Talent Acquisition at a Crossroads Between True Strategic Advisory and Cost Reduction Role, Finds Josh Bersin Company

• Despite the high demand for talent and skills, Talent Acquisition teams are not getting the resources they need

• Talent Acquisition teams are being asked to concentrate on saving costs—not participate in important transformation and workforce planning projects

• The report is the result of the ongoing collaboration between The Josh Bersin Company and AMS

The Josh Bersin Company, the world’s most trusted human capital advisory firm, working with global talent solutions business AMS, published research that shows Talent Acquisition (TA) is at a crossroads. Despite being asked to focus on finding skilled workers, TA teams feel disconnected from helping address company strategy and are being forced to only advise on ways of reducing costs.

The results emerge from a sentiment-based (as opposed to longitudinal) research project, the latest in the Bersin ongoing global Talent Climate research initiative, created in collaboration with AMS, which draws on half a million hire-related data points of global HR and recruitment records.

The main findings of the report, Talent Acquisition at a Crossroads, show that while skills shortages remain the top issue for TA leaders (60%), these leaders face tremendous pressure to improve the efficiency of recruiting processes (58%).  For example, TA practitioners feel they are perceived as “order-takers” and their contribution is insufficiently recognized. Despite 55% of companies viewing TA specialists as an integral part of the business, only 32% of TA leaders feel they serve as a truly strategic partner to their organization, the analysis shows.

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The research finds a surprisingly low level of maturity in workforce planning. 42% of companies do not have a workforce plan and 40% of HR leaders state, “Our business is not ready to take a strategic approach to hiring.”

Another critical topic, skills-based hiring, is beginning to lose its luster, with almost 70% of companies stating, “Skills-based hiring is too difficult for us to implement right now.” The reason for this is not a lack of technologies, Josh Bersin Company researchers point out, but rather a lack of clarity in “how” to build a skills program. (Watch analyst Josh Bersin’s video for an in-depth discussion.)

Talent Acquisition leaders also struggle with recruiting skills, with 42% admitting their recruiters need more training. As AI (artificial intelligence) expands throughout talent acquisition, The Josh Bersin Company is advising CHROs that the reskilling of recruiters is essential. This is a challenge as 45% of HR leaders were told to prioritize cost-cutting over strategic talent acquisition.

AI is a huge topic within HR, but it appears to have a long way to go until it becomes widely adopted in TA. Despite the well-documented positive impact of AI on the delivery of world-class TA programs through enhanced efficiency and agility, respondents ranked AI as less of a priority than increasing the efficiency of the TA team and reducing costs.

Sector dynamics appear to influence these trends. Pharma stands out with 67% citing skills shortages as a top concern, which may reflect the specialized nature of roles in this sector and the critical need for specific expertise. Comparatively lower percentages in Digital & Tech (44%) and Defense & Engineering (45%) indicate that while skills scarcity is significant, it is less acute in these industries.

Overall, respondents indicate a range of organizational and operational challenges in transitioning to a more strategic position. The most prominent barrier may be the dynamic nature of business priorities, which complicates strategic TA planning.

Finally, the Professional Services sector (38%) ranked the impact of AI and automation among its top three disruptive forces. This industry is at a critical point of technological integration that will profoundly transform service delivery models and talent utilization strategies.

Commenting on the latest Talent Climate round-up, Stella Ioannidou, Senior Director of Research, The Josh Bersin Company, said:

“With 40% of TA leaders highlighting readiness gaps, there’s a clear call for strategic integration of TA into business planning.

“And while skills shortages continue to pose a significant challenge, necessitating innovative approaches to talent sourcing and skills-based hiring, the concern for AI and automation underlines the urgent need for structured technology adoption in modern Talent Acquisition.

Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, said:

“These findings further emphasize the need for closer alignment and integration of TA teams within broader organizational strategy discussions.

“TA’s lack of inclusion in strategic discussion and a seemingly widespread absence of a clear workforce plan are significant obstacles that prevent the TA team from aligning its efforts with long-term business plans.

“Additional internal constraints such as insufficient capacity and capability, along with organizational readiness further complicate the landscape—and the lack of a convincing AI adoption plan does put this vital business function at a ‘crossroads,’ where it is straining to achieve its full potential but hampered by a continuing lack of consistent CEO support.”

Janet Mertens, Managing Director, Data, Insight & Analytics, AMS said:

“Talent acquisition teams have a key role to play in enabling the strategy of the businesses they serve. Their ability to analyse key labour trends, skills requirements and candidate behavior puts them at the forefront of establishing how effectively organizations can build for the future and achieve growth.

The current global workforce climate means organizations cannot afford to simply have a transactional relationship with talent acquisition. They are the connection between candidates and employer brands and are increasingly sophisticated in their use of data and insights to spot the trends which can help to engage that harder to reach talent.

With time-to-hire rates increasing and an increased focus on the need for technology and AI skills in the workforce, building strategic relationships with the teams at the forefront of understanding the future workforce are critical for success.”

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