US Hiring Budget Crisis
- 48% of employers cite budget constraints as the primary challenge in hiring the right talent
- 71% have hired underqualified talent due to budget limitations
- 70% recognize that their compensation packages are not competitive
- 81% need to hire better qualified candidates to relieve burnout for current employees
- 80% of employees report increased stress levels due to unqualified new hires
- 81% of candidates would walk away from an offer if the salary was reduced at final stage
Nearly half (48%) of surveyed employers identified budget constraints as the primary obstacle in hiring the necessary skills and talent for growth. This was followed by a lack of qualified candidates (37%) and high competition from other companies (12%).
The findings from a recent poll by global recruitment consultancy Robert Walters, of 3,000 professionals, reveal that financial limitations have prompted 71% of employers to hire underqualified talent – employees who lack the full set of qualifications, skills, or experience ideally required for a job. 37% of employers are willing to invest in training these new hires to meet the required standards.
In the United States, several states are facing significant budget shortfalls in 2024, which are expected to impact various economic sectors, including recruitment and salary growth. Nationally, the U.S. job market remains competitive, however, the need for budget cuts and economic adjustments may constrain recruitment budgets, limiting companies' abilities to offer competitive salaries. Nationally, salary growth has slowed, with planned increases of only 3.5-4% in 2024, barely in line with inflation.
Sean Puddle, Managing Director of Robert Walters New York comments:
“These findings highlight a concerning trend where budget constraints are directly impacting the quality of talent that companies can hire.
While 37% of employers are willing to invest in training underqualified hires, this approach may not be the most efficient use of resources. Allocating budget towards hiring well-qualified talent from the outset could be a more strategic investment, potentially saving time and improving overall performance. This not only affects the overall performance and growth potential of the business but also places undue stress on existing employees.”
Employee Stress and Increased Workload
The survey reveals that 81% of employers have noticed an increase in employee stress levels due to the additional workload created by hiring underqualified candidates.
This sentiment is echoed by employees, with 73% reporting an increase in their workload due to less experienced new hires. As a result, 46% of employees feel their workload is only somewhat manageable, while nearly a quarter (23%) feel they have too much work at one time.
Sean continues:
“It’s crucial for employers to reassess their hiring budgets and strategies to ensure they can attract and retain the right talent. Offering competitive salaries and benefits, being transparent about financial health, and providing adequate support and resources are key steps to mitigating these challenges.”
Discrepancy in Salary and Benefits
The findings also uncover a gap between employee expectations and what companies can offer, with just 16% of employees agreeing that their compensation fully meets their expectations considering their qualifications. Furthermore, 53% of employees do not feel supported by their company in terms of resources and staffing to perform their job effectively, leading to increased burnout and a potential reduction in output.
Risky Hiring Practices
In an effort to attract top talent, some employers have resorted to offering more attractive salaries initially, only to reduce these offers at the final interview stage. This strategy is highly risky, with 81% of candidates stating they would walk away from such an offer, leaving a lasting negative impression of the organization. Less than 1 in 5 state that their decision would depend on the role or company in question.
Sean adds:
“Employers must move beyond short-term fixes and consider long-term strategies to effectively attract and retain top talent. Consistently offering competitive compensation that reflects the market rate and employees' qualifications is crucial.
Additionally, ensuring a supportive work environment with adequate resources and staffing is essential to prevent burnout and maintain productivity. By focusing on these areas, companies can ensure sustainable success and a positive reputation in the job market.”
These findings highlight a need for US employers to carefully evaluate their budgeting strategies for 2024 and beyond. Without adequate investment in talent, companies risk not only their growth and performance but also the well-being and satisfaction of their existing workforce.
ENDS
About Robert Walters
With more than 4,200 people in 31 countries, Robert Walters Group delivers recruitment consultancy, staffing, recruitment process outsourcing and managed services across the globe. From traditional recruitment and staffing to end-to-end talent management, our consultants are experts at matching highly skilled people to permanent, contract and interim roles across all professional disciplines, including: Accountancy & Finance, Banking & Financial Services, Engineering, Human Resources, Information Technology, Legal, Sales & Marketing, Secretarial & Support, Supply Chain & Procurement.
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Robert Walters
E: laura.oflynn@robertwalters.com
