STUDY SHOWS ALABAMA NARROWING SKILLS GAP WHILE MAKING STRIDES IN SKILLS BASED HIRING
Second Alabama Statewide Survey of Employer Talent Dynamics
The Governor’s Office of Education and Workforce Transformation and Alabama Workforce Council conducted the second Alabama Statewide Survey of Employer Talent Dynamics, which surveyed employers hiring practices (including interest in skills-based hiring), human capital development and training practices, and the nature of challenges related to hiring and employee retention. The survey was conducted by Cygnal between September 16 and September 26, 2021, with a survey sample size of 314 Alabama employers. The survey was a follow up from the first Alabama Statewide Survey of Employer Talent Dynamics, which was conducted between April 26 and May 2, 2021. Responses were collected through an online panel via a secure survey link distributed to employers by Alabama trade associations.
Progress Against the Skills Gap
About 75 percent of responding employers plan to add new jobs in the next six months (compared to 73 percent in May), and 86 percent of responding employers are having trouble finding skilled candidates (compared to 84 percent in May). The main reasons cited for not being able to find employees were a lack of applicants in general (September: 25 percent / May: 30 percent) and applicants who lack the skills the job requires (September: 35 percent / May: 32 percent). Some reasons to be optimistic include the fact that, in May, respondents who planned on adding jobs were split between ‘definitely yes” and “probably yes” (37 percent each) but now more are in the “definitely yes” and less are in the “probably yes” categories (48 percent “definitely yes,” 31 percent “probably yes”). Additionally, in May, more respondents were having a great deal of trouble finding good candidates (33 percent “great trouble” and 28 percent “some trouble”) but now a plurality are only having “some trouble” (30 percent “great trouble” and 36 percent “some trouble”).
The Increasing Popularity of Skills-Based Hiring
Like in May, 83 percent of companies review the skills, education, and qualifications of their incumbent workforce before developing job descriptions for open positions. For both the May and September surveys, 93 percent of organizations with 100-999 employees indicated that they use skills-based hiring practices. For the May survey, 56 percent of organizations did not require a degree for jobs in which 25 percent or more of the current workforce does not have a degree (39 percent did). Those numbers are nearly even now, with 45 percent requiring a degree and 50 percent not doing so. Like in May, only a quarter of companies with fewer than 20 employees require a degree for jobs in which 25 percent or more of the current workforce does not have a degree. This number increases precipitously for companies with 20 or more employees (44 percent – 69 percent).
The number of respondents who would prefer to hire a candidate with a great deal of relevant experience or skills but no college degree has also increased (September: 74 percent / May: 68 percent), as has its intensity. In September, 6 percent more respondents say they would hire the candidate with a great deal of relevant experience or skills but no college degree (September: 45 percent / May: 39 percent) over a candidate with a degree but little to no experience or skills.
While almost everyone is familiar with skills-based hiring (September 87 percent / May: 79 percent), only 29 percent of organizations always use it. Most respondents say they use it most of the time (52 percent). Like in May, large companies are more likely to use it than smaller ones. The percentage of organizations who always use competency statements in their job descriptions has increased from 26 percent to 32 percent. The percentage who use competency statements in their job descriptions most of the time has remained steady (September: 47 percent / May: 48 percent). Since these practices are linked, using competency statements in job descriptions and skills-based hiring are more common among large organizations. Both practices are very popular with senior management. The percentage of respondents who are not currently using skills- and competency-based job descriptions but would be interested in developing them if they could save their organization time and/or money has increased 12 percent since May (September: 74 percent / May: 62 percent).
Growing Interest in Ready to Work
More than half of respondents are “very familiar” (30 percent) or “somewhat familiar” (36 percent) familiar with the Ready to Work program (May 24 percent “very familiar”, 35 percent “somewhat familiar”). Respondents without a college degree, low-income earners, rural respondents, white respondents, and respondents from organizations with fewer than 100 employees are less familiar with the program than their counterparts. There is reason to be optimistic, since 91 percent of respondents believe the Ready to Work program adds, or could add, value to their workforce, including 80 percent of respondents who are not at all familiar with it and 90 percent of respondents who are not very familiar with it. The most interested respondent groups are people under age 50, college-educated respondents, high-income earners, suburbanites, minorities, senior management, HR managers, and respondents from organizations with 500 or more employees.