Labour Shortage or Talent Management Issue? How HRMS Bridges the Gap

There’s an ongoing narrative around a perceived labour shortage. Many organizations continue to find it challenging to fill open positions, leading to concerns about an insufficient pool of skilled workers. However, a closer analysis reveals that the issue might not necessarily be a lack of talent but rather the ability of businesses to attract and retain that talent. 

Do we have a labour shortage or a talent management problem? Regardless of the cause, HRMS can bridge the gap and help your organization manage the modern workforce and maximize its ability to find and keep the most qualified employees.

The Labour Shortage Myth

Since the aftermath of the pandemic, the news has been filled with stories about a global labour shortage. (We covered it, too, in this blog.) Indeed, in 2021, 47.9 million workers quit their jobs, followed by 50 million more in 2022. But the employment climate is changing rapidly, casting doubt on whether we’re still experiencing a labour shortage.

Consider this. There were at least two unemployed individuals with the necessary degree for every job vacancy requiring a university degree in the fourth quarter of last year. This doesn’t point to a shortage. And lest you think this statistic is just an anomaly, the number of unemployed individuals with a bachelor’s or higher degree exceeded the number of vacant positions every quarter from 2016 through 2022.

Add to this the new data from Statistics Canada that reveals the proportion of businesses expecting a shortage of labour to be an obstacle over the next three months saw a downward trend from 37.0% to 30.4% in the first quarter of 2023.

Make no mistake — many companies continue to struggle to fill open positions. With many roles staying vacant longer than usual, the easy conclusion is that there aren’t enough skilled workers available. But based on these recent statistics, there may be another reason for the vacancies. It seems that the talent is out there, but what might be lacking is the tools or the right environment to draw them in and keep them.

The Role of Modern HRMS/HCM in Addressing the Issue

There is no single, simple answer to the employment-related risks and challenges organizations experience. However, there are tangible ways to mitigate the risks and give yourself the best chance to conquer many — if not most — of those challenges. 

Human Resource Management Systems (HRMS) — also referred to as Human Capital Management (HCM) solutions offer businesses a competitive edge by helping to find qualified employees, streamlining HR operations, enhancing the employee experience, and providing analytical insights. 

Here are some of the ways HRMS can help:

  • Manage Top Talent

    Employee turnover is an underestimated cost for employers. The actual cost does not simply represent wages but also includes recruitment costs, loss of productivity, impact on team morale, new training costs, and other more subtle expenses. While the cost varies, some estimates put the cost of employee turnover at one-to-two times an employee’s annual salary.

    An HRMS/HCM application can help reduce turnover and fill open positions more efficiently by tapping into your existing labour pool. Your HR teams can more effectively match up people and positions, manage successions, identify your best performers, and maximize engagement with personalized training and development plans.

  • Streamline Operations

    Studies show that over 50% of an HR department’s time is spent processing data and answering questions. That leaves little time for the remaining myriad tasks a modern HR department is charged with.

    Automating routine HR tasks means your HR team can shift its focus from administrative duties to more strategic tasks. This could include planning for future workforce needs, improving employee training programs, or devising new strategies to boost employee retention. In addition, quick response times, seamless onboarding processes, employee self-service options, and efficient payroll systems will all make your company more appealing to potential employees.

  • Enhance Employee Experience

    Enhancing the employee experience directly affects retention rates. When employees feel heard, supported, and are given opportunities to grow, they're less likely to look for opportunities elsewhere. In addition, satisfied employees become brand ambassadors. They speak positively about the company to friends and family and on social media, further enhancing the company's reputation and attractiveness. Companies that prioritize their employees can leverage this as a competitive advantage in both the talent market and the broader business landscape.

    A state-of-the-art HRMS provides tools for continuous feedback, personalized training programs, and easy access to HR resources. When employees feel valued and have the tools to grow, they're more likely to stay — and stay engaged.

  • Make Data-Driven Decisions

    Modern HRMS solutions often come equipped with analytics tools. The tools allow HR teams to gather data on various aspects of workforce management, analyze trends, and make informed decisions. For instance, understanding patterns in employee absenteeism might lead to policy changes that better cater to the workforce's needs.

    With the analytical capabilities of modern HRMS, businesses can identify trends, understand employee needs, and predict future challenges. In turn, you can develop proactive solutions, reducing turnover rates and helping to attract top-tier talent.

  • Adapt to the Modern Workforce

    The modern workforce, especially younger generations, expect more than just a paycheck from their employers. They seek purpose, engagement, flexibility, and a positive work environment. Companies that fail to adapt to these values will find themselves struggling to attract and retain talent—as Millennials and Gen Zers make up a combined 44.7% of the workforce. Offering an enhanced experience aligns with these expectations and makes a company more appealing.

    By leveraging the power of HRMS, businesses can better meet and even exceed these expectations, positioning themselves as modern employers of choice.

While it may seem like we’re amid a labour shortage, the reality is more nuanced. There’s a wealth of talent out there, waiting for the right opportunity and environment. By embracing modern HRMS solutions, companies can enhance their appeal, ensuring they attract and retain the skilled workers they need to thrive. Reach out to our team to learn more about modern HRMS/HCM applications and how they can fit into your organization’s future.