The sustainable workforce: beyond the cost of an unfilled vacancy
Building a sustainable workforce today is a matter of developing manpower that can be both responsive and flexible with complex challenges and pressures within various working environments. So, how does a sustainable workforce look like?
It could be one in which retirements do not exceed 50% of the workforce based on a 5 to 10 year forecast. It may also be that a sustainable workforce provides the advanced skills to undergo enormous technological changes within industries that are continuously adapting to new market conditions. A sustainable workforce could be one that continuously supports the younger generation to acquire the desired skills set in order to meet specific job requirements. On the other hand, there is the question of industries being interesting or fulfilling enough to attract a sustainable workforce, ones that provide clear professional paths and opportunities for advancement. Moreover, a sustainable workforce today may not overlook the issues of former recessions that fundamentally affect the demand and supply of labor forces worldwide.
Dice Holdings INC., the career site publisher, provides a report on the mean vacancy duration by industry and time period, uncovering the fact that the time to fill a vacant position today has the longest duration since 2001. The monthly report reveals the fact that, on average, it took employers 24.9 working days to fill a vacancy, nine days longer than at the height of the recession in July 2009. A report from the Labor Department on Job Openings and Turnover showed that there are more job openings in the USA today than there were in February 2001. A total of 4.7 million job openings where recorded by the Department in June 2014. The number obviously reveals the fact that jobs are not filled. Instead, they remain open for a longer period of time.
The obvious question is: Why is this happening? Are we still collecting the remnants of a post-recession economy? Is today’s workforce the child of a depressed economy, that cannot answer to the workforce challenges of reviving national economies? It may be, that, to effectively design a sustainable workforce, we must first agree on the desired outcomes. Leaders worldwide should consider what a sustainable workforce looks like, not just in an ideal sense, but also in the context of limited budgets, sometimes adversarial labor relations and increasing patronage demands.
While many organizations justify the increasing time in filling their vacant positions by skill shortages and refusal of offered wage level, there may be other reasons to why the target of this performance indicator is constantly not met. One explanation is the “perfect candidate hypothesis” as formulated by Peter Capelli, Professor of Management and Director of the Center for Human Resources at Wharton. The hypothesis claims that companies are particularly demanding and unwilling to hire entry-level applicants who fall short of prior experience.
Researching the challenges foreign educated individuals face in finding high-skilled employment, the “Migration Policy Institute”, assesses the extent of “Brain Waste” in the international workforce. What does “brain waste” mean? It is defined as “the number of college educated immigrant and native born adults ages 25 and older who are either unemployed or have jobs that are significantly below their education and skill level”. In short, 23% of college-educated immigrants ages 25 and older in the US are affected by brain waste and 20% of college-educated immigrants with academic degree abroad work in low skilled jobs, compared to 12% of college-educated native born workers.
Some other causes of the increase in the time to fill a vacant position may gravitate around knowledge and skill gaps, both in current roles and cross-functionalities, lack of training and development capabilities, decreasing retention and engagement. Taking these factors into consideration, it is essential that organizations today address the need for an integrated approach to workforce sustainability.
The “Transit Cooperative Research Program Report 162”, sponsored by the Federal Transit Administration on behalf of the ‘Transportation research Board of the National Academies” provides a performance management approach on building a sustainable workforce in the public transportation industry. According to the report, a comprehensive and cohesive approach to a sustainable workforce focuses on four key organizational processes:
- Recruitment
- Retention
- Training and Development
- Professional capacity building
These processes are supported by widely formulated strategies providing key implementation steps and sample programs that actively acknowledge the importance of performance built frameworks. To evaluate workforce practices within each organizational process, separate scorecards are developed. These scorecards detail the performance of workforce practices by the using performance indicators. Throughout these scorecards, # Time to fill a vacant position is considered to be an important indicator because the cost of hire can be reduced by minimizing the amount of time a job position stays open.
The key performance indicator is reviewed separately for frontline and management/advisory/administrative/technical positions, because of its different impacts on recruitment costs and operational efficiency. Vacant frontline positions that are open for a long period of time can be the cause for remaining operators not meeting their schedule and load targets. Recruitment costs with management positions are higher, while specific technical and managerial skills make it harder for the recruitment process to be unsophisticated. Furthermore, the lack of managerial direction can leave frontline employees without guidance, which can, again, result in operational inefficiency.
Ultimately, # Time to fill a vacant position can be an important tracker of jobs that are most challenging to fill. The data provided by this indicator may encourage the development of initiatives to tackle existent recruitment challenges.
Human resources departments in every industry should invest the adequate time and money in order to understand the importance of a sustainable workforce. While building a sustainable workforce might seem an inefficient process of trial and error, blaming other factors for redundant internal processes can be an unfortunate mistake. Neglecting the effectiveness of workforce strategies can have an undeniable impact on future organizational performance.
References:
- Transportation Research Board (2013), Building a sustainable workforce in the public transportation industry: A system approach
- McHugh, M., Batalova, J. and Morawski, M. (2014), Brainwaste in the workforce: Select U.S. and state characteristics of college native-born and immigrant adults
- Zappe, J. (2014), Time to fill has longest duration since 2001
- Cappelli, P. (2012), Good People
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