American companies have typically focused on specific job requirements when hiring employees. Requirements such as degrees, certifications, and relevant experience generally headline job ads. However, the focus shifts to hiring for soft skills during times of labor shortages.
So, what does it mean to hire for soft skills?
Labor shortages mean a limited supply of qualified workers for specific jobs or roles. These shortages are not uncommon. They can result from several factors such as economic upswings, fast market expansions, or shifting trends in the workplace. Consequently, companies must shift their focus to the skills that enable workers to succeed. Soft skills such as communication, emotional intelligence and adaptability allow employees to succeed even when they lack a college degree or so-called relevant experience.
However, labor shortages are not the only reason to focus on hiring for soft skills. Soft skills allow companies to become more adept at adjusting to changing situations and shifting trends. The more companies focus on soft skills, the better their chances at quickly adapting to new workplace trends.
To fully grasp the need to rethink job requirements to focus on soft skills, one must first understand the reasons that drive the need, that is, adapting to changing circumstances regardless of the specific factors driving them.
Main Takeaways:
• Several factors cause labor shortages. These factors range from internally driven ones to externally caused ones.
• Labor shortages force companies to rethink job requirements to suit changing needs and trends.
• Rethinking job requirements means going beyond traditional job requirements to focus on the importance of soft skills in the modern workplace.
What causes labor shortages?
There are several reasons why labor shortages occur. These reasons may be internally driven, while others may be wholly external. Here is a breakdown of the driving forces behind labor shortages.
Economic Upswings
Companies’ outlook shifts positively when the economy emerges from a downturn (i.e., recession). Therefore, investment in capital and labor expands. This expansion leads companies to fill new positions as needs dictate. The ensuing labor shortage stems from companies demanding workers in a short timeframe. This situation is particularly noticeable in highly skilled and professional positions. For instance, the early to mid-80s saw a labor shortage as developed economies emerged from the economic downturn of the late 70s.
Rapid Market Expansion
Rapid market expansions such as the tech boom of the late 80s and 90s led to the creation of thousands of new jobs. As a result, tech companies scrambled to find skilled workers in the tech sector. This 1998 article provides 20/20 hindsight into how companies and governments reacted to the serious labor shortage in the tech industry.
Government Benefits
In times of economic downturn, governments can step in to help unemployed workers with expanded benefits. As benefits help offset unemployed workers’ living expenses, going back to work no longer seems appealing.
How so?
Expanded government benefits allow workers to sit back and pay their bills without leaving their homes. The COVID19 pandemic provided a specific example of how government benefits can keep workers from actively seeking employment. One study showed that roughly 11% of unemployed Americans say that stimulus checks have enabled them to be far more selective in the type of employment they seek. Moreover, 9% of unemployed individuals stated they earned more from stimulus checks than by working. Approximately 10% of unemployed folks would prefer to delay going back to work thanks to expanded government benefits.
Psychological factors
Various psychological factors motivate workers to seek employment. However, detrimental factors can also keep workers from actively pursuing employment. Such factors include situations like unfulfilling careers, stressful work environments, lack of diversity, or a lack of company engagement. A 2017 Gallup poll found that roughly 70% of Americans weren’t engaged in their current position. The poll concludes that “we need to transform our workplace cultures.” Indeed, this insight underscores the pressing need to rethink job requirements.
Rethinking Job Requirements
Companies have reached a point where they must rethink traditional job requirements before they become outdated. Degrees and experiences merely represent a part of the equation. Consequently, companies must think outside the box to find the right talent to suit their specific needs. Moreover, companies must also rethink their job requirements to suit shifting workplace trends, economic changes, and their markets’ demands. Companies must look toward changing trends unless they risk falling behind. Playing catchup can then become an extremely difficult game to win.
Businesses must also understand what is out there. Having unrealistic expectations can often lead to serious consequences. For instance, companies expecting to find highly qualified workers may soon wake up to a nightmare. The shortage of skilled employees may leave companies with three options: pay more for what they want (higher salaries), adjust their expectations (rethink job requirements), or do nothing.
Companies that can afford to absorb higher wages might be inclined to throw money at the problem. However, not all businesses can afford to pay more. This reality forces companies to adjust their expectations. Adjusting expectations means rethinking job requirements to suit company needs within financial limitations.
Lastly, doing nothing is the worst possible approach. Companies that choose to buy their heads in the sand may become buried forever.
Hiring for Soft Skills
When companies adjust their expectations, they generally look beyond the traditional job requirements (i.e., degrees, certifications, experience, credentials). Thus, soft skills become a significant consideration for businesses looking to find the best talent out there within their financial means.
So, why are soft skills important for companies?
Soft skills allow businesses to find employees that match their philosophy. In doing so, companies ensure that their vision is present throughout their operations. Focusing on soft skills also facilitates employee retention due to increased engagement with core values, workplace culture, and company vision. In short, matching soft skills to a company’s overall philosophy ensures greater engagement leading to improved performance.
Please bear in mind that employees either have soft skills or do not. Unlike hard skills, soft skills are very hard to train. In some instances, they cannot be trained at all. Therefore, finding the right combination of soft skills requires careful attention to a company’s specific philosophy and core values.
Relevant Soft Skills
There are four soft skills that are currently in high demand. These soft skills enable workers to fit in their environment while being successful easily. Ultimately, these soft skills enable workers to pursue the hard skills required to excel in their current positions.
1. Emotional Intelligence (EQ)
EQ refers to the ability to identify and handle emotions. While EQ is not necessarily an innate trait, it requires a long time and maturity to develop. Employees that can manage their emotions effectively provide stability in the workplace. Maturity stems from awareness. As a result, emotionally intelligent employees make great leaders (managers, supervisors, or coordinators).
2. Leadership Skills
Like EQ, leadership skills take time and maturity to develop. Often, great leaders have the ability to learn from their mistakes. High EQ helps leaders understand the people around them. Consequently, they know how to engage people effectively. In particular, two skills highlight a great leader: listening and communication skills. Employees with great leadership abilities often climb their respective career ladders much faster than those without them.
3. Critical Thinking Skills
There is an abundant discussion about critical thinking skills. However, this soft skill is extremely difficult to teach. Modern educational methods encourage developing critical thinking skills. Nevertheless, it takes a long time for individuals to develop critical thinking abilities fully. In particular, critical thinking has a significant application: problem-solving. In today’s world, solving problems can mean the difference between a run-of-the-mill company and an outstanding one.
4. Adaptable to Change
Change is constant. It happens whether anyone likes it or not. Therefore, adapting to change is crucial for individuals and organizations to master. Like other soft skills, it is nearly impossible to teach. Adaptability generally stems from experience, maturity, and reasoning. Adapting means understanding what change is and how to solve new challenges. In short, it is about the survival of the most flexible (not necessarily the fittest). Highly adaptable employees can use their critical thinking skills to adjust their approach to suit new circumstances. The employees and companies that can better adapt to change are likeliest to endure significant turbulence.
How Can TalentZök Help Match the Right Workers with the Right Companies?
At TalentZök, we understand the value of soft skills and their importance in the business world. Therefore, we are adept at identifying the key competencies companies need to thrive in a changing business environment. Let us help you find the right people for your organization. We are certain the right people, with the right soft skills, will help your business reach its aims.
This post is made available for informational purposes only to provide a general understanding of the topics discussed herein. It is not intended to provide specific business, legal, or professional advice and should not be relied on as such. TalentZök is not liable or responsible for any damage or loss arising from any reliance placed on such materials.
