Mekari Insight
- Talent shortage highlights the urgent need for digital-savvy professionals across industries, pushing HR leaders to rethink how they attract and retain key talent.
- Companies can address this problem by maintaining employer branding to attract new top talent and plan retention strategy to retain their best employee. There are also some alternatives like outsourcing and staff augmentation.
- An effective HR system plays a crucial role in overcoming talent shortages by enabling companies to manage employee performance and development more efficiently.
- A good human capital management platform can also integrate seamlessly with benefit management software to recognize and reward employees, helping companies to improve retention rate.
Today, many companies are struggling to find the right people to fill important roles across a wide range of industries.
This talent shortage happens not just in high-tech or digital fields, but also in areas like manufacturing, healthcare, logistics, education, and the service sector.
Several factors are making it harder to find and keep skilled employees, such as an aging workforce, gaps between what schools teach and what companies need, limited training opportunities, as well as changing expectations about work and careers.
As competition for talent gets tougher, it becomes more important for businesses to understand the causes behind this shortage and to find practical ways to attract, develop, and retain their best people.
In this effort, HR managers play a critical role as strategic partners, not only attracting top talent but also identifying and addressing skill gaps within the workforce.
What is talent shortage?
A talent shortage occurs when organizations across various sectors find it difficult to find enough individuals with the right combination of skills and experience to fill key roles.
This challenge is not confined to a single industry but is a widespread global phenomenon impacting fields such as manufacturing, healthcare, logistics, education, and many others.
According to LinkedIn, the global talent shortage has reached its highest level in 16 years, with 75% of employers reporting difficulties in finding candidates with the right blend of hard and soft skills.
A Korn Ferry study further highlights the severity of the issue, predicting a global talent deficit of over 85 million workers by 2030.
Indonesia is not immune to this talent crisis. Data from Kominfo indicates that the country will face a shortage of 9 million IT professionals by 2030.
This digital talent shortage is further compounded by the fact highlighted by Education Minister Nadiem Makarim, that only about 20% of Indonesian university graduates find employment in areas related to their field of study.
This stark contrast between education and labor market demands underscores the need for efforts to bridge the skills gap.
The causes of talent shortage
The talent shortage is a pressing issue that businesses cannot afford to ignore. To effectively combat this challenge, companies must first understand the root causes that contribute to talent scarcity.
1. Skills gap and mismatch
The skill gap refers to the difference between the skills employees possess and the skills companies need.
This mismatch can occur due to various factors, such as insufficient education, technology advancements, and changes in workforce needs.
According to a report by the World Economic Forum, in 2022, no less than 54% of the entire workforce needs to update or replace their skills to remain relevant.
2. Rapid technological advancements
The rapid pace of technological innovation is constantly creating new job roles and transforming the skills required for existing ones.
This rapid evolution often outpaces the ability of job seekers to acquire new technical skills.
3. Aging workforce and retirements
An aging workforce refers to a significant proportion of employees reaching a certain age, typically 40 years or older.
As workers age, there may be a decline in their productivity and efficiency. When these experienced workers retire, their valuable knowledge and expertise in specific fields are also lost.
4. Increased competition for specialized talent
In the competitive business world, talent is an organization’s most precious asset. However, not all companies can successfully attract and retain top talent. This results in fierce competition for specialized individuals with in-demand skills.
68% of HR leaders say their sourcing efforts do not identify an adequate supply of critical talent. (Gartner, 2024)
5. Changing work expectations of digital workers
Today’s digital workers seek more than just high salaries; they crave opportunities for career development and growth.
However, many companies are still falling short in providing adequate training and development programs to help their employees adapt to technological changes and evolving work expectations.
Strategies to attract top digital talent
By implementing these strategies, companies can transform themselves into talent magnets, attracting and retaining the digital minds that drive innovation and propel businesses to new heights.
1. Emphasize employer branding
A strong employer brand is like a beacon, attracting talented individuals seeking a work environment that aligns with their values and aspirations.
Showcase your company’s unique culture, highlighting the supportive atmosphere, shared values, and the flexibility that empowers employees to thrive.
Let your company’s personality shine through, demonstrating that you offer more than just a job; you offer a place to belong and grow.
2. Offer competitive salaries and benefits
While intrinsic motivation drives many digital talents, financial rewards play a significant role in attracting and retaining top performers. Offer competitive salaries that reflect the value these individuals bring to your organization.
Complement these with a comprehensive benefits package that includes health insurance, generous vacation time, and retirement plans.
These demonstrate your commitment to employee well-being and create a sense of security that fosters loyalty.
68% of employees are more likely to stay longer at their current occupation if provided with financial wellness benefits.
3. Provide growth and development opportunities
Digital talents are not just employees; they’re potential leaders and innovators. Provide them with opportunities to learn, grow, and expand their skill sets.
Invest in training programs, encourage attendance at industry conferences, and offer challenging projects that allow them to showcase their abilities. By nurturing their growth, you not only retain valuable talent but also cultivate a future-ready workforce.
4. Streamline the recruitment process
A cumbersome recruitment process can be a major turn-off for talented individuals. Make the process seamless and efficient, from the initial application to the final onboarding.
Ensure a user-friendly application process, maintain clear and timely communication, and conduct fair and objective interviews.
A streamlined recruitment experience not only attracts top talent but also reflects a well-organized and professional company culture.
5. Utilize targeted sourcing of candidates
Don’t cast a wide net; use targeted strategies to reach the specific talent you need. Utilize niche platforms and social media channels frequented by digital professionals.
LinkedIn, for instance, is filled with potential candidates, while platforms like Twitter and Facebook can help you reach a broader audience.
By understanding where your desired talent congregates, you can engage with them directly, building relationships and showcasing opportunities that align with their expertise.
6. Collaborate with Educational Institutions
Partnering with universities or training centers allows companies to find fresh talents and develop internship or apprenticeship programs tailored to industry needs.
Early engagement with students creates a steady talent pipeline and increases the chance of hiring candidates whose skills align with job requirements.
Such collaboration also builds employer brand awareness among emerging talent.
Retention strategies for digital talent
Companies can create a thriving work environment that empowers employees to learn, grow, and contribute their best. In doing so, they not only retain top talent but also foster a culture of innovation and continuous improvement.
1. Foster a culture of ongoing learning
Companies that embrace a culture of continuous learning empower their employees to stay relevant, adapt to new technologies, and contribute to innovation.
Provide ample opportunities for learning and development, such as in-house training programs, workshops, or online courses.
By encouraging a growth mindset, you foster a workforce that is not afraid of challenges but sees them as opportunities to grow and excel.
2. Offer mentorship and development programs
Mentoring and development programs are invaluable tools for empowering employees to reach their full potential.
Through mentoring, experienced professionals can guide and support their less experienced counterparts, providing valuable insights and career advice.
Development programs, such as opportunities for promotion or job rotation, offer challenges and opportunities for growth, keeping employees engaged and motivated.
3. Maintain work-life balance and flexibility
Achieving a healthy work-life balance is essential for employee well-being and productivity.
Companies that prioritize work-life balance demonstrate their commitment to their employees’ overall health and happiness.
Offer flexible work arrangements, such as remote work options or flexible work hours, to empower employees to manage their time effectively and achieve a sense of balance in their lives.
4. Provide recognition and opportunities to lead
Acknowledge and reward employee achievements, both big and small, to foster a culture of appreciation and inspire continued excellence.
Provide opportunities for employees to take on leadership roles, such as leading projects or mentoring colleagues.
These opportunities empower them to showcase their skills, contribute to the company’s success, and gain valuable leadership experience.
5. Emphasize the impact of the work on the company/society
Talented digital professionals are driven by a desire to make a difference, to contribute to something meaningful.
Connect their work to the company’s mission and values, highlighting how their contributions impact the organization’s success and contribute to a larger purpose.
6. Create a Strong Employee Recognition Culture
Regularly acknowledging and celebrating employee achievements boosts morale and reinforces positive behaviors.
A culture of recognition increases employees engagement and loyalty, making workers feel valued and motivated to stay.
This can be done through formal awards, peer-to-peer recognition, or spontaneous appreciation moments.
Alternative Solution to Address Talent Shortage
Besides attracting top talent and retaining existing employees, companies can consider several alternative approaches to effectively overcome talent shortages.
Two widely used solutions are outsourcing and staff augmentation.
Both models enable businesses to quickly access the skilled professionals they need, but each works differently and suits different situations.
| Aspects | Outsourcing | Staff Augmentation |
|---|---|---|
| Definition | External provider manages entire project/function | External professionals integrated into internal team |
| Control | Lower control over daily work | High control; internal management over augmented staff |
| Flexibility | Flexible project-based or ongoing contracts | Flexible scaling of staff as needed |
| Costs | Fixed price or service-based fees | Payment based on hours/time contracts |
| Management | Managed by outsourcing provider | Managed by company’s supervisors |
| Skill Access | Access to broad specialized expertise | Access to specific niche skills |
| Use Cases | Non-core functions, cost efficiency, scalability | Short-term projects, urgent skill gaps |
| Team Integration | Limited; external teams operate separately | High; integrated within internal teams |
| Commitment Duration | Medium to long term contracts | Short to medium term, project-bound |
1. Outsourcing
Outsourcing involves hiring an external service provider to manage entire projects or business functions, allowing companies to tap into specialized expertise without adding full-time employees.
This method provides access to a global talent pool, enabling firms to fill skill gaps and scale operations efficiently.
It is commonly applied in industries such as IT, manufacturing, logistics, and customer service.
Outsourcing typically reduces costs by converting fixed labor expenses into variable costs and allows companies to focus on their core activities while providers manage deliverables and quality.
However, since the external team manages projects independently, companies usually have less direct control over daily tasks.
2. Staff Augmentation
Staff augmentation is a flexible strategy where companies temporarily add external professionals to their existing teams to cover skill shortages or increased workload.
Unlike outsourcing, augmented staff work directly under the company’s management and integrate closely with internal employees.
This method offers rapid access to specialized skills, particularly useful for short-term projects or urgent capacity needs, and allows businesses to scale their workforce up or down as required without the long-term commitment of permanent hires.
Cost-wise, staff augmentation can be more predictable since payments are often based on hours worked or contract duration.
This approach also helps companies maintain internal control over projects while benefiting from external expertise.
Conclusion
As the competition for top talent intensifies, companies need adaptable strategies, whether through employer branding, strengthening company’s culture, or staff augmentation.
But to truly succeed, effective management of both employee performance and workplace benefits becomes crucial.
To support this, Mekari offers powerful integrated tools designed for modern HR needs, which are Mekari Talenta and Mekari Flex.
Mekari Talenta helps you streamline employee management, from attendance and payroll to performance tracking, making it easier to oversee both permanent and augmented staff.
Meanwhile, Mekari Flex simplifies benefit administration, ensuring your workforce stays motivated and well-supported.
The seamless integration between these two platforms allows you to coordinate HR and benefits processes effortlessly, helping your business stay agile and competitive despite talent shortages.
Overcome talent shortage and empower your workforce with HR solutions from Mekari!
References
Forbes. ‘’The Talent Shortage Is Real’’
LinkedIn. ‘’Retaining and Hiring Top Talent Amidst a Talent Shortage’’
