Managing skills gaps and labor pool shortages

January 13, 2022 | 5 Mins David Daly

As we enter into a new year, HR managers and leadership teams at multinational companies around the world are working on strategies to tackle a growing problem around skills gaps and labor pool shortages within their international workforces.

A global pandemic has swept the world for the last two years and while we are slowly emerging from it, it is clear that it will leave behind legacy impacts on the way people work as well as their attitudes to job selection in the future. The nature of work is changing, remote and hybrid working has become the new normal, and there are clear indications that people are becoming a lot more selective when it comes to choosing a global employer.

Priorities have changed since the pandemic began and global employees around the world are now in a position to apply for jobs knowing that location is no longer a barrier to them receiving a job offer. This broadens their opportunities and allows them to be a lot more patient and selective when assessing if a role is right for them.

While this can be viewed as a positive in many ways, especially for individuals, it is manifesting as a wide-reaching problem for global employers who are struggling to fill a number of open vacancies and are also finding it increasingly difficult to locate specialized talent for specific roles within their organization. In this article we will examine some of the reasons why this situation has arisen and how HR managers can manage the skills gap.


The great resignation has created major skills gaps

One hugely influential feature of the global pandemic is the phenomenon that is the great resignation- essentially vast numbers of skilled workers decided to exit the international labor force to focus on personal priorities. Many others simply chose to leave their employers and secure another job because it was much easier to do so since location was no longer a factor in the interview process. These employees can work remotely so if they have the right level of skills, they have much less difficulty now sourcing a global employer who is willing to employ qualified candidates with the right skills full-time remotely. This was not the case before the global pandemic, so they simply stayed where they were.

“Well over 20 million people quit their jobs in the second half of 2021”

This staggering statistic from the U.S. jobs market shows that the result of all of this is a mass exodus from the labor market and huge skills gap shortages prevailing at multinational companies. These companies have not only lost existing global employees, but they now find themselves competing against companies thousands of miles away for talent. This was not a problem they could have anticipated before the pandemic struck-and there is really no precedent in place at any organization to respond to such an unexpected world event.

Nonetheless, this is now the situation they find themselves in and human resources leaders and managers are being asked difficult questions around why skills gaps and labor shortages are in evidence at their companies. They are also being tasked to put a plan in place to respond to this troublesome and worrying talent pool trend, and the solutions are not exactly clear and obvious.

Labor shortage problems

Many media reports have focused on significant to massive labor pool shortages across industries like agriculture, engineering, retail and hospitality. These shortages have also become evident in the corporate industry too as global organizations have struggled to fill job openings with many remaining open for longer than a year.

Sometimes multinational companies can be a little overly selective when it comes to finding the ideal candidate for a role, but in 2021, it became clear that the number of applicants for various different roles had shortened dramatically. Many who had exited the workforce have not yet chosen to return, while others who may have traditionally focused their job seeking efforts in the country in which they live, have now chosen to broaden their search internationally as a result of the huge increase in opportunities in remote working.

A good example is the IT industry where SaaS platform engineers and skilled DevOps workers have multiple global opportunities available to them thanks to their ability to work on digital platforms and deliver their duties remotely.  These employees do not need to tie themselves down to an employer in a specific country, they also know that their skill sets are in huge demand, so they find themselves in a much stronger bargaining position when it comes to seeking attractive employment contracts.  The result of this is a significant exodus of skilled workers from one country, e.g., UK and a subsequent drop in available labor in this country’s market. This makes it extremely difficult for global employers to get new products to market or respond to what the competition is doing. These employers have ambitious scaling plans but find themselves held back due to labor market shortage concerns and an inability to attract global employees in the volume in which they need them.

The HR response

As previously mentioned, there is no manual or playbook to refer to for a quick fix solution to this global problem. A great deal of patience is required because worker shortage trends like this cannot be reversed overnight. HR leaders need to spend time examining labor market trends and listening to the global workforce.

A good first step right now is working hard to retain the global staff you currently have.  There is no sense in making a bad talent shortage situation worse so anything that can be done to make your current workforce feel valued is worthwhile.  Generating employee loyalty is key to strong retention figures.

In 2022, there will likely be a lot of attention given to the employee experience, something which in previous years may have fallen into the category of ‘nice to have’, but now has become much more important as global companies cannot afford any mass exodus of employees, especially if it is preventable.

The employee experience ranges from salary and benefits, through to training programs and flexible working options, right up to child care incentives, mental health and well-being initiatives. But it needs to go beyond this if a global employer is to retain full-time existing staff and attract new job seekers, especially in the face of fierce competition in the labor market for new employees and new skills.

Making more digital resources available to a global workforce is one approach that some organizations are taking in an attempt to distinguish themselves in the employee experience space. Digital HR software that allows them to upskill and do more of the relevant training that can actually advance their careers is something that employees have said they value. They also appreciate 24/7 access that their payslips and payroll data so an employee self-service portal is also a good idea.

Digital platforms with portals designed to capture employee feedback is also helpful-HR managers cannot be expected to design a positive employee experience without hearing from and engaging with the actual employees. These platforms should be intuitive and very easy to use as well as being accessible on multiple different devices.

Another thing HR should be looking at is how to get employee experience advocates into the wider leadership team. HR alone cannot deliver an employee experience, it has to be embedded in company culture and follow a top-down process- so the C-suite team need to reference the value of the employee experience, and continuously demonstrate to the workforce that they are listening and engaged at all times. It’s a continuous and ongoing business process that requires time, effort and dedication. but history has shown that only this level of commitment can reverse a truly global trend.


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