How to Bridge the Skills Gap When Qualified Workers are Scarce

These days, employers are looking high and low to find qualified workers for their job openings. Skills shortages are creating hiring hurdles for local businesses, who need creative thinking and proactive strategies to ensure the strength of their workforce.

Eighty-three percent of small business owners are finding almost zero qualified applicants for their open positions. Nearly a quarter say this is their single most important business problem, according to a June 2018 report from the National Federation of Independent Business.

This disconnect between what employers want and what the labor market has to offer is commonly referred to as the skills gap. Compounded by the state’s historically low unemployment rate—last reported at 2 percent—Hawaii’s lack of skilled workers is impeding growth for local businesses across industries.

So where are all the qualified workers? And how can your business bridge Hawaii’s skills gap to come out ahead? Let’s take a look.

What’s contributing to Hawaii’s skills gap?

There are a lot of factors—lack of growth among the working-age population, rapid emergence of new technologies, public perception of college as the only route to a rewarding career, failure of educational institutions to equip students for the workforce—that are contributing to the nationwide skills gap.

But Hawaii has its own set of problems that may be making it difficult for companies like yours to find skilled workers.

Growing brain drain of young professionals

Graduate from high school, go to college on the mainland, come back home, and get a good job. For many, this is a rite of passage The problem? Nearly 70 percent of local students don’t return to Hawaii (or eventually make it back to the mainland) after they graduate, despite the growing number of well-paying jobs back home.

“It is just simple math: our children on the mainland can buy a beautiful home in Portland for $500,000, which easily is $1.9 million to $2.2 million in Hawaii,” says ALTRES CEO Barron Guss in a recent Hawaii Business Magazine article. “So many decide to stay [in the mainland] and have a great cost of living and great standard of life.”

Mass exodus of baby boomers from the workforce

Over 10,000 baby boomers retire every day and they’re leaving behind tough-to-fill, highly-skilled positions. And while one could argue that this is less of an issue in Hawaii, where long life expectancy and high cost of living keep people in the workforce well past retirement, it may in fact exacerbate the problem. In small businesses especially, longtime employees become indispensable to the point where just one departure can jeopardize the entire success of the company.

Outmigration of Hawaii residents

In the last five years, roughly 37,000 more people left Hawaii for the mainland than moved in—that equates to a population decline of three people per day! Hawaii was one of only eight states that saw a population decline in 2017 and it was the first time the islands saw a drop since 2010. With more people leaving than moving in, the state’s already tight labor pool is shrinking by the day.

How to bridge the skills gap

Hawaii’s skills gap is a complex issue. There isn’t going to be a single solution and closing the gap won’t happen overnight. The good news is that there are small steps you can take today that can have big payoffs for your company in the future.

Tap into your network for employee referrals

This seems obvious, but employee referrals have proven time and time again to be a reliable source of new hires. Regional Manager Michelle Conrey acknowledges that recruiting is tough for everyone right now, but says that one of her clients is finding success through personal referrals. “These referrals have been way more dependable as they are friends or family of the client’s core staff.”

Identify and invest in top-performing employees

Good employees don’t grow on trees. That’s why it’s crucial to identify and invest in (e.g. train, promote, and reward) existing employees who show promise for growth. A whopping 87 percent of Millennials say that professional and career growth is actually important to them in a job. Promoting from within also opens the door for entry-level positions, which can be easier to recruit for than upper-level, skilled positions.

Recruit with the big picture in mind

Always recruit candidates with the big picture in mind, even for entry-level roles. Does the candidate have foundational soft skills that can be built upon with a little bit of experience? Does the candidate show a strong interest in the company or industry? By understanding how the candidate fits into the big picture, you can cultivate a workforce that grows with your company.

Consider offering internships for temporary openings

If you have temporary or project-based work available, offer a paid internship to current or recently graduated students. This helps to get short-term workloads covered and builds a pipeline of great workers for the future. Side note: call it an internship, not temporary or part-time work. “Even if the work and pay is the same, I’ve found that referring to an opportunity as an internship is more attractive and desirable to young professionals,” says ALTRES Manager Emy Yamauchi-Wong.

Retain, retain, retain

The absence of new talent is a good reminder to keep current employees close. Employee retention sounds fancy and expensive but really comes down to rewarding and acknowledging your team on a regular basis. Whether it’s personally recognizing an employee’s contribution to a project or holding a monthly pizza party for your team, keeping existing employees happy can help you stay ahead in Hawaii’s tight labor market.

There’s no sugar-coating the truth: finding skilled employees in today’s market is difficult. In fact, you may need to cultivate them yourself by understanding your needs, investing in training, and partnering with state and private institutions.

This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant or adviser before acting upon any information in this article.