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Since the 2008/2009 financial crisis, there has been an emergent skills gap that has plagued almost every industry. While organizations have implemented a series of measures to improve oversight of labor costs and value returns, they have focused more on improving the quality of talent acquisition than they have on sustaining employee performance.

In 2016, Aberdeen found that the skills gap represented a significant pressure to industry with the total percent increasing year over year. In Talent Acquisition Trends 2016: Candidates Take Command (June 2016), Aberdeen found that employers are taking a hard, strategic look at their hiring and performance management channels to make them more employee driven.

In a follow-up survey, Aberdeen concluded that as employers experience sustained pressure from the skills gap, they are increasingly turning to outside employment channels to resolve the issue. The survey showed that only 23% of Best-in-Class companies are focusing on hiring roughly equal amounts of employees internally as externally. The results also showed that 32% of Best-in-Class companies saw voluntary turnover increase 0–10% in the last 12 months and that 25% of Best-in-Class companies saw the rate of layoffs and firings increase 0–10% over the last 12 months. Accounting for the overlap between these data points, 48% of Best-in-Class companies saw significant increases in labor turnover year over year. The data is consistent with earlier findings that show companies being able to deliver only 67% of the leaders they will need in the coming three to five years.

The follow-up survey also reinforced that employers are turning to assessments to establish the qualities that define leaders and workforce participation in the context of management goals. Aberdeen found that Best-in-Class companies are 32% more likely than All Others (68% vs. 46%) to use assessments to establishment high-quality talent criteria. In the context of rising employee turnover, employers are rapidly shifting their labor criteria in short periods, churning up internal labor requirements that, on closer inspection, could at least partially be fulfilled internally.

In Is Proactive Hiring More Than a Mindset (August 2016), Aberdeen noted that as employers constantly redefine internal resource management criteria and turn to external candidates to widen the talent pipeline, they are losing the ability to drive greater productivity through routine reassessment of the internal workforce. In the meantime, they are basing criteria for high-quality candidates on the existing enterprise perpetuating the status quo and implementing high quality followers.

Charting the Way to Success

The current model for hiring places a lot of pressure on candidates to exceed expectations. In Talent Acquisition Trends 2016: Candidates Take Command (June 2016), Aberdeen found that 58% of organizations feel that the skills gap is depreciating workforce quality, resulting in their most significant talent challenge. In Is Proactive Hiring More Than a Mindset (August 2016), Aberdeen noted that building a corporate profile and putting candidates and employees in charge of their own destinies leaves career development open-ended and often unfulfilled. In fact, in a 2016 survey, the employee-centric approach backfired, in that 78% of Best-in-Class companies still see low levels of innovation as a top pressure facing their organizations.

Replacing the open-ended career development model with a combination of defined career development tracks and campaign-based rewards and innovation solutions can provide insight into the value of training the existing workforce.

To learn more, check out the full report, Bridging The Skills Gap, Taking the Internal Approach. 

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