5 Ways Savvy Organizations Are Evolving Their Talent Strategies

The current shortage of talent in the labor market, combined with the volatile state of the economy, has created rising challenges for organizations to navigate, especially when it comes to the effectiveness of their hiring strategies. More than ever companies need to ensure they are keeping hiring effective, and attrition rates low.

In this blog post we are going to discuss five ways forward-thinking organizations are adjusting their talent strategies to address their needs more effectively, while keeping costs down and remaining flexible in an unpredictable labor market and economy. 

1.  Focusing Hiring on Mission-Critical Roles 

According to Magnit’s latest Labor Market Report, hiring volumes earlier in the year were down overall, but varied significantly depending on the role. Recent Magnit data shows this trend continuing, with hiring volumes for the month ending August 2023 down nearly 10% overall compared to the prior period, but surging for some job categories.

For example, hiring in supporting functions like administrative/clerical and HR has decreased, while a focus on core business imperatives and innovation has driven a rise in hiring of more than 50% for engineering and creative roles. In many cases, organizations are leaning into advancements in technology and AI to automate roles where they can.

While using contingent workers to strategically fill key positions during a downturn is a smart approach, companies should also be on the lookout for a return to high demand that will make the hiring landscape even more competitive. To stay ahead of the curve, businesses should be re-evaluating their compensation packages and flexible work arrangements, as well as utilizing business intel tools to find previously untapped pools of talent.

Learn more about key shifts in hiring. 

2. Utilizing Skills-based Hiring

Skills-based hiring, or hiring based on skills rather than education or experience, is becoming a key differentiator for companies. While a topic of conversation for years in HR circles, recent advancements in skills assessment technology have accelerated this approach. According to Deloitte, 98% of executives are now planning to work toward becoming skills-based and 90% are experimenting with skills-based approaches. And with benefits such as expanded talent pools, improved retention, faster fill times and increased diversity, it’s easy to see why this is such an appealing new approach to finding talent.

Besides finding highly skilled talent easier by opening up new and more diverse talent pools, companies can save on resources by hiring internally as well. By understanding which workers are coming off assignments and cross-referencing their skills to the skills they need to fill, companies can save on hiring costs, retain top talent, improve worker loyalty, and reduce the risk of losing top talent to competitors. 

Learn about the four critical steps for deploying a skills-based approach to talent sourcing and retention in our blog post.

3. Strategically Hiring Less Experienced Talent     

One potential application of skills-based hiring involves reevaluating the skills that are really needed for certain positions and investigating the potential advantages in reducing that required experience. Not only does this approach potentially enable organizations to save on both cost to hire as well as the worker’s compensation while still finding the right talent, it can also help draw in fresh talent to the organization.

However, companies that are considering this approach should carefully consider the additional associated costs they could incur like higher turnover and decreased productivity. To help mitigate these risks, organizations should foster a culture of continuous learning and development and leverage talent intel to make well-informed hiring and talent management decisions based on data-driven insights and market trends.

Learn more about how your organization can tap into five-star data to capitalize on worker quality and savings opportunities in our white paper. 

4. Leveraging Talent Landscaping to Optimize Cost and Talent Pools    

If you could hire anywhere in the world, how would you do so to strike the perfect balance between quality, cost and speed? To help answer this question, forward-thinking organizations are taking a data-first approach. They are investing in up-to-date labor market data, so they can utilize those insights to find the best talent at the right rate. Additionally, while some businesses are considering going back to the office, savvy organizations are keeping flexible work arrangements and work-from-home options, since they give them a competitive advantage, widen their talent pools, and keep hiring costs down.

Hiring in new locations also means navigating new regulatory guidelines, so it’s also recommended that as companies expand to hiring on a global scale, they consider partnering with an Employer of Record (EOR) organization, as it will help them remain compliant across locations, reduce risk to the business, and expand the business with more flexibility. Learn more about EORs and how to find the right EOR partner in our blog post.  

5. Leveraging Direct-Sourcing Strategies    

Tapping into self-identified talent networks is one of the most effective ways to fill open requests, but it can be challenging to curate and manage these talent pools. Done right, direct sourcing combines data, technology and services and enables companies to leverage their brand in attracting top talent and curate engaged talent communities. In addition, direct sourcing can help organizations save on hiring costs as well as fill talent needs faster via AI-driven candidate matching and skills assessments, allowing companies to expand their talent pools, make better hiring decisions and keep talent retention high.

Learn more about how your organization can leverage its brand and direct sourcing to attract highly skilled talent in our blog post.

Companies are facing unforeseen challenges due to the volatility of economic and labor market conditions. But investing in advanced business intelligence tools and market data, establishing partnerships, and carefully re-evaluating their current hiring strategies can empower them to find the right talent while staying agile in the face of change.

For more insights on the latest developments in the labor market, download our Labor Market Report.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.