The labour market is normalizing to a 6.8 percent unemployment rate in Canada, down from a high of 8.75 percent in the wake of the global recession. These improved conditions will make it harder for businesses to compete for skilled talent. As larger organizations open up their wallets again to attract workers, private companies will need to think harder about how they can differentiate themselves.
Fortunately, small and medium-sized organizations have several unique qualities that jobseekers value, including greater access to leadership, a more flexible work environment, and opportunities to connect across the entire company. Private company leaders will likely need to expand on these potential advantages in the coming months to secure the talent they need to grow.
The shrinking talent pool is creating wage pressures for private employers.
The shrinking talent pool is creating wage pressures for private employers. Our latest survey of mid-market executives found that nearly two-thirds plan to combat skills shortages by offering increased compensation in the year ahead.
Yet even while focused on finding new employees with the right skills, private companies must be careful not to neglect another key aspect of successful talent management: keeping the talent they already have. Job mobility is on the rise, and with it comes the risk that key personnel who aren’t sufficiently motivated or compensated may walk out the door.
“As always, the cost and effort required to retain talent is less than that required to recruit and train,” says Dominic Chow, a senior manager at Deloitte Consulting. “Private companies that recognize retention is a differentiating factor and prioritize their talent as an investment versus a cost will have an advantage as they manage their workforce.”
A recent survey found that employers that implement diversity and inclusion policies perform better than those that do not.
Although hard-pressed to outbid larger public companies in the war for talent, smaller private employers have other inherent advantages that will prove crucial to attracting and retaining skilled workers.
Without layers of bureaucracy to navigate, smaller firms typically offer closer access to company leaders, and their vision for the future. This makes such organizations less prone to issues stemming from culture and engagement, the number-one challenge cited by global organizations in Deloitte’s 2015 Human Capital Trends report.
As well, input from lower-level employees is much more likely to result in organizational change in a smaller business. And such employees can often see the direct impact of their contributions to the company’s success.
Still, with labour market conditions tightening up, this may not be enough to fill vacancies and keep existing employees from leaving. Private companies can further set themselves apart with better training and development programs. In fact, more than half the respondents in our latest mid-market survey plan to make an investment in training over the next 12 months.
Here, again, flatter organizations can potentially benefit by unleashing the power of their own experts, giving employees teaching roles rather than simply directing development programs from the HR suite. Leading employers are also creating on-demand learning opportunities by harnessing technology including digital learning tools, video offerings, and new cloud-based training systems to develop talent in a more customized way.
As private companies work to fill new positions, they can benefit by cultivating a diverse and inclusive workforce. A recent Bersin by Deloitte survey of 454 global organizations found that employers that implement diversity and inclusion policies perform better than those that do not, earning as much as 2.3 times higher cash flow per employee.