Masks, gloves, face shields, self-isolation, 70% ethanol solutions and a hurting economy. How has Covid-19 impacted the war for talent?
The war for talent is multivariable, a lot of events can cause its intensification and de-escalation, and considering the amount of chaos brought about by Covid, no economic or business management theory with a ceteris paribus slapped on to it can accurately attribute the effects of Covid on the war for talent. And, in a lot of ways, as countries seek to establish order out of the newborn chaos, such as the USA with the new president-elect Joe Biden’s slogan of “Build Back Better”, it can be anticipated that the same might occur with the global economy. In our previous article, we took a look at post-Covid employment, and expressed why we think that the trends of remote work and talent acquisition software might be here to stay.
The War for Talent: De-escalating or Intensifying?
There is a belief that, because of the ongoing Covid recession, many employees have been made redundant due to reduced economic activity, and many businesses have shut down, and hence the war for talent has de-escalated since the shortage of talent will be reduced. In simpler economic terms, this belief translates to a decrease in labor demand, and an increase in labor supply, which supposedly cuts the shortage of talent. Additionally, due to global levels of trade and immigration being attributed as indicators for measuring globalization, the sharp decrease in both has led many to believe that globalization is taking a hit.
So what does this mean? Is the war for talent de-escalating? Is globalization decreasing? Well, it’s more complicated than that…
The “common sense” belief of labor supply rising and labor demands decreasing may be true, but it may be misleading. Whilst this is universally and unequivocally true, one must consider the following factors. Firstly, in businesses which haven’t permanently shut down, downsizing has occurred in a manner with which workers who are not vital for future growth projects are made redundant. This means that much of the workforce which has gone out of work are not the organizational fits which businesses who wage war for talent are looking for. Much of this talent has stayed employed. Furthermore, even if you doubt this sentiment, since it is based on an assumption, and believe that this isn’t the case, this doesn’t mean the war for talent has de-escalated and here’s why.
Short-Term vs Long-Term and Other Nuances
Since these shifts in the labor market occurred are due to demand and supply-side shocks, due to the consequences of Covid, these changes do not represent trends in the labor market or set a precedent for the future of labor markets, as economies worldwide are set to recover from these economic shocks, and return to normalcy is perceived as inevitable in most societies. In fact, it can be argued that as a consequence of Covid, trends of digitization of the workspace, the increasing implementation of AI to automate and enhance processes and industry 4.0 are now going to accelerate.
Now, we touched on the “Build Back Better” agenda of the Biden-Harris administration, and the entire point is, that these illusory or genuine decreases in talent shortages will be soon eliminated through long-term economic forces. So depending on how you view the situation, you either have no reason to believe that the talent on war has de-escalated, and that in fact it will intensify due to acceleration of mentioned trends, or you can view this turmoil in the labour market as a short window of opportunity to scramble for the talent made redundant.
Now, what about globalization? With globalization, the answer isn’t as clear-cut. Even before the Covid crisis, since The Great Recession, the deceleration of global trade was noticeable. However, it is to be noted that globalization is multi-dimensional, and cannot only be correlated with volumes of international trades of goods and immigration between countries, which have been hit hard during Covid. However, along with these negative indicators for globalization, there are positive indicators such as the aforementioned increasing digitization of the workspace. In a way, the digitization of the workspace has lowered the barriers to entry to foreign labor markets. Hence, SMEs are now more than ever poised to benefit from foreign labor markets and escape the war for talent brewing in their markets, and compete for global talent.
In conclusion, the war for talent isn’t de-escalating in the long-term, with short-term possible reduction of talent shortages to be corrected by long-term economic forces. Additionally, as Covid has incentivized companies to rethink their strategy, a lot of focus is to be put on automation and digital transformation, narrowing the pool of talent to hire from. But, for SMEs, the digitization of the workspace means sourcing candidates from across the globe, expanding the talent pool to hire from and de-escalating the war for talent. With barriers to entry to foreign labor markets being lowered, more SMEs are expected to be competing for talent with the big dogs.
However exuberant this may sound for some, it is important for such operations to be conducted with the correct logistics, and, luckily, there are a plethora of software tools which companies can leverage to adopt remote working and maintain a sustainable global workforce. Most correlated with the topic of discussion of this article, talent acquisition software solutions are perfect for making global hires with efficiency. Much of the hiring processes are automated, and recruiting teams are empowered with an interface specialized for their hiring needs. For an experience catered towards post-Covid hiring needs, HireBee is the perfect solution, with the company placing an emphasis on Covid and developing their product accordingly, as the startup seeks to empower SMEs to compete for talent with big enterprises globally.