Interestingly, upskilling and reskilling existing employees was the most popular answer. Educating current employees and redeploying them in new, relevant positions makes sense in many cases.
Existing employees already have valuable knowledge about the organization and industry compared with new hires. One open question is how extensive upskilling/reskilling efforts are required and what learning methods will be needed.
We believe that a significant proportion of the upskilling/reskilling activity will focus on technology and data related skills.
European organizations will also use other methods to make ends meet. The second most popular coping strategy is offering higher salaries, which we see practiced for positions where there is a confined resource pool and limited substitution options. Examples could be a certain trading specialist, a particular medical professional, etc.
Third place was hiring more recruiters and acquiring better recruiting tools, which is a reasonable strategy, especially in organizations where the recruiting function is understaffed and equipped with outdated software and/or processes.
Other popular strategies included widening the spectrum of applicable candidates, lowering criteria, and investing in better branding and candidate marketing.
Three-quarters of organizations deployed a combination of coping strategies. It means that organizations typically see these coping strategies in combination, as opposed as individual silver bullets. Please see Employee Shortage Coping Strategies in Europe (IDC #EUR150726123, June 2023) for more information.
What Are the Upsides from the Point of View of HCM and Payroll Application Vendors in Europe?
The tight labor market and recruiting difficulties among European organizations are in fact sweet music in the ears of many of the software vendors in the HCM space. The solution areas that are best positioned to capitalize on the employee attraction desires and approaches of European organizations are:
- eLearning solutions, learning services, reskilling strategy services. The stated intent to “reskill and upskill” can be achieved by different means, including onsite training, mentoring, and external education courses, learning technologies are also likely to play a key role. IDC believes that the reskilling/upskilling ambitions will trigger investments into more comprehensive eLearning technologies, as opposed to micro learning and social learning approaches.
- Recruiting solutions and services. Vendors of recruiting solutions and HCM suites with strong recruiting modules stand to benefit as do providers of talent acquisition services and recruiting agencies. Investing in such capability is almost mandatory, as the consequence of doing nothing and not being able to attract the required talent can be crippling for an organization.
- Skills mapping, skills management, and skills matching solutions. Upskilling and reskilling is a fine remedy, however, an overview of existing skills and skill gaps are prerequisite to invest in learning. In order to progress, an organization first needs a map – a skills map – to navigate and target investments.
- Temp staff providers, outsourced labor services. In some industries, such as healthcare and professional services, organizations will include contingent labor and external services as part of the solution to the lack of available labor resources.
- Marketing solutions related to candidate marketing and employer branding. In this age, the employees do not come flocking around employers. Rather, it is the other way around. Employers must target potential applicants on social media and build databases with passive candidate pools, and target these effectively. This requires marketing technology, and this opens a new target market for vendors of such solutions.