Why Companies Face Hiring Struggles (And How to Fix Them)

By Carla McKelvey, Vice President and Market Leader Northern US & Canada at Kelly Services

Hiring managers continue to feel the pressure: they need talent, but can't seem to find candidates with the right skills for their open positions. Recent research from Indeed found 58% of employers believe hiring has become more challenging over the past three years, with 75% reporting it is difficult to find quality candidates. Meanwhile, 45% of managers cite a lack of skilled applicants as their main hiring challenge.

In my conversations with clients, I often hear about their struggles to fill skilled trades positions. This workforce is retiring, and we simply don't see younger generations expressing interest in these roles. Similar challenges exist in hospitality, where companies struggle to fill housekeeping, dishwasher, and busser positions. Even in finance and accounting, finding qualified financial analysts remains difficult.

This talent gap keeps widening despite opportunities for companies to adapt their hiring approaches. Only 13% of employers surveyed by Indeed have removed barriers like degree requirements or reduced experience requirements—even though most companies don't consider these criteria important indicators of quality anymore. Meanwhile, 2864% of companies that have adopted skills-based hiring report having a higher incidence of transferable skills, 28% say it has led to more quality candidates, and nearly quarter see improved performance in roles.improved diversity, and 59% report greater equity in their workforce.

Throughout several decades working in staffing and workforce solutions, I've observed a common thread: many companies create unnecessary barriers that significantly limit their talent pools. Here's what I've learned about why companies struggle to attract and retain talent—and how they can adapt their hiring strategies to succeed.

Open up 60% of your talent pool with a simple change

Only 41.6% of individuals in the US have a bachelor’s degree or higher according to the U.S. Bureau of Labor Statistics. I always think about ratios when I talk to employers, and I ask them, "Do you realize that's 60% of the population you would never even consider?" Many are shocked by this perspective. So I challenge them: "Do you really want that degree to be mandatory, or could skills and experience also be reviewed?"

By requiring degrees, companies significantly limit their potential talent pool before recruitment even begins. The Burning Glass Institute found that while many companies have publicly committed to removing degree requirements from job postings, only 37% of these companies actually increased their hiring of non-degreed workers.

Skills-based hiring focuses on candidates' actual capabilities rather than using degrees as a proxy for skills. It involves assessing applicants based on demonstrated competencies, relevant experience, and potential to perform the job functions effectively. To implement this approach successfully:

1. Identify core competencies for each role by breaking down what success actually looks like in the position
2. Develop skills assessments that meaningfully test for these competencies
3. Create alternative qualification pathways that recognize equivalent experience
4. Train hiring managers to evaluate candidates holistically
5. Review job descriptions to ensure they emphasize skills over credentials

This widespread "skills-based hiring in name only" approach explains why companies continue struggling to find talent. They're removing degree requirements on paper while still favoring applicants with degrees in practice. Indeed's research indicates that 56% of employers say their greatest barrier to skills-first hiring is simply understanding what it means to implement such an approach.

According to the Burning Glass Institute study, workers without degrees who are hired into roles that previously required degrees show 10 percentage points higher two-year retention rates compared to their degree-holding colleagues – a 20% increase in retention (58% versus 48%). When you consider the high costs of turnover, skills-based hiring delivers measurable business impact beyond simply expanding your talent pool.

Make it easier for people to apply

One of the most effective tools we use with clients is analyzing their hiring funnel—in other words, tracking where candidates drop out during recruitment. Many companies are surprised to discover they're losing qualified people due to overly complex processes.

The typical barriers that cause candidates to drop out include:

• Multiple rounds of interviews
• Numerous skills assessments and personality tests
• Time-consuming education verification processes
• Extensive background checks that may not relate to job performance
• Drug testing requirements for roles where it's not necessary
• Complicated application systems that create frustration

I always encouragechallenge clients to put themselves in their candidates’ shoes and consider: : "Put yourself through your own hiring process. “Is the processit simple? Fast? Pleasant?" If not, you're likely driving away talent. Candidates today have options, and they'll choose employers who value their time with a streamlined application process.

Remember that every day a position remains unfilled leads to decreased productivity, increased overtime costs, additional stress on your current workforce, missed customer deadlines, and potential service level agreement penalties. Collectively, these costs often significantly exceed what you'd invest in streamlining your hiring process.

Be the one to give candidates a second chance

Approximately 77 million Americans, or 1 in every 3 adults, have a criminal record according to the National Conference of State Legislatures. If your hiring automatically screens out candidates with any criminal history, you're excluding a substantial portion of potential talent.

I encourage companies to consider a practical question: Does a past mistake truly impact someone's ability to perform well in this specific role today? For many scenarios and positions, the answer is no. Second-chance hiring, offered through our Kelly 33 program, provides access to talent your competitors might be overlooking.

The business case for second-chance hiring is compelling. According to research from the SHRM Foundation, 85% of human resource professionals and 81% of business leaders report that individuals with criminal records perform the same as or better than employees without criminal records. Furthermore, 82% of managers and 67% of HR professionals report that the value second-chance employees bring to their organization is as high as or higher than that of workers without records.

Check your reputation: Candidates do their research, too

70% of workers say they would automatically distrust a company with no online reputation, and 55% of job seekers who have read a negative review have decided against applying for a position at that company.

Suffice to say, I always start consultations by reviewing a client's online reputation. Often, poor ratings reveal deeper organizational issues—management problems, workplace culture concerns, or inadequate benefits—that directly impact hiring success.

Some companies underestimate the importance of reviews, but they're a critical factor in a candidate's decision-making process. Here are concrete steps you can take to improve your employer brand:

1. Audit your current online presence on platforms like Glassdoor, Indeed, and Google reviews to understand your starting point.
2. Create an employee feedback program that encourages current team members to share their positive experiences online. Happy employees are your best brand ambassadors.
3. Establish communication channels where employees can voice concerns before they become negative reviews.
4. Respond thoughtfully to all reviews – both positive and negative. This shows candidates you're engaged and receptive to feedback.
5. Identify patterns in feedback and make meaningful improvements to address consistent concerns.

Building a strong employer brand takes time, but it's a foundational element of successful talent acquisition.

Sell the opportunity by adding ‘sizzle’ to your job reqs

Many job descriptions read like a list of demands—they outline requirements, qualifications, and responsibilities without showcasing what makes the role appealing. I encourage employers to make job postings more enticing and attractive to candidates by adding what I call "sizzle": compelling elements that grab attention and generate excitement.

The focus on requirements comes from a well-intentioned place, as employers want to be clear about expectations. However, Indeed's research confirms that 30% of job seekers cite "unrealistic role requirements" as their biggest challenge in finding quality positions.

Instead, highlight what makes the opportunity exciting. Emphasize:

• Career growth opportunities
• Benefits and work-life balance
• Training and development programs
• Company culture and values
• Flexibility options

Research shows 73% of job seekers value learning and development opportunities when deciding whether to apply for a role. When given the choice, 57% would choose "a job offering a less competitive salary but offering opportunities to learn and develop my skills and career within the organization" over a higher-paying job without growth potential.

Don't forget about this hidden source of talent

When clients ask about finding talent, my first question is always about their referral program. Your current employees likely know others with similar skills and values who might be a great fit for your organization.

To build an effective referral program:

1. Offer meaningful incentives that motivate employees to participate. This could include bonuses, extra time off, or other rewards that employees actually value.
2. Make the referral process simple and transparent. A complicated submission system or unclear timeline will discourage participation.
3. Communicate openly about open positions and the types of candidates you're seeking.
4. Provide feedback to employees who submit referrals, regardless of whether their candidate is selected.
5. Celebrate successful referrals to encourage continued participation.

Candidates referred by current employees typically show better culture fit and higher retention rates than those from other sources. They also tend to onboard more quickly since they often already understand your company culture through their connection.

Check your comp: Is it competitive?

Many companies hesitate to adjust wages despite clear market signals. As I tell clients who say they "can't afford" to adjust compensation: you can't afford not to.

The U.S. Chamber of Commerce reports that education, health services, and professional business services sectors consistently have the highest number of job openings nationwide. This creates intense competition for talent. Companies that offer below-market wages face prolonged vacancies and higher turnover costs.

You need to be conducting regular compensation analysis or risk being off the mark. Compare your offerings not just within your industry but across sectors competing for similar skills. Remember that total compensation includes benefits, flexibility, and growth opportunities—not just salary.

Invest in technology and training

Technology is changing how we find and develop talent in a big way. At Kelly, our recruiters use AI tools to craft better job descriptions, highlight relevant candidate experience, and create compelling presentations that showcase talent effectively—and that’s just to name a few examples.

This technology enables us to:

• Identify qualified candidates more efficiently
• Better match candidate skills to job requirements
• Reduce unconscious bias in the screening process
• Improve communication throughout the hiring process

Additionally, companies that offer robust training programs can expand their talent pool by hiring candidates with adjacent skills and developing them into high performers. This approach is especially valuable in fields facing critical shortages, such as skilled trades, software development, and healthcare.

By investing in training, you're able to consider candidates who may not have all the required skills today but demonstrate the aptitude and willingness to learn.

Don’t leave those positions unfilled another day

When positions remain filled with qualified talent, your organization benefits from:

• Consistent productivity and revenue generation
• Appropriate staffing levels that prevent burnout
• Better customer service and on-time deliveries
• Improved employee morale and engagement
• Higher quality work and greater innovation

Conversely, prolonged vacancies create ripple effects throughout your organization that can affect everything from employee satisfaction to customer relationships and financial performance.

Ready to improve your approach to hiring?

The U.S. labor force participation rate is projected to decline from 62.7% in 2024 to 61.2% by 2033 as baby boomers retire and workforce demographics shift, putting increased pressure on recruiting. Now is the perfect time to reevaluate your hiring program to get ahead of the labor shortage.

Removing unnecessary degree requirements could open at least 250,000 more jobs to non-degreed workers annually. Construction managers alone represent nearly 70,000 positions where 39% still require degrees despite being well-suited for skills-based approaches.

The benefits extend to both sides. Workers without degrees who move into roles that previously required degrees experience an average 25% salary increase—over $12,400 in additional annual earnings. Meanwhile, companies see higher retention rates and access to wider talent pools.

Your people are the cornerstone of your business. Companies that thrive will be those that adapt their hiring strategies—simplifying processes, widening talent pools, improving their employer brand, and offering compelling opportunities.

At Kelly, our noble purpose is to connect people to work in ways that enrich their lives while helping organizations build the teams they need to innovate and grow. In today's competitive talent market, that means challenging companies to examine the barriers they've created —intentionally or unintentionally—and developing strategic approaches to overcome them.

Ready to tap into an overlooked talent pool?
Learn more about Kelly 33—our second-chance hiring program designed to connect you with dependable, motivated talent who are ready to make a fresh start.