SHRM Survey Findings: The Ongoing Impact of the Recession—California Recruiting and Skill Gaps April 18, 2013

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

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

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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Key Findings: 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 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Implications for HR: Recruiting Challenges 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Implications for HR: Recruiting Challenges (continued) California

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 The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 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 8 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013 n = 346n = 2,562

What are the main reason(s) that your organization experiences difficulty in hiring qualified candidates for full-time regular positions? California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 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 The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 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 11 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013 n = 200n = 1,492

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

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%). The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Key Findings: 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Implications for HR: Skill Gaps California

In general, what basic skills/knowledge gaps do job applicants have in your industry? California 15 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

In general, what applied skill gaps do job applicants have in your industry? California 16 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

Specific job categories for which organizations are having difficulty recruiting: California 17 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

Specific job categories for which organizations are having difficulty recruiting: (continued) California 18 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

19 Recruiting Strategies

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%). The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Key Findings: 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Implications for HR: Recruiting Strategies California

What strategies is your organization using to deal with recruiting challenges for full-time regular positions? California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 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 The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 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 24 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

Has your organization hired any U.S. veterans in an attempt to staff key jobs that have been difficult to fill? California 25 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

Has your organization hired any U.S. veterans in an attempt to staff key jobs that have been difficult to fill? California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Note: Only statistically significant differences are shown. Comparisons by organization staff size: Hired U.S. veterans 25,000 or more employees (91%)> 1 to 99 employees (22%) 100 to 499 employees (36%) 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.

The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM The Impact of Strategic Technological Changes

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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Key Findings: 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Implications for HR: The Impact of Strategic Technological Changes California

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

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

As a result of these technological changes, has or will the total number of full-time regular employees at your organization decreased? California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Note: Only statistically significant differences are shown. Comparisons by organization staff size: Decrease in total number of full-time regular employees 2,500 to 24,999 employees (43%) 25,000 or more employees (40%) >1 to 99 employees (3%) 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.

How have or will these technological changes affect the employee skills required in your organization? California 33 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. The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM 2013

34 Demographics

Demographics: Organization Industry California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Note: Percentages may not total 100% due to rounding.

Demographics: Organization Sector California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM Note: Percentages may not total 100% due to rounding.

Demographics: Organization Staff Size California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM

CAU.S. U.S.-based operations only 74%76% Multinational operations 26%24% n = 476 (CA), 3,311 (U.S.) Other Demographics California The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM CAU.S. Single-unit organization: An organization in which the location and the organization are one and the same. 34%36% Multi-unit organization: An organization that has more than one location. 66%64% CAU.S. Multi-unit headquarters determines HR policies and practices 46%50% Each work location determines HR policies and practices 4%3% A combination of both the work location and the multi-unit headquarters determines HR policies and practices 50%47% Is your organization a single-unit organization or a multi-unit organization? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? Does your organization have U.S.- based operations (business units) only, or does it operate multinationally? n = 478 (CA), 3,325 (U.S.) n = 327 (CA), 2,204 (U.S.) CAU.S. Corporate (companywide) 65%68% Business unit/division22%19% Facility/location13% n = 328 (CA), 2,206 (U.S.) What is the HR department/function for which you responded throughout this survey?

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

For more survey/poll findings, visit For more information about SHRM’s Customized Research Services, visit Follow us on Twitter The Ongoing Impact of the Recession—California Recruiting and Skill Gaps ©SHRM About 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