With the tightest labor market the United States has seen in 50 years, and the average cost inflicted on employers for long-term job vacancies at more than $800,000 a year, HR departments are jostling for qualified candidates to meet labor requirements. But a persistent skills gap – and an unemployment rate hovering near 3% – is hitting businesses large and small.
Job openings have outnumbered Americans seeking work for the 13th straight month – there are 1.28 million more available jobs than unemployed people. Employers looking to fill open roles are in a bind. To fill vacancies maiming productivity, they need to find training programs that divert from traditional hiring pools.
These are three key aspects to look for when choosing a new talent acquisition program for your company.
Jump into new hiring pools
If your company is struggling to fill vacancies, it is time to shake up where you are looking for talent. Look beyond individuals from top colleges or those who fit the exact level of experience and education level you typically adhere to. In fact, many successful companies, like Apple and Google, no longer require employees to have college degrees at all. Journey towards individuals who aren’t a “cookie-cutter fit” or are otherwise overlooked, such as opportunity youth, military veterans, and their spouses. Find employees from the communities where your business has a presence.
I founded a nonprofit, Workforce Opportunity Services (WOS), to help Corporate America find this “hidden” talent. Through partnerships with organizations seeking to diversify their workforce, WOS develops and nurture the skills of talent from underserved communities. The idea came from a student who took my tech management course at Columbia University. We started a program helping individuals in Harlem, where almost a third of households had incomes below the federal poverty level, find and maintain jobs. It was free, and we were successful in finding people not just jobs, but careers. Research showed that the talent was there, they just needed the training, mentorship, and support, as well as self-confidence, to secure and hold onto their jobs.
Clear the path to success
Receiving more than just technical (hard-skills) training is imperative to success when comparing talent acquisition alternatives. Does the program remove barriers and clear the path to success for future employees? Those who go through the WOS program receive training in professionalism, business communications, and interpersonal skills. Employees need both hard and soft skills to succeed. They also receive health insurance and stipends as a part of the program. To invest in long-term success, our candidates must have their short-term financial needs met. To address this gap, WOS sometimes goes further to bridge the gaps of the economic divide. We’ve paid for WiFi so candidates can complete training courses at home, childcare to ensure the individual can make it to work or class, transportation stipends and college tuition, enabling individuals to get their bachelor degrees.
The cost of higher education has skyrocketed 213% in the past 30 years – it has become so cost prohibitive that its a luxury most simply cannot afford. Americans with a bachelor’s degree earned less in real terms than in 1990, diminishing its perceived value. Pivot once again and go back to basics. Utilize workforce development organizations that pair potential employees with one-off courses or boot camps specific to a skill set. In seeking talent to fill vacant IT positions, power company PSEG enlisted WOS’ expertise to find and develop talent from underserved communities in New York City.
The corporation and nonprofit are partnering with General Assembly to provide coding instruction, a $15,000 value per person, free of cost to nine individuals taking the course. Mohammad Khan, a 23-year-old from the Bronx, graduated from a high school with just an 18 percent graduation rate. He is now being trained to be an IT specialist for PSEG. Another participant, 24-year-old Amro Manaa, said his greatest barrier of entry to working in tech was the cost associated with learning to code.
Absorb the risk
Corporations are starved for good talent but they are resistant to risk. Every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average to replace them. They are hesitant to pour resources into a new employee they are unsure to be cut out for a corporate environment. That risk aversion to hiring out of the ordinary pool could be to the company’s peril.
A third-party training provider needs to first transform the talent to meet the needs of a potential employer and then absorb all of the risks of hiring a new employee, which can be accomplished by providing a trial period for each potential new hire. For the initial six to 12 months, the company itself does not employ the employee, rather the training organization is the official employer. The training provider administers the benefits, i.e. health insurance, additional professional development opportunities, and organizes a case manager to alleviate any HR situations and provide mentorship support. At the end of the trial period, the corporation can choose to hire the candidate as a full-time employee.
Hewlett-Packard (HP), one of the leading global software companies, started its partnership with WOS to recruit and train veterans for vacant IT roles. Upon the program’s completion, all participants, including the attrition reserve, were hired on full-time, with a 100 percent retention rate by the end of the first year. This program saved the software company $150,000 in new hire expenses.
Dr. Langer is the director of the Center for Technology Management at Columbia University and founder of Workforce Opportunity Services, a nonprofit committed to developing the skills of untapped talent from underserved and veteran communities through partnerships with organizations dedicated to diversifying their workforce. Learn more at wforce.org.