Each employee a company hires is an investment of both time and money. Understanding labor market data and the actionable insights from its analysis help narrow down the talent pool, thus, improving a company’s chances of hiring the right employees to attain long-term business objectives.
Locate the Right Talent Pool with Labor Market Data
When recruiters and human resources (HR) professionals align recruitment efforts with business objectives, it creates a more strategic approach to hiring. HR teams who utilize labor market and salary analyses are better equipped to predict and reduce turnover or anticipate when to ramp up recruitment efforts based on available talent supply. This information can be accessed from labor market reports, supply and demand forecasts and assessing trends during increased hiring and turnover.
Knowing current employee capabilities and the performance that comes from such, HR teams can target desired skill sets to build and optimize the talent pipeline. Recruitment efforts may warrant establishing connections with universities, professional associations and social media networking groups, as well as developing internal employees.
Searching for rare skill sets in tight labor market conditions requires HR pros and recruiters to do more than post a position online. For example, the local market may not have enough supply to meet the employer’s demand. In this case, HR will need to expand recruitment efforts into multiple markets. Conversely, when supply is tight, it puts job seekers in a powerful position to demand more salary. Understanding salary medians and the impact of supply and demand will better inform not only salary offers, but personnel budgets each year.
When HR departments understand the trends in their local area, they can prepare for labor shortages and better meet demand for specific skill sets. With insights into overall job gain and growth, population and education attainment, recruiters and businesses can adapt their growth strategies to the forecasted reality of their local labor market and economy. Labor market analytics software enables HR departments and business leaders to conveniently access and quickly apply this valuable data.
Optimize the Hiring Process with Workforce Analytics
The modern-day hiring process involves many data touchpoints. Also referred to as predictive analytics, workforce analytics helps recruiters and hiring managers gain valuable knowledge into which applicants will perform successfully in a role and be a good cultural fit. Screening tools, such as work experience surveys and trait or personal hardwiring assessments, help predict how well a candidate will fit into the company culture.
In addition to tracking applicants throughout the hiring process, workforce analytics software enables hiring managers to improve their candidate selections and better understand the timeframe to fill specific positions and pervasive skills shortages. According to the Harvard Business Review, external hires take three years to perform a job as well as internal hires, and it takes seven years for internal hires to earn as much as external hires.
With more insight into an employee’s performance and longevity, hiring managers can prevent the likelihood of a new employee exiting shortly after being hired. Over time, hiring employees who consistently contribute and want career longevity helps reduce costs associated with onboarding and training, and let’s face it, management’s time.
Business leaders also benefit from having access to the right solutions during the hiring process, such as salary answers to make competitive offers. Salary data becomes increasingly important, in a tight labor market, when employers have difficulty retaining valuable employees and talent for in-demand roles.
Data as a Useful Recruiting Tool
Incorporating data into recruitment and retention strategies offers multiple advantages to hiring managers and company leadership. When companies can anticipate changes to both the talent supply and the local economy, they can make more strategic decisions to both stabilize and grow their business.
Big data is here to stay. Companies that effectively incorporate labor market analysis data into their hiring and growth strategies will have the best chance of success.