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Businesses are fighting a skills shortage.
Over the subsequent 20 years, our working age population goes to shrink by on average 25 per cent.
Those lakes for talent will just keep getting smaller and smaller.
They’re facing two massive shifts, a rapidly ageing population with fewer young people entering the workforce and the rise of generative AI. I’m going to take a look at the lengths employers are going to so as to secure the perfect candidates. If recruitment is broken, what are businesses doing to repair it?
I’m Isabel Berwick. I host the FT’s Working It podcast, and I write a newsletter in regards to the workplace. In this series, I’ll explore among the most pressing issues around the longer term of labor and check with senior leaders about how they’re making work higher.
How do you navigate the tensions that you just come across as a frontrunner?
Recruiters are struggling. The numbers of applicants for nearly every job have gone up sharply. And finding the perfect person for the role from 1000’s of applicants is a large time commitment for hiring managers. AI-driven recruitment is creating an arms race on either side. Are we at risk of losing the human from human capital?
This is the conundrum, is not it? That you might have 100, 1,000 applications for every job, and yet they can not recruit. And there are gaps, partly driven by technology typically, makes it very easy to use. So I feel you might have more applicants, however the talent that you just want continues to be as thinly spread as ever.
Take the legal industry in the mean time. We’ve seen the arrival of American law firms. And they’re battling over those people. So they’re battling with money. People who’ve come out of their training contract being offered salaries. We’ve heard of £150,000, £180,000 a yr, whereas the UK firms were probably still pretty good at 60,000 to 80,000 originally.
The much publicised high salaries for young lawyers are an outlier. But law is not the only sector where businesses must fight for the highest candidates. There are talent shortages across many industries, especially as many older, expert and highly qualified staff leave the workforce. Unretirement is one in every of the most important trends in recruitment straight away.
So I went to fulfill Lyndsey Simpson, founder and CEO of the 55/Redefined Group, which works with big corporations, helping them to draw and keep talented people of their 50s and beyond.
There are three key problems related to recruitment and an ageing population. The very first one is that individuals aren’t having enough sex. Or in the event that they are having sex, they are not having babies as the tip results of that. And so we now find ourselves, in most western economies, with the bottom birth rates on record, which suggests that over the subsequent 20 years, our working age population goes to shrink by on average 25 per cent.
So 16 to 60-year-olds shrink. Whereas the over 60s population grows at over 40 per cent in that very same time zone. So if we proceed to recruit youth and early talent, then A, that pool is getting one per cent, two per cent shrinker yearly.
What role are over 50s going to be playing in workforces?
It’s an actual big shift in the subsequent five years. So between now and 2030, 50 per cent of the workforce can be aged 50 or over.
50 per cent?
50 per cent by 2030 within the UK, and over that in parts of Asia and other territories, and just shy of that within the US. That’s staggering.
So are people work you with more concerned with leveraging the abilities of their existing workforce, perhaps benefiting from people who find themselves over 50? Or are they all in favour of plugging those talent gaps by recruiting older people?
I’d say 95 per cent were solving a really clear business problem. So in case your infrastructure, or your utilities, or you might have mainframe engineers, all kinds of sectors are reliant on skills, actuaries, where there may be no one under the age of fifty for at the very least a great 20 years coming through. And so the challenge is now to increase people’s careers by 10, 20 years and find latest and intriguing ways to work with people in order that they’ll extend their profession.
Lyndsey Simpson and other recruitment specialists have tapped into a robust pool of talent that is been ignored. And she highlighted the problems that industries like accountancy are facing, with growing and retaining the talent mandatory to do the job. Many employers have yet to utilise the over 50s recruitment market. Why? They can see the market is awash in people applying for jobs.
Employers and recruiters I’ve spoke to are frankly overwhelmed by the sheer variety of CVs coming through. There’s this sea of sameness where recruiters are seeing the identical phrases coming up in job applications and in CVs. Job seekers are using AI in any respect stages of the method. From the moment that they discover a job that they wish to apply for, sometimes shown to them by AI on a platform like LinkedIn or Indeed.
Then they get that job description and so they can paste it right into a chatbot like ChatGPT. They can ask it to put in writing an application for them, write a canopy letter, improve their CV, after which they simply copy and paste it back in. Employers and recruiters, they’re saying they are not actually seeing many good candidates using AI.
Some of them are saying due to AI, we’re not going to do cover letters and CVs anymore. We’re going to do something else. Because we just cannot trust them. Others are saying, should you use AI, we’ll immediately throw it out. And over at the opposite end of the spectrum are, should you like, we have talked to games corporations who say, yeah, use AI, because we use it at work.
A large choice of applicants to take a look at is great for an employer. What is not so great is that AI tools have lowered the barriers to application. It’s now much less effort than it was once. A recent poll found 45 per cent of applicants had used generative AI to construct or improve their CVs. Finding the best talented people can sometimes appear to be a hopeless task for overwhelmed hiring managers.
International electronics company Siemens has found an modern alternative path to discover the candidates best matched to their vacancies.
I feel my business is a extremely nice microcosm of every part that’s difficult on the market around skills for the longer term. We still need great people to are available and safely use spanners and screwdrivers to repair grey boxes. But then we’re also moving into an era where those grey boxes will connect and we’ll create digital solutions from the info that those grey boxes provide, plus a layer on top of that around keeping that secure through cybersecurity.
So we have an incredible period of workforce transformation. We almost have this absolute perfect storm, hence why those lakes for talent will just keep getting smaller and smaller. Often, the standard of the candidates were lower than we might been used to prior to now. We were also going through a process where we might get people all the way through to the tip of the hiring process. And they’d receive a greater offer from another person. So it was just becoming an increasing number of difficult.
In our industry, where people’s experiences is extremely valued and never actually not rejected, that CV holds a number of kudos. We decided, look, we want to do something a little bit bit different.
By teaming up with a recruitment company called Arctic Shores, which uses AI-powered and task-based psychometric assessments, Siemens is now recruiting for some roles on aptitude quite than qualifications and specific experience.
What’s been incredible is that we have expanded our pool of talent. And that is a pool of talent outside of the standard industry. We’ve got a really clear set of behaviours that work in our organisation. And I can now find people who’s behaviours match that to enrich what we’re attempting to do.
But I’m also encouraged by, when someone’s been with us two years, they’ve passed through and so they’re moving on to a unique role either inside Siemens and sometimes outside. I feel that is how the workforce is moving towards, that job for all times, nevertheless form of romantic that sounds, I’m unsure it’s there. And with future generations, the identical.
But should you get the behaviours right, then there may be a way more likelihood that they are going to progress inside the organisation because they’re fit and their value that they are adding and we’re giving them, it’s symbiotic through the journey.
We just do not have enough individuals with the abilities. So it’s how do you assess any individual for those transferable skills and capabilities? That signifies that they might be really, really good for a few of these roles that we’re struggling to fill. And we just need to take a look at the talent pool differently.
Combining neuroscience and psychology principles, Arctic Shores has created numerous tasks that rating candidates based on how they think and learn. The company believes that AI utilized in this fashion can predict how a person will reach a specific job. I invited its co-founder and CEO, Robert Newry, to the FT’s offices to see it for myself. Candidates have to finish numerous interactive, non-job related tasks, and are scored on how they approach them.
So your task here is to trial a brand new security system. And the concept around that’s we would like to see the way you approach it, and as things get harder, the way you adapt your behaviour. Good. You’re on the second. This was the one where, oh, you simply got it.
Oh, I did?
You did. You’re now to the third one, so it’s getting hard.
OK. Oh.
So what did I pick up from the best way that you just approach this? You’re any individual that grasps something quickly. And once you have grasped it, you desire to get stuck straight into it.
So you will have the ability to identify the people who find themselves incredibly impatient.
Some tasks, you would like people to be really, really focused and to take time to do it. Other things, they must think really fast on their feet, traders, sales roles. So you really want them to be barely impatient. So that is the great thing about this.
So, Robert, what is the difference between me doing this and the way that applies to a recruiter or a specific job and me sending in my CV?
This is on the crux of the challenge that we have got in the mean time within the recruitment process. Because in a CV, as we’ve here, you are just going to be searching through a bunch of words, very subjective, stuffed with bias and flaws.
Talk me through what they’re telling us and what they are not telling us. This looks like a LinkedIn profile.
Exactly. Yeah. But ultimately, you either got the experience in here or you have not. And that is what a recruiter is searching for. And very often, individuals are just putting key words in there because they know that…
web optimization, data analytics, you may just throw…
You can just throw those words out. Nobody’s got a way of validating against. So then what happens. This was a story that went on Reddit and LinkedIn. Angelina Lee, she got no interviews based on her standard CV. So she amended it simply to put big brand names in there. But what else do you notice Isabel from her CV in there?
Spread herpes STD to 60 per cent of intern team. Connected with Reid Hoffman on LinkedIn and slid within the DMs.
Slid within the DMs. You’d have thought that that will just be a red flag in there.
And she’s quite impressive, fraternity record for many vodka shots in a single night.
So what number of interviews do you’re thinking that she would have gotten by putting that in there in comparison with her normal CV?
I’m hoping none.
She got a ten times increase. She got a 90 per cent acceptance rate for interview despite having that in there in comparison with a real CV because she hadn’t any of the large company experience.
Wow.
So employers, recruiters, and online job sites, all of them use AI and have been using AI for a while. The way that employers and recruiters are using AI is to sift through applications. So that may be setting a particular thing that they wish to filter out. So should you’ve been to school, they’ll include you. If you have not, they will not. And they’ll detect that on a CV within the text.
This has been shown to be quite effective, but perhaps it isn’t one of the simplest ways of telling who the perfect candidate is. AI is trained on the info that we’ve on the planet. And a number of the info that we’ve is biased. It perpetuates inequalities in society that we have already got. And that is something that may catch employers off guard as well, because they’re setting certain metrics based on the job. But they may not anticipate how the algorithm will work. And the algorithm might prefer certain kinds of candidates over one other.
We ask employers yearly, so what are you doing to evaluate applicants? And even today, CV cover letter comes out at like 90 per cent plus. Employers are generally risk-averse since it’s a giant bet whenever you recruit any individual. A, you have spent a number of time within the means of recruiting. Then you are going to put a number of, well, possibly money, possibly just time into training. And you might have plans that they will be here, well, 4 or five, possibly more years. So it’s a giant investment.
I’m unsure businesses are attempting harder to get the perfect talent. I feel they are attempting equally hard, but limiting themselves to, let’s be honest here, that these are the people we all know. We should take a look at everyone after which assess people on, well, are you able to do the job? Have you bought the attitude that we would like? I feel they’re being pushed into it by the younger generation and variety and EDI quite right.
But they’re also realising that is a great thing to do, because actually, if you might have diverse or a big selection of voices within the room, you really improve results.
I expect in one other three to 5 years we’ll see a number of corporations utilise artificial intelligence to be sure that they’ll attract and retain the perfect talent.
I went to go to Swiss pharmaceutical company Novartis on its giant campus in Basel to see the way it is approaching the recruitment crisis. Like many businesses, Novartis incorporates AI in its hiring processes. What makes it stand out is that corporate leaders have invested in AI that may boost the variety of internal moves by its existing workforce.
I feel the most important challenges that we face is an actual shortage of talent with specific skill sets. And so we actually thought quite a bit about it. And we actually got here to the conclusion we want to do much more for the individuals who we’ve in order that we are able to really develop and retain them.
Novartis has created a platform called Talent Match that pairs its staff to other opportunities across the organisation based on their skills and interests.
So I do know a number of corporations are beginning to think quite a bit more structurally about internal ability. You’re a bit ahead of the sport. What are the advantages of it? And are you able to quantify how much money you are saving on external recruitment?
One key profit for us is enhanced engagement of our employees. We know that when people have access to opportunities, they’re more engaged. And we staff greater than 500 projects through our employees. And it helped us to grasp greater than 50 million productivity. That’s a number of money which you could then reinvest back into research and development. As we see that things are changing really quickly in how we operate, we may also post opportunities in latest parts of the organisation and reallocate people far more quickly.
What I liked about this approach at Novartis is that it gives staff the prospect to review their skills. Based on what a person says about their ambitions, the AI will tell them what training and skills they still need to amass before they’re a match for his or her dream job. What’s secret is that this type of approach is scalable, replicable, and can only get easier as AI gets higher at its job.
So the barrier to entry of applying for jobs has got even lower. The trick goes to be finding something that welcomes the widest group of applicants that you just want, but is sufficient to say, do you actually meet these criteria? Do you actually think you may do that? The criteria being about these attitudes that you will exhibit whenever you get here.
The recruitment industry goes through a process in the mean time where they’re learning the best way to use AI from the employer side as well to their advantage and maybe save time, perhaps make things easier. And one other thing I feel it has been doing within the recruitment sector is absolutely making employers and recruiters pause and think, is a CV or an application necessarily the perfect solution to determine who is sweet for the job? Are there other metrics we might be using?
The tech we use at work is changing so quickly that bosses and staff cannot sustain. But some employers can and are doing higher at using AI to seek out latest hires with the best skills, or to deploy training that may upskill existing staff. We need more of that in future if recruiters are to seek out and hire the best talent.
But humans don’t change. And we also must keep the human touch if we’re to repair the crisis in our recruitment pipelines. AI cannot do all of it.
