Calif. Recruiting Woes Stem from Competition, Pay

By Roy Maurer Aug 31, 2016
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​More than two-thirds of employers in California reported recent difficulty recruiting for full-time jobs and attribute the reasons to competition from other employers and rejected compensation packages, according to a new research report from the Society for Human Resource Management (SHRM).

SHRM surveyed more than 3,300 HR professionals in February from various industries and company sizes, including 481 from California.

Seventy percent of the California respondents said that it's been hard to recruit for full-time positions over the previous 12 months, slightly more than the 68 percent of employers nationwide that said the same.

Some of the reasons behind the recruiting challenges in California are the same as reported nationally, such as candidates lacking the right work experience and technical skills. But Golden State respondents were more likely than employers from other states to report competition from other employers (56 percent vs. 49 percent), rejected compensation packages (28 percent vs. 23 percent), and candidates not being able to move to their local area (21 percent vs. 9 percent).

"I think the message for California employers is that they need to be very aware of their employer brand and what they offer job candidates, compared with their competitors," said Jennifer Schramm, SHRM-SCP, manager of workforce trends at SHRM. "While competition from other employers is a factor in and of itself, it also probably plays a role in job candidates' rejection of compensation packages. Applicants with in-demand skills in particular may believe they can secure a better salary elsewhere."

As for not being able to move to the area, Schramm suggested that some California employers could benefit from exploring remote working as an option, especially for hard-to-fill jobs. "They may also want to look into establishing new business locations in parts of the state where there is a strong local labor pool," she said.

Similar to U.S. organizations overall, the most difficult positions to fill in California were highly skilled medical roles, engineers and architects, and scientists and mathematicians.

California employers were more likely than U.S. employers overall to have had difficulty in the last 12 months filling full-time regular positions for managers (71 percent vs. 61 percent) and human resources professionals (54 percent vs. 42 percent).

Schramm noted that the challenges and unique opportunities in some industries and regions of California, such as Silicon Valley, may make it difficult to fill HR roles.

However, "while problems finding HR staff to fill key roles could have downsides such as lower HR-to-staff ratios, higher workload and fewer HR staff available to manage key functions, it could also represent an opportunity for HR professionals in California to seize new opportunities and rapidly move their way up the career ladder," she said.

Applicants Lack Basic, Applied Skills

More than one-half of California respondents (58 percent) reported basic skills or knowledge shortages among job applicants in the last 12 months, and most (84 percent) reported applied skills shortages.

Writing in English (32 percent), basic computer skills (24 percent) and speaking in English (20 percent) were the three most common basic skills lacking among job applicants in California, according to respondents.

The most commonly reported missing applied skills were critical thinking and problem-solving (48 percent), professionalism and work ethic (40 percent), and leadership (38 percent).

California employers said that organizational growth (56 percent), changing technology (51 percent) and changing customer/client expectations (49 percent) mean that new skills are required in the workplace. These new skills include soft skills, project management and training, and computer, web and IT skills. Overall, California employers were more likely than organizations nationwide to say they required new skills for a full-time regular position in the last 12 months.

Addressing the Skills Gap in California

Skills shortages are putting renewed emphasis on training. Although training is seen as valuable, one-third (33 percent) of California employers were operating without a training budget during the period surveyed. Of California employers who did have training budgets, 42 percent saw an increase in those budgets, 47 percent said their budgets remained stagnant, and 11 percent saw a decrease in training resources.

"The private sector must find creative ways to bring training back, including leveraging new technology," wrote Henry G. "Hank" Jackson, SHRM president and CEO, in a blog post. "Today, we have access to web-based tools—either free training systems or existing online courses—to teach new skills without employees ever leaving their desks or incurring major costs. Employer-provided educational assistance is also an important tool to continue developing our workforce," Jackson wrote.

Jackson also called for investment in vocational education and apprenticeships. "While a four-year college degree is seen as the primary entry point into today's workforce, focused vocational training and apprenticeships have been de-emphasized to a dangerous point," he wrote.

The survey found that HR professionals in California are not taking advantage of nontraditional sources for finding and developing talent. About one-third (32 percent) of organizations in California have used the public workforce system to post job openings or to participate in local job fairs. Only eight percent of California organizations provide or work in conjunction with registered apprenticeship programs. Another seven percent said they had created a customized apprenticeship program.

"This is precisely the kind of proven training that has built prosperity in the past," Jackson wrote. "Classrooms can only offer so much. Hands-on experience in a competitive work environment, under the tutelage of a professional, is not only valuable, it's necessary."

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