The Ongoing Impact of the Recession—California Recruiting and Skill Gaps

SHRM Survey Findings: The Ongoing Impact of the
Recession—California Recruiting and Skill Gaps

April 18, 2013

Introduction

• This is part two (recruiting and skill gaps) of the California results from a series of SHRM
survey findings about the ongoing impact of the U.S. and global recession, which began in
2007. California and U.S. results are compared, and statistically significant differences are
indicated with an asterisk (*).

• Part one results (financial health and hiring) includes the following sections:
 Organizations’ financial health.
 Hiring.
 Creating completely new positions.
 Demographics.

• Part two results (recruiting and skill gaps) includes the following sections:
 Recruiting challenges.
 Skill gaps.
 Recruiting strategies.
 The Impact of strategic technological changes.
 Demographics.

• Overall and industry-specific results can be found on our website at www.shrm.org/surveys.

The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013 2

Recruiting Challenges


Key Findings: Recruiting Challenges
California

• Is it difficult to recruit for positions requiring new and different skill sets? More than two-
thirds (70%) of organizations reported it was somewhat or very difficult to recruit for
completely new positions or positions with new duties added that required new and
different skill sets.
• Is recruiting for specific jobs difficult in the current labor market? Nearly two-thirds (65%) of
organizations currently hiring full-time staff indicated that they are having a difficult time
recruiting for specific job openings.
• Why are organizations experiencing difficulty hiring qualified candidates? One-half (50%)
of organizations indicated that candidates do not have the right skills for the job, and 42%
said candidates do not have the right work experience. Over one-third (38%) reported
that qualified candidates are not within their organization’s salary or hourly price range,
and 34% cited competition from other employers as a reason for difficulty in hiring.
• Are organizations facing global competition for applicants for hard-to-fill jobs? Seventeen
percent of organizations believe they are facing global competition for qualified
applicants for jobs they are having difficulty filling.


Implications for HR: Recruiting Challenges
California

• Recruiting difficulty may be here to stay for the foreseeable future. With more than two-thirds
(70%) of organizations reporting some level of recruiting difficulty for completely new positions or
positions with new duties added that required new and different skill sets, many organizations are
having trouble filling some key vacancies. Nearly two-thirds (65%) of organizations currently hiring
full-time staff indicated that they are having a difficult time recruiting for specific job openings.
With large numbers of Baby Boomers poised to exit the labor market through retirement, more
positions could open up, making recruiting even more challenging.
• With the retirement of the Baby Boomers, organizations may have to get more comfortable hiring
employees with fewer years of experience to fill some jobs. One-half (50%) of organizations
indicated that candidates do not have the right skills for the job, and 42% said candidates do not
have the right work experience. Though employees within the Generation X demographic may
have acquired enough years of experience to replace the Baby Boomers, this generation is much
too small to replace the Baby Boomers completely. As a result, organizations may have to fill
some roles with less experienced Millennials.
• Wage inflation could begin to occur for hard-to-fill jobs. SHRM data have shown new-hire
compensation rates as relatively flat over the previous five years (see the SHRM LINE® survey at
www.shrm.org/line for more on this), but this may be changing as the need to fill vacancies
grows. Over one-third (38%) reported that qualified candidates are not within their organization’s
salary or hourly price range, and 34% cited competition from other employers as a reason for
difficulty in hiring. In the case of hard-to-fill jobs, organizations may need to reconfigure budgets
to enable them to offer the competitive compensation packages needed to recruit and retain
employees with the needed skills and experience.

Implications for HR: Recruiting Challenges
(continued)California

• Global competition for skilled and educated employees is likely to increase in the years
ahead. Although currently only 17% of organizations believe they are facing global
competition for qualified applicants for jobs they are having difficulty filling, as working-age
populations around the world shrink, competition for qualified workers is likely to grow.
Larger organizations especially could increase their numbers of hires from outside the U.S.
Businesses in the STEM (science, technology, engineering and math) fields are also likely to
look outside U.S. borders for the needed workers, as is already occurring in the high-tech
industry.

• Over the next several years, many organizations will focus on improving their recruiting
processes as a way to deal with greater challenges in filling jobs. More dollars set aside for
recruiting are likely to lead to even more investments in expanding advertising efforts while
organizations will also hone their use of social media to find passive job seekers.

• In the longer term, many organizations may have to boost their training investments to
build qualified talent from within. Lack of qualifications and competition for talent are
among the top reasons HR professionals give for difficulty hiring qualified full-time
employees; training existing employees can help more of them qualify for hard-to-fill jobs
and also acts as a retention tool.


For the new full-time regular positions being created by your organization
that require new and different skill sets, how easy or difficult do you think it
will be or has it been thus far to find qualified individuals for those positions?
California

5%
Very easy
4%

25%
Somewhat easy California
33%
(n = 150)

United States
59% (n = 852)
Somewhat difficult
53%

11%
Very difficult
10%

Note: Only respondents whose organizations were hiring full-time staff for positions with “new duties added to jobs lost” or
“completely new positions” that required either “a mixture of new skills and the same types of skills” or “completely new and
different skills” were asked this question.

In general, in the current labor market, is your organization having
a difficult time recruiting for certain types of full-time regular
positions that are open in your organization? California

California United States

No, 35% No, 34%

Yes, 65% Yes, 66%

n = 346 n = 2,562

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents whose organizations
were currently hiring full-time staff were asked this question.

What are the main reason(s) that your organization experiences
difficulty in hiring qualified candidates for full-time regular
positions? California

Candidates do not have the right skills for 50%
the job 48%

Candidates do not have the right work 42%
experience 40%

Qualified candidates are not within our 38%
salary range or hourly range rate 35%
California
34% (n = 224)
Competition from other employers
35% United States
(n = 1,647)
23%
Low number of applicants
24%

Candidates do not have the needed 17%
credentials/certifications 21%

Candidates do not have high enough levels 13%
of education/training 11%

Note: Percentages do not total 100% due to multiple response options. Respondents who answered “don’t know” were
excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of
jobs were asked this question.

What are the main reason(s) that your organization experiences
difficulty in hiring qualified candidates for full-time regular
positions? (continued) California

Qualified candidates are not interested in 11%
moving to our local area 14%

Qualified candidates are not able to move to 8%
our local area (due to mortgage or other issues) 6%

7%
Candidates are overqualified
6%
California
Our local education/training system does not
5% (n = 224)
produce enough work-ready/qualified job
candidates 6% United States
(n = 1,647)
4%
Lack of interest in type of job
6%

Our organization does not provide relocation 4%
funds 4%

10%
Other
7%

Note: Percentages do not total 100% due to multiple response options. Respondents who answered “don’t know” were
excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of
jobs were asked this question.

Do you believe that your organization is facing global competition
(i.e., competition from other countries) for talent for hard-to-fill jobs?
California


Yes, 13%
Yes, 17%

No, 83% No, 87%

n = 200 n = 1,492

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents whose organizations
were having a difficult time recruiting for certain types of jobs were asked this question.

Skill Gaps


Key Findings: Skill Gaps
California

• What basic skills/knowledge gaps do job applicants typically have? The most common
basic skills/knowledge gaps are writing in English (62%), English language (spoken)
(40%), reading comprehension (38%) and mathematics (34%).
 California is more likely than the U.S. to indicate gaps in writing in English (62% versus
55%), English language (spoken) (40% versus 29%), and reading comprehension (38%
versus 31%).
• What applied skill gaps do job applicants typically have? The top four applied skill gaps
are critical thinking/problem solving (57%), professionalism/work ethic (49%), written
communications (46%) and leadership (41%).
 California (28%) is more likely to report gaps in creativity skills compared with the U.S.
(21%).
• What types of jobs are the most difficult to fill? The top five most difficult positions to fill are
highly skilled positions: high-skilled medical (e.g., nurses, doctors, specialists)
(88%), engineers (85%), high-skilled technical (e.g., technicians and programmers)
(85%), scientists (85%), and managers and executives (82%).
 The U.S. (34%) is more likely to report difficulty recruiting for hourly laborers compared
with California (20%).


Implications for HR: Skill Gaps
California

• Basic skills/knowledge gaps, especially in written and spoken English, may be a growing
challenge for California employers. California HR professionals are more likely than the rest
of the U.S. to report gaps in written and spoken English among applicants. This may mean
that they will be more likely to need to provide basic skills training for their employees or to
get more involved in educational initiatives aimed at improving California students’ basic
skills.
• Encouraging creativity may be of particular importance to California HR professionals.
Although the applied skill gaps that California HR professionals identify are similar to those
reported by HR professionals across the rest of the U.S. (such as critical thinking/problem
solving, professionalism/work ethic, written communications and leadership), California HR
professionals are more likely to report gaps in creativity skills compared with their
counterparts elsewhere in the U.S. This may be a reflection on the types of industries that
are based in California and could lead many organizations to seek out innovations in
building a more creative organizational culture and/or boosting individual creativity.
• High-skilled jobs will be the most difficult to fill in California for the foreseeable future.
Currently the most difficult positions to fill in California are highly skilled positions. This trend is
likely to continue into the future and could lead to recruiting challenges.
• Because of their unique labor market challenges, California organizations may become
more involved in collaborating with their local educational institutions. Working more
closely with education and training providers may help California organizations address
skill and knowledge gaps and create a more qualified local talent pool.


In general, what basic skills/knowledge gaps do job applicants
have in your industry?
California

*Writing in English (e.g., grammar, spelling) 62%
55%

*English language (spoken) 40%
29%

*Reading comprehension (in English) 38%
31%

Mathematics (computation) 34%
38%

Science 15%
14%
California
Government/economics 9% (n = 287)
13%
8% United States
Foreign languages
8% (n = 1,928)
Technical 7%
(e.g., computer, engineering, mechanical) 11%

History/geography 3%
2%

Humanities/arts 3%
2%

Other 11%
9%

Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a difficult
time recruiting for certain types of jobs were asked this question. An asterisk (*) indicates a statistically significant difference between
organizations in California compared with those in the United States.

In general, what applied skill gaps do job applicants have in your
industry?
California

Critical thinking/problem solving 57%
53%
Professionalism/work ethic 49%
46%
Written communications 46%
41%
Leadership 41%
38%
Oral communications 36%
34%
31% California
Information technology application
29% (n = 319)
Teamwork/collaboration 29% United States
33%
(n = 2,168)
*Creativity/innovation 28%
21%
Lifelong learning/self-direction 23%
21%
Diversity 19%
18%
Ethics/social responsibility 18%
18%
Other 6%
5%
Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a difficult
time recruiting for certain types of jobs were asked this question. An asterisk (*) indicates there is a statistically significant difference
between organizations in California compared with those in the United States.

Specific job categories for which organizations are having
difficulty recruiting:
California

High-skilled medical 88%
(e.g., nurses, doctors, specialists) (CA n = 51, U.S.
n = 366) 83%

Engineers 85%
(CA n = 100, U.S. n = 751) 86%

High-skilled technical 85%
(e.g., technicians, programmers) (CA n = 149, U.S.
n = 1,093) 85%

85% California
Scientists
(CA n = 40, U.S. n = 242) 88% United States

Managers and executives 82%
(CA n = 178, U.S. n = 1,248) 77%

Skilled trades (e.g., electricians, carpenters) 68%
(CA n = 76, U.S. n = 687) 70%

Sales representatives 63%
(CA n = 86, U.S. n = 584) 68%

Note: This figure represents “Somewhat difficult” and “Very difficult” responses. “Not applicable” responses were excluded from this
analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

Specific job categories for which organizations are having
difficulty recruiting: (continued)
California

Accounting and finance professionals (CA n = 48%
157, U.S. n = 1,154) 53%

HR professionals 45%
(CA n = 125, U.S. n = 888) 49%

Production operators 35%
(CA n = 60, U.S. n = 467) 44%

Customer service representatives 32% California
(CA n = 117, U.S. n = 806) 31%
United States
Drivers 28%
(CA n = 47, U.S. n = 378) 41%

Administrative support staff 20%
(CA n = 179, U.S. n = 1,344) 21%

*Hourly laborers 20%
(CA n = 97, U.S. n = 851) 34%

Note: This figure represents “Somewhat difficult” and “Very difficult” responses. “Not applicable” responses were excluded from this analysis.
Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question. An asterisk
(*) indicates there is a statistically significant difference between organizations in California compared with those in the United States.

Recruiting Strategies


Key Findings: Recruiting Strategies
California

• What strategies is your organization using to deal with recruiting challenges for full-time
regular positions? The most common strategies that organizations reported are using social
media to find passive job seekers (49%), expanding advertising efforts (45%), expanding
the search region (39%), increasing retention efforts (37%) and training existing employees
to take on the hard-to-fill positions (33%).

 California (30%) is more likely to provide monetary incentives to candidates
(e.g., signing bonus) as a recruiting strategy compared with the U.S. (24%).

• Have organizations been hiring workers from outside the U.S. for jobs that have been
difficult to fill? About three in 10 (29%) organizations have hired workers from outside the
U.S. Another 6% are either considering or have plans to hire workers from outside the U.S. in
the next 12 months.

• Have organizations been hiring U.S. veterans for jobs that have been difficult to fill? Nearly
one-half (47%) of organizations reported hiring U.S. veterans, and 19% are either
considering or have plans to hire veterans in the next 12 months.

 The U.S. (58%) is more likely to have hired U.S. veterans for jobs that have been
difficult to fill compared with California (47%).


Implications for HR: Recruiting Strategies
California

• Organizations may be relying more on social media to find passive job seekers. In
California and across the U.S., a growing number of HR professionals report that they are
using social media to find passive job seekers and to build their employer brand. This
strategy is most likely to occur for jobs with very specific skills and experience requirements.

• Hiring workers from outside the U.S. for jobs that have been difficult to fill may be an
increasingly attractive option. If recruiting difficulty makes it even harder to fill some
jobs, more organizations are likely to look beyond U.S. borders to find qualified candidates.

• California HR professionals may benefit from developing hiring initiatives that focus on U.S.
veterans. Veterans may be an untapped source of talent for California’s employers as
California HR professionals are less likely to report that they have hired U.S. veterans for jobs
that have been difficult to fill compared with their HR counterparts in the U.S.


What strategies is your organization using to deal with recruiting
challenges for full-time regular positions?
California

49%
Using social media to find passive jobseekers
44%

45%
Expanding advertising efforts
47%

39%
Expanding search region
36%
California
37% (n = 224)
Increasing retention efforts
32% United States
(n = 1,635)
Training existing employees to take on the 33%
hard-to-fill positions 33%

31%
Collaborating with education institutions
37%

*Providing monetary incentives to candidates 30%
(e.g., signing bonus) 24%
Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a
difficult time recruiting for certain types of jobs were asked this question. An asterisk (*) indicates a statistically significant difference
between organizations in California compared with those in the United States.

What strategies is your organization using to deal with recruiting
challenges for full-time regular positions? (continued)
California

25%
Improving compensation/benefits package
24%

22%
Offering more flexible work arrangements
22%

Expanding training programs to help improve 19%
skills of new hires California
21%
(n = 224)
6% United States
Offering new job perks (n = 1,635)
5%

5%
Other
5%

None; we have not changed our recruiting 5%
strategy 8%

Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a
difficult time recruiting for certain types of jobs were asked this question.

Has your organization hired any workers from outside the United
States in an attempt to staff key jobs that have been difficult to fill?
California

(n = 221) (n = 1,556)

72%
65%

29%
24%

5% 4%
1% 0%

Yes *No No, but we are No, but we have
considering it plans to do so in the
next 12 months

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents whose organizations were
having a difficult time recruiting for certain types of jobs were asked this question. An asterisk (*) indicates a statistically significant
difference between organizations in California compared with those in the United States.

Has your organization hired any U.S. veterans in an attempt to
staff key jobs that have been difficult to fill?
California

(n =193) (n = 1,415)
58%

47%

34%
26%

14% 12%
5% 4%

*Yes *No No, but we are No, but we have
considering it plans to do so in the
next 12 months

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents whose organizations were
having a difficult time recruiting for certain types of jobs were asked this question. An asterisk (*) indicates a statistically significant
difference between organizations in California compared with those in the United States.

Has your organization hired any U.S. veterans in an attempt to staff
key jobs that have been difficult to fill?
California

Comparisons by organization staff size
• Organizations with 25,000 or more employees are more likely than organizations with 1 to 499 employees to have hired
U.S. veterans in an attempt to recruit for hard-to-fill jobs.

Comparisons by organization staff size: Hired U.S. veterans

1 to 99 employees (22%)
25,000 or more employees (91%) >
100 to 499 employees (36%)

Note: Only statistically significant differences are shown.


The Impact of Strategic
Technological Changes


Key Findings: The Impact of Strategic Technological
Changes California

• How many organizations are making major technology changes that affect the work of
employees? Over one-third (37%) of organizations indicated that in the last 12 months they
had made major strategic changes involving the use of technology
(e.g., robotics, computerized systems, software technologies) that affect the work of
employees, and 10% plan to do so in the next 12 months.

 California (37%) is more likely than the U.S. (30%) to have made major technology
changes in the past year that affect the work of employees.

• Will these technological changes affect the number of full-time regular employees? For
organizations that have made technological changes in the last 12 months or that plan to
in the next 12 months, 59% indicated that the number of employees will stay the same.
One-quarter (25%) reported there will be an increase, and 15% a decrease, in the total
number of employees.

 California (25%) is more likely to report an increase in staff as a result of technological
changes compared with the U.S. (16%), whereas the U.S. is more likely to indicate the
number of employees will stay the same (71% versus 59%).

• Will these technological changes affect what employee skills are required for the
organization? Although 71% of organizations indicated these technological changes
would require new skills, they would not require new staff. Nineteen percent indicated
employees would require the same skills, and 10% would need to hire new staff for the new
skills that would be required.

Implications for HR: The Impact of Strategic
Technological Changes California

• Changes in technology may require investments in employee training. California
organizations are especially likely to have made major technology changes in the past
year that affect the work of employees. This may mean that California employers will also
need to invest in training so technology use is maximized for productivity.

• For California organizations, improved technology is likely to create new jobs. With
California HR professionals more likely to report an increase in staff as a result of
technological changes compared with the U.S. overall, the development of new
technologies appears to be helping California employers become more productive and
to be creating jobs overall.

• Technology may be leading to a more rapid turnover in the skills needed to do many jobs.
This could encourage a more intense war for talent for individuals possessing in-demand
skills and a greater emphasis on technical training for existing employees.


In the last 12 months, has your organization made any major strategic
changes involving the use of technology (e.g., robotics, computerized
systems, software technologies) that affect the work of employees?
California

(n = 478) (n = 3,324)

59%
53%

37%
30%

10% 10%

*Yes *No No, but we have plans
to do so in the next 12
months

Note: Percentages may not total 100% due to rounding. An asterisk (*) indicates a statistically significant difference between
organizations in California compared with those in the United States.

As a result of these technological changes, has or will the total
number of full-time regular employees at your organization
increase, stay the same or decrease? California

(n = 226) (n = 1,345)

71%

59%

25%
16% 15% 13%

*Increase *Stay the same Decrease

Note: Percentages may not total 100% due to rounding. Only respondents whose organizations made or planned to make any major
strategic changes involving the use of technology in the past 12 months or next 12 months were asked this question. An asterisk (*)
indicates a statistically significant difference between organizations in California compared those in with the United States.

As a result of these technological changes, has or will the total
number of full-time regular employees at your organization
decreased? California

Comparisons by organization staff size

• Organizations with 2,500 or more employees are more likely than organizations with 1 to 99 employees to have a
decrease in the total number of full-time regular employees as a result of recent or planned technological changes.

Comparisons by organization staff size: Decrease in total number of full-time regular employees

2,500 to 24,999 employees (43%)
> 1 to 99 employees (3%)
25,000 or more employees (40%)

Note: Only statistically significant differences are shown.


How have or will these technological changes affect the
employee skills required in your organization?
California

(n = 226) (n = 1,345)

71% 72%

19% 18%
10% 10%

do not need to hire new staff (e.g., existing staff can be trained iffor which we need to hire new staff
Require the same skills
Require new skills, necessary)

Note: Only respondents whose organizations made or planned to make any major strategic changes involving the use of
technology in the past 12 months or next 12 months were asked this question.

Demographics


Demographics: Organization Industry
California

Professional services 22%
13%

Health 13%
13%

Manufacturing 11%
14%

State or local government 9%
20% California
8% (n = 489)
Finance
11% United States
8% (n = 3,481)
High-tech
7%

Construction, mining, oil and gas 5%
10%

Federal government 2%
7%

Other 22%
6%

Note: Percentages may not total 100% due to rounding.


Demographics: Organization Sector
California

48%
Privately owned for-profit
43%

19%
Publicly owned for-profit
17%
California
17% (n = 473)
Nonprofit
12% United States
(n = 3,294)
12%
Government
25%

3%
Other
3%

Note: Percentages may not total 100% due to rounding.


Demographics: Organization Staff Size
California

30%
1 to 99 employees
26%

32%
100 to 499 employees
33%
California
16% (n = 460)
500 to 2,499 employees
19% United States
(n = 3,208)
14%
2,500 to 24,999 employees
16%

8%
25,000 or more employees
6%


Other Demographics
California

Is your organization a single-unit organization or a
Does your organization have U.S.-
multi-unit organization?
based operations (business units) only,
or does it operate multinationally? CA U.S.

CA U.S. Single-unit organization: An organization
in which the location and the 34% 36%
U.S.-based operations organization are one and the same.
74% 76%
only
Multinational Multi-unit organization: An organization
26% 24% 66% 64%
operations that has more than one location.
n = 478 (CA), 3,325 (U.S.)
n = 476 (CA), 3,311 (U.S.)
For multi-unit organizations, are HR policies and
practices determined by the multi-unit headquarters,
What is the HR department/function for by each work location or by both?
which you responded throughout this
survey? CA U.S.

CA U.S. Multi-unit headquarters determines HR
46% 50%
policies and practices
Corporate
65% 68% Each work location determines HR
(companywide) 4% 3%
policies and practices
Business unit/division 22% 19%
A combination of both the work location
Facility/location 13% 13% and the multi-unit headquarters 50% 47%
determines HR policies and practices
n = 328 (CA), 2,206 (U.S.)
n = 327 (CA), 2,204 (U.S.)


SHRM Survey Findings: The Ongoing Impact of the
Recession—California Recruiting and Skill Gaps

Survey Methodology
• California response rate = 10%
• United States response rate = 15%
• 491(California) and 3,481 (United States) HR professionals from a randomly selected
sample of SHRM’s membership participated in this survey
• Margin of error: California +/-4%, United States +/-2%
• Survey fielded August 28 through September 14, 2012


About SHRM Research

• For more survey/poll findings, visit www.shrm.org/surveys

• For more information about SHRM’s Customized Research Services, visit
www.shrm.org/customizedresearch

• Follow us on Twitter @SHRM_Research

Project leader:
Tanya Mulvey, survey research analyst, SHRM Research

Project contributors:
Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research
Evren Esen, manager, Survey Research Center, SHRM Research
Jennifer Schramm, GPHR, manager, Workplace Trends and Forecasting, SHRM Research

Copy editor:
Katya Scanlan, SHRM Knowledge Center


The Ongoing Impact of the Recession—California Recruiting and Skill Gaps

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