The top concern for CEOs in 2020 is hiring and retaining the most talented workers, according to a recent study. Hiring issues are now deemed more important than wage increases, cybersecurity and many other business matters.
There are several reasons that hiring as acquired such urgency. One is the tight labor market, with an unemployment rate under 4 percent. Another is the speed at which technology is advancing and affecting business practices. Companies need well educated, tech savvy employees to compete in today’s economy.
This has put more pressure on human resource departments to meet the more exacting demands. To attract job candidates, HR departments are adopting new strategies, treating applicants more like customers. It involves a big reorientation in how HR approaches its job.
Retention and Training
Workforce issues have also put a big emphasis on retention, where companies are making greater efforts to keep the workers they already have. And this in turn has made training a priority. Technology is advancing so quickly that companies cannot simply hire new people to keep up. They need to train the people they already have. This is especially true for IT companies.
And technology companies have indeed been spending more money on training. But from the data it is still difficult to determine how much training translates into increased retention. During the past recession, IT spending was lower than it is now, but retention was also higher.
As the economy improved, companies began spending more on IT training, but retention rates declined as well. From 2010 to 2013, turnover rates hovered around the 5.5 to 6.5 percent range, while IT spending was in the 3 to 4 percent range. But then in 2014, the turnover rate jumped to 9 percent, and companies responded by increasing spending on IT training to above 5 percent, which brought down the turnover rate to the 7 to 8 percent range.
Business experts are predicting that HR departments will increasingly incorporate AI into their operations to improve recruiting. AI will be used, for example, to determine pay and benefits, to calibrate health insurance benefits to an employee’s particular health profile, and to monitor online conversation to gauge employee satisfaction.