Success in scarcity: How to manage in a talent shortage

Job market

Employee retention

Compensation and benefits

Foster a culture of growth and development

Recognise and reward performance

Provide challenging and meaningful work

Provide competitive compensation and benefits

Enhance work-life balance

Buold strong relationships and trust

In today's highly competitive business landscape, the continuing talent shortage is an ongoing risk faced by organisations across various industries. With technological innovation freeing up the capacity of professional service employees to focus on strategic, analytical and interpersonal functions within a business, the impact of the talent short market is only becoming more pronounced. 

Talent shortages are not just an issue of recruiting the necessary skills to support corporate growth, but also a question of how to nurture and support existing skills within an organisation.

Nicole Gorton, director at Robert Half and workplace expert says “The issues that cause an employee to seek a new role elsewhere and the reasons an employee stays loyal to a company are two sides of the same coin. To manage in a talent shortage is the act of constantly re-acquiring your top talent by finding out what they are looking for in their role and building a strategy to get them there in order to make external competing offers less attractive by comparison. Ensuring that your existing workforce feels supported, engaged, and valued is critical in the war for talent when competition is fierce and the pool of talent to backfill a role is depleted.”

Despite the country's robust economy, the demand for skilled professionals often surpasses the available supply, leading to a talent shortage. This is tied to various structural forces across migration and mobility, education and the development of future-ready skills across the Australian workforce, and business growth and digital transformation efforts driving the creation of entirely new job functions. 

This shortage is particularly prevalent in high-demand sectors such as technology and finance, with an independent survey by Robert Half finding that 82% of Australian business leaders stating the competition for qualified talent has increased compared to 2022.

 Skills shortages are causing delays to key projects while product quality and customer service are also compromised. Indeed, the same research found that 7 in 10 companies experienced a negative financial impact due to not having the required skills in house.

Related: Discover more industry insights in Robert Half’s Salary Guide

Corporate growth

A talent shortage can impede a company's growth prospects. Without access to the right skills and expertise, businesses may struggle to meet increasing demands or capitalise on new opportunities. Projects can be delayed, leading to missed deadlines and potential revenue losses. Moreover, the inability to fulfil contract or project expectations due to a shortage of talent can damage a company's reputation and hinder future growth prospects.

Talent Attraction

Talent shortage puts businesses at a disadvantage when it comes to attracting new talent. Highly skilled professionals have options and with cost of living pressures mounting, tend to gravitate toward organisations that offer competitive salaries, benefits, and career advancement opportunities.

 In a talent shortage scenario, businesses that cannot compete in terms of compensation or fail to promote a compelling employer brand may struggle to attract top talent. The lack of a diverse and talented workforce can also make it difficult to create a dynamic and innovative work environment, further deterring potential candidates.

Retention

Retaining top talent becomes even more challenging during a talent shortage. Skilled employees are aware of their value in the market and can be more inclined to explore other opportunities. The risk of losing talented individuals to competitors increases, as they may receive more attractive offers elsewhere, and with hiring timelines and salary expectations higher than normal, replacing a vacant role is a resource intensive exercise for the business. 

Additionally, existing employees may become overwhelmed with increased workloads, leading to burnout and reduced job satisfaction which can further contribute to higher turnover rates.

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While Australia continues to navigate a sustained talent shortage, an immediate solution is not on the horizon. As well as exploring competitive talent acquisition strategies, business leaders also need to look at their own workforce and how to manage in a talent shortage in order to maximise their existing employees' impact and experience - or risk losing talent to competing offers. 

Foster a Culture of Growth and Development

Investing in the growth and development of existing team members to ensure sustained engagement and productivity. As well as ensuring employees receive a varied pipeline of work, consider opportunities for upskilling and continuous learning. This could include training programs, workshops, or certifications. 

Nicole says “By providing avenues for professional growth, you demonstrate your commitment to each employee's long-term success. This both bolsters their engagement and productivity, but critically in a talent short market, it also makes sure they know they can achieve career growth without changing roles.”

Recognise and Reward Performance

Acknowledging and appreciating the contributions of your team members can significantly enhance their motivation and engagement. Implement a robust performance management system that recognises exceptional work and provides timely feedback or consider implementing a rewards and recognition program that includes incentives, bonuses, or other forms of appreciation for high performers. 

“By creating a culture of recognition, you incentivise and actively place a value on individual achievement. This can be a big differentiator from competing offers which can struggle to articulate how they foster a culture of recognition, instead seeming purely focused on executional work,” says Nicole. 

EXPLORE MORE HIRING ADVICE

Provide Challenging and Meaningful Work

Skilled professionals thrive when they are given challenging and meaningful work that aligns with their skills and interests. Assign tasks that allow team members to leverage their expertise and take on responsibilities that stretch their abilities, or consider opportunities for the team to partner with other divisions of the business to broaden their expertise. 

By offering intellectually stimulating projects, you keep your team motivated, fulfilled, and less likely to look for change or challenge in another role.

Provide Competitive Compensation and Benefits

In a talent shortage, it is crucial to offer competitive compensation and benefits packages to retain your skilled professionals as companies are continually evolving their offer to compete in the market. 

Skilled talent receives competing job offers on a monthly, if not weekly basis, so companies need to adapt their remuneration and benefits program to combat this pressure. Businesses are advised to continually review and benchmark salaries to ensure they align with industry standards, rather than relying on a single annual review period. If matching salaries is an issue, consider additional incentives such as performance-based bonuses, profit-sharing programs, or flexible work arrangements. 

Provide comprehensive benefits packages that cater to the diverse needs of your team members, and ensure you have a suite of benefits on offer that can be tailored to individual needs. An excellent family leave program may be of less interest to a talented graduate or a highly experienced senior leader, so in order to manage in a talent shortage, it is important to understand and meet individual talent needs. 

Enhance Work-Life Balance

How a company supports work-life balance is variable, and often hard to gauge before beginning a role. Given this, creating a healthy work-life balance for your team members that allows personal and professional commitments to co-exist provides certainty for the employee that they cannot guarantee from a competition offer.

To achieve this, encourage flexible work arrangements, such as remote work or flexible hours, to accommodate personal commitments and individual preferences. Equally, promote a culture that respects boundaries and discourages overworking or burnout by discouraging emails on weekends or after hours.

Build Strong Relationships and Trust

Loyalty is one of the greatest barriers to turnover, so exceptional people management in a talent shortage hinges on strong relationships built on trust and mutual respect. Regularly engage with your team members through one-on-one meetings, team-building activities, or informal gatherings. Actively listen to their concerns, provide support, and address any issues promptly. Create an inclusive and supportive environment where individuals feel valued and connected. Strong relationships and trust foster loyalty and commitment, reducing the likelihood of your team members seeking opportunities elsewhere.

 Our experienced team of talent specialists are here to help. Contact us today. 

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