Tight labour market: let’s rethink
Recruiting is a topic of particular interest today. Let us put this in a bigger picture: Malta has an unemployment rate of four per cent, leading to a tight labour market, and the nature of work is changing.
It has become an employee’s market. Companies are struggling to fill positions, many-a-times for both skilled and unskilled workers. Companies have realised that they are not the only game in town. There are a lot of companies competing for the same candidates.
As an employer, it is important to remember that there are good candidates out there, even when the labour market is so tight and employers should not compromise on their requirements. This will only solve a problem temporarily.
This shortage presents us with an opportunity to rethink our traditional habits. Companies may need to consider different ways to run businesses. There are radical ideas too. It may also be a time for companies to come together and share training costs and possibly also recruiting workers.
Attitude and behaviour vs skills
Recruiting strategies must change. Companies need to keep in mind that no perfect candidate exists. And even if so, we no longer have the luxury to look out for that perfect candidate: one who has the right skills, right experience, right education. While companies are looking for the perfect candidate, another company has already recruited a good candidate who fits the bill.
Skills remain important but skills can always be learnt throughout the employment. Companies need to start hiring for the fit – the cultural fit – meaning having the right attitude and personality for the company. This gives the opportunity for companies to invest less time in recruitment and more time in developing the new recruit’s skills. Potentially, employees will feel more recognised if this training investment is done by the company.
The employer brand
We no longer have the luxury to take our time in recruitment. I have heard of companies that spend over three months to take a decision to employ someone after having interviewed candidates. Not only are they giving other employers the chance to play game, but they are very likely not projecting a positive image of the company. This may lead to one being less likely to accept the employment offer.
It is, in fact, now time, more than ever before, to create a ‘good employer’ reputation. This is commonly known as the ‘employer brand’. It is this brand that will make companies stand out more than others. Nowadays, this is about portraying what your workplace culture is like, online. If a prospective employee knows that the company takes good care of its people, then the company has a greater chance of attracting the right candidates.
Higher salaries vs. imaginative benefits and perks
The labour market has also shown us an upward pressure on salaries, particular for specialised skills. This means that not only do employers need to pay more, but job seekers are being faced with numerous job offers with an attractive pay.
Pay, even though only a part of the job, remains an important factor. Job seekers are in a strong position and they may dictate the salary too. If we were to take the basic law of economics and apply it to human resources, then one can easily understand how this works. If the supply is high and the demand is low, employers can be more selective and can afford offering lower salaries. If, on the other hand, supply is low and demand is high, then employers may have no option but to raise their salaries. This, however, may only be a short-term advantage in a tight labour market.
The quality of the work environment, the flexibility one gets from working with a company and other perks are all starting to come into play. Pay may not necessarily be the main reason why an employee wants to change jobs. They would have sent in their application for other reasons – reputation, company culture or even possibly, the benefits the company offers.
However, with a little imagination, benefits can become as attractive as a high salary. The changing nature of work gives companies the opportunity to introduce perks such as flexitime. Other benefits may be offered such as job sharing or opportunities for career advancement. The cost of these benefits is lower than the cost of salary increases.
My message is to focus on other aspects, other than salary. It may be true that in some cases, paying employees more will make them happier, and happier employees will give more to their work. But, I do question if this is really a long-term vision, particularly in such a tight labour market.
This article featured in the Classified Section of The Sunday Times of Malta on 21 January 2018.
About the author
Maria Bartolo Zahra is Managing Director and HR Advisor at SurgeAdvisory. She has over fifteen years of human resources and business advisory experience.