Tightening Labour Market

Saying that employing new employees and retaining present ones has become a nightmare, is putting it mildly. Any business owner or leader has today the lack of human resources at the top of his or her agenda and is likely spending a considerable amount of time on a daily basis to patch around this problem. Moreover, institutions like Identity Malta seem to be flooded with applications for foreign workers (mostly third country nationals) leading to a considerable increase in lead time to have these applications processed. Few seem to understand how critical it has become to have Identity Malta process these applications swiftly and for VISAS to be issued within an adequate timeframe.

This is not a Malta bound phenomenon. The below graphs clearly indicate that the labour market is tightening also across the whole of Europe. In 2014 there were on average 11 unemployed persons across Europe per job vacancy, today it is down to 3 unemployed persons per vacancy.

So it is should come at no surprise that companies in Malta are struggling to fill positions, sometimes even harder for unskilled workers. Many European source markets, like Italy or Spain from where until recent years, we used to source a number of workers, have today dried up as they are managing to find work in their home country.

This means that companies need to up their game to attract and retain good employees. Just doing what they always did, will not be enough. So it is time companies have a re-think about how they are running their businesses and think outside of the box. In some cases, radical ideas are needed. It could be that competing companies need to come together to devise a common approach to recruiting and maintaining employees and possible even go down the route of sharing certain costs, like for example training costs. Thinking out of the box, also includes looking at things never considered before. To mention an example, in the coming days I will be delivering some free training sessions on how the offering of private pension schemes can be a cost effective way of retaining the best talent in your business. The sessions will provide a costed model of how it is cheaper to retain employees by investing in a private pension scheme for employees, when one considers the huge cost of replacing good employees, if you manage at all. (Send me an email on silvan.mifsud@emcs.com.mt should you be interested to attend these sessions)

So, change needs to happen primarily at a mindset level. The long winding search for the perfect candidate will likely lead you nowhere. Whilst you are looking for the perfect candidate, competing companies have likely employed a good candidate with the right skills, experience, mindset and education that fits the bill. Moreover, I believe many companies give undue importance to skills. Skills have their importance but they can always be learnt. What is much more important is attitude and personality – making sure that the person is a team player and can fit the company culture. It is much better to spend time upskilling a person with technical skills than searching for the perfect candidate, never to find one.

Besides all the above, companies seem to forget that all they do or do not do, is communicating things to their present and future employees. So in such a tight labour market if you are still not replying to anyone that has applied for a job, you are still playing yesterday’s game. Doing so communicates that you are a weak employer and that your brand as an employer is shabby. What i am saying is simple – now more than ever you need to take care of your employer reputation.

Obviously, beyond all the above, the pay package remains an important consideration. However it is not the only consideration. Things like work flexibility, the work culture, benefits companies offer (like health insurance for example), possibility for learning and career advancement also have a role to play. Many times I see businesses having to rely on increasing wages to retain employees as they completely abandon working or improving on other things I mentioned. My point here is simple – give importance also to other aspects, other than salary. An increase in salary has a very short-term uplift for employees whilst other things are more likely to be appreciated for the longer term. This is why training your line managers in leadership, teamwork, communications and delegation is likely to help you retain your best employees…..and why investing in such training will save you from huge employee turnover costs.

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