The U.S. workforce is facing a critical moment of talent stagnation, marking a shift away from the disruption of The Great Resignation. Today, employers say they are struggling to fill limited open roles due to a lack of well-qualified applicants, meaning less new talent is coming into the fold. Meanwhile, workers are now looking to […]
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The U.S. workforce is facing a critical moment of talent stagnation, marking a shift away from the disruption of The Great Resignation. Today, employers say they are struggling to fill limited open roles due to a lack of well-qualified applicants, meaning less new talent is coming into the fold. Meanwhile, workers are now looking to stay and grow with their current employers, in contrast to the “free agent” mentality so many had in the pandemic era labor market. However, the workforce feels easily replaceable in their current roles due to the current economic environment, and they strongly believe that their company does not offer the upskilling and reskilling required for internal mobility.
These trends have been illuminated by the University of Phoenix Career Institute®, which annually surveys more than 5,000 adults and 500 employers across the U.S. on their sentiments regarding their careers, including their concerns, their challenges, and the degree to which they are optimistic for the future. The findings of the 2024 Career Optimism Index® indicate that in focusing efforts on external recruitment, employers are overlooking significant potential to skill and elevate their existing workforce to solve business needs, hindering progression for both workers and organizations.
With tightened budgets and growing economic uncertainty, employers are hiring fewer workers. The Career Optimism Index finds that a majority of companies (62%) have experienced slowed or declining growth over the past year, citing hiring freezes, layoffs, and restructuring as primary reasons. When companies do have the opportunity to hire in this landscape, it’s critical that they find candidates with skills that are a perfect match to meet their needs. However, many are struggling to find the right fit, with 44% saying that their top hiring challenge in the past year has been a lack of well-qualified applicants.
By prioritizing outside, highly skilled talent that doesn’t exist in the capacity business leaders currently need, these leaders are overlooking immense opportunities to leverage their existing workforce. These workers are eager to advance and acquire the skillsets employers seek to fortify their personal career paths and best serve businesses for the future.
Notably, the last year of layoffs, strikes, and economic uncertainty has caused tension for workers. In a major shift from The Great Resignation where workers held most of the labor market power, the Index finds that 42% of workers today are worried about losing their job due to a bad economy. What’s more, they are facing salary stagnation—38% say their salary has not increased at the same rate as inflation. This is compounded by the fact that 30% of workers say they don’t feel recognized by their company’s leadership for their contributions, further creating a divide between the workforce and their employers.
Considering these factors, workers do report a strong desire for growth. The majority of workers (74%) say they need to continue learning new skills to stay ahead in their career and most say if their company did more to upskill (66%) or reskill (65%) them and gave more opportunities to apply new skills (69%), they would be more likely to stay at their current organization throughout their career.
The Index reports that opportunities provided by employers in this space directly impact workers’ career outlooks. Workers are more likely to feel that they do not have the ability to advance in their career at their current job when their company does not provide a mentorship program (49%), skills development opportunities (55%), internal mobility (55%) or career path guidelines (53%).
There is a wide disconnect between employer perceptions of the career support they offer their workers, and the realities workers are experiencing within the workplace. According to the Career Optimism Index, 62% of employers say their company currently offers opportunities for internal mobility; however, only 36% of workers agree. What’s more, 90% of employers say their company provides workers with opportunities for career development, but only 69% of workers agree.
By providing clear and more flexible opportunities for their existing workforce to advance internally, employers can develop the skilled, dynamic talent they are seeking from within. In doing so, leaders can advance workers’ career ambitions, as well as their own business objectives, improving the overall strength of their organizations.
Key actions to accomplish this include:
Employers must consider how they can tap into their workers’ interests and skillsets to drive engagement and productivity, and in turn, improve business results.
Raghu Krishnaiah is chief operating officer for University of Phoenix, where he is instrumental in the transformation of the University and responsible for all operating strategy and results. As part of his responsibilities, Krishnaiah oversees all student academic, financial aid, enrollment, technology and career advising; corporate, tribal and community college relationships; product development; operational analytics; regional campuses; and business innovation.
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