We certainly do not have a labour shortage, given that despite low unemployment, the actual participation rate is low and many people would happily work more hours if given the choice.

  • Thanks for the comments Karalyn, I think you’re spot on. Now I’m not suggesting employers are doing a ‘bad job’ in all the areas you list. More that these are often outside their core areas of expertise. But, unlike say legal or accounting work, where the need for a specialist is clear (or compulsory!), the soft stuff can appear much easier to try to hack out internally. 

    This is particularly true when the cost-benefit of (eg) using a professional recruiter or HR consultant can be hard to justify. We’re trying to change that equation, and make the case for SME employers to engage experts in these areas much more compelling and affordable.

  • Kate Southam

    Enjoyed your post. Agree shortages of certain skills do not equate to a labour shortage and the low unemployment figure doesn’t include people who are unemployed but don’t register  so misses lots of people.

    When I had the Ask Kate email service I would brace myself after a run of “skills shortage” headlines as I would get an avalanche of emails from people with the skills on the list who were job hunting but couldn’t get work.

    Now with people finding in jobs in ever increasing ways it would be a challenge to target the right candidate audience. 

    • Thanks for your comments Kate. I agree in some cases it’s becoming harder to target the right candidate audience. This is a big factor in the emergence of niche job boards and networking sites, which I believe will start to play a bigger part in the local employment scene.

      Look forward to connecting further.