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Finding the best and brightest

By Marcia Passos Duffy

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Terry Phillips
Vice president
Robert Half International

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As the unemployment rate hovers around 2 percent for college-educated workers, it’s becoming increasingly difficult for businesses to find qualified candidates to fill job openings. As the competition for skilled labor heats up, workers are getting more assertive about asking for better compensation packages.

According to “The Employment Dynamics and Growth Expectations (EDGE) Report,” an annual study on employment and compensation trends conducted by Robert Half International and CareerBuilder.com, the majority (57 percent) of hiring managers polled said it was difficult to find qualified candidates a year ago; and 91 percent said it’s equally or more challenging today.

According to the survey — which polled more than 1,000 hiring managers and 900 workers — 58 percent of workers said they are more likely to negotiate a better compensation package today than 12 months ago, double the number from last year’s poll.

“This intense demand for qualified workers puts potential candidates at a distinct advantage, and they are realizing that they have strong negotiating power,” says Terry Phillips, vice president of Robert Half International in Akron, Ohio.

Smart Business spoke with Phillips about the rising concern over employers’ ability to fill open positions and some solutions to the current recruitment problem.

What is causing the hiring shortage?

There are two major factors: the impeding retirement of baby boomers and the increased demand for professionals with college degrees, because of the boon in the economy over the past several years, which allowed many businesses to expand. There is an increasing demand for professionals with certain skill sets, and less of a talent pool.

What particular skill sets are in the greatest demand, and why?

The greatest shortages are at the staff level in sales, customer service, information technology (IT) and accounting. These positions require more than two years of experience. The Sarbanes-Oxley mandate has a lot to do with the demand for accounting positions in public companies. But corporate governance affects all companies — private and public. In the accounting profession, we are still suffering from the fallout from the corporate scandals, which discouraged students from taking the accounting/finance route. That same scenario applies to the IT shortage. With the dot-com bust, fewer students were willing to go that route in their college studies. In other skill sets, the recent boon in the economy has led to a greater need for customer service and sales positions.

What does this mean for companies looking to fill spots?

Frankly, I see businesses getting less picky about candidates. This does not mean lowering standards, but if hiring managers are looking for candidates with two years experience, they will have to dig deeper into the pool of talent and opt for aptitude rather than experience. In other words, they will have to hire more entry-level workers who have just graduated from college than those who have been in the work force for several years.

What sales pitch should companies give to potential candidates?

Hiring managers need to talk to candidates more about careers rather than jobs.

They also need to stress the success of the organization, the growth potential in its market niche and the business’s past track record or success. The idea of making this kind of ‘sales pitch’ to candidates may be foreign to many companies, particularly those that are steadfast in the perception that there isn’t a talent shortage out there. And, indeed, some companies may not be seeing a shortage because these businesses have not had to hire because they are not growing. But companies that are on the fast track are all too aware of the shortage. All businesses need to understand the trends, and the pendulum has clearly swung in favor of the job candidates.

What should companies do to keep good employees?

Companies need to focus more on retention, which could mean more compensation and better perks, such as flex schedules and telecommuting. Interestingly, our survey did not see a rise in turnover from last year, so that leads us to believe that companies are waking up and beginning to implement good retention strategies. In fact, 31 percent of hiring managers we surveyed said their firms have instituted new policies and programs to increase staff retention rates in the last 12 months, including offering bonuses, increasing pay, improving the office environment and providing a more defined career path.

Hiring managers may want to rethink those retention efforts, however, and focus on things more closely related to work-life balance, since the top perks that workers said that would cause them to jump ship for another job are flexible schedules at 65 percent, telecommuting opportunities at 33 percent, employee stock purchase plans at 33 percent and on-site fitness facilities at 31 percent.

TERRY PHILLIPS is the vice president of Robert Half International in Akron, Ohio. Reach him at (330) 253-8367 or Terry.phillips@rhi.com. Robert Half International has more than 350 staffing locations in North America, Europe and the Asia-Pacific region, and offers online job search services at www.rhi.com.