Stay Competitive in an Employee Market
For years, employers have felt that they had the advantage when hiring: after all, this person did need a job. But pandemic-related changes in the job market as well as nationwide labor shortages have tipped the scales: you now need them more than they need you.
With nearly 10 million job vacancies in the U.S. right now, candidates for employment now hold a lot of power. When jobs are plentiful and workers are hard to get, how do you as an employer stay competitive?
The Easy & Obvious One - Increase Pay
The cost of living has gone up a lot over the past year; have your raises gone up? Are you offering competitive salaries to qualified candidates for vacant positions? Are your pay increases extending beyond new hires to the loyal employees who haven't quit?
Of course, the decision to give across-the-board raises comes with financial implications that need to be carefully weighed, but it needs to be weighed against this simple fact: retention is cheaper than recruitment. Think of all the ways you spend money just to get a quality person in a position (and that assumes they stay in that position long enough to be a beneficial part of your business!):
advertising a position
overtime to other staff members to compensate for the missing person/unfilled position
time loss on critical tasks for all employees involved in recruitment, interviews, hiring, and training the new employee
The most expensive employee is the one you pay to recruit and onboard that doesn't end up working out.
Increase your employee retention by upping pay, increasing benefits, and/or providing more PTO in response to the market standards. And of course, you need to be offering incoming employees a salary that is competitive against other hiring bodies in your area and/or field.
Raising wages won't necessarily solve all your problems if workers are quitting because they are overworked, under too much pressure, and feel like the conditions are not healthy for them, which brings us to...
Quality of Life Matters
People are focusing on their work-life balance more than ever. Work may be a big part of our lives, but everyone agrees that it shouldn't be everything, and when the stress and pain caused by an unhealthy work environment bleeds over into your home life, you'll lose employees. Recognize a few things about your employees' quality of life:
1. Your employees are burnt out. Labor shortages are a two-prong problem: you have to find personnel to fill a vacancy/vacancies, and you have to not drive away your current employees while doing that. Employees are quitting at record numbers these days, compounding an already bad situation for employers. 50% of workers report that their places of work are understaffed, and of those 50% -- nearly twice as many are considering quitting (43% vs. 23% in appropriately-staffed places of business).
How to fix it: Listen to your employees, talk to them about their pain points, and take immediate action. Conduct exit interviews for those who choose to quit so you really understand what your issues are.
2. Your employees feel under-appreciated. Workers are more overworked and stressed out than they have been in decades. They are under mounting pressure due to staffing issues. And if they work from home, they don't think you recognize how hard they are working. (In fact, this research shows that 70% of employees are working more hours than pre-pandemic, yet 51% of them worry that their manager doubts their productivity. Ouch.)
How to fix it: Take some time to say thank you, and be sure to reward loyalty: it's an outgoing characteristic in this super-competitive job market.
3. Your employees want flexibility. Offer work-from-home options if possible. The pandemic changed how the American worker feels about their work. All of a sudden, after years of rushed morning showers, rush-hour traffic, racing to clock in by 8:00, and sitting in an office for 8+ hours, *poof* they were able to access their work computer remotely from the comfort of their pajamas and their own living room. Traffic was a non-issue. They could work and kiss kids goodbye in the morning. As the pandemic restrictions lifted, they are left to wonder why they have to put up with all that again.
If working from home is not an option, find other ways to be flexible. Perhaps your employees would rather work more time over less days. Perhaps a slightly modified hourly schedule would make their lives easier.
How to fix it: The bottom line here is if you trust your employees to get their jobs done, stop micromanaging how they do it. And if you don't trust them, you have larger problems...
Your Workplace Culture Matters
Businesses that are known for their good deeds, good work they do in their communities, and as good places to work are going to be more untouched by the recent market shift. This is a long-term goal that you should keep in your sights at all times. Employees want a workplace with a collaborative culture, the old top-down management style has gone the way of the dodo. They want to feel communicated with, valued as an employee, and like they are a part of something good, something bigger than themselves.
Adjust Your Hiring Mindset
Reverse how you look at the hiring process. You used to ask yourself "Why should I hire this candidate?" Now, you need to consider how they feel: "Why would this candidate choose to work here?" Consider what makes you different than your competitors. It may be more than just money; re-read the above paragraph about culture for some things to think about. 😉
Hire for potential. Another issue you as an employer may notice is there are fewer qualified candidates applying for jobs. With so many job openings and so few workers in line to fill them, you need to consider that the Perfect Candidate may not walk through the door anytime soon. Now is the time to hire for potential. This makes the interview process so much more important, as the deciding factors that may ignite a hire are more subjective, more nebulous and more gut-reactive than they used to be.
Speed up the hiring process. Candidates are getting offers at rapid rates. If your recruitment-to-interview or interview-to-offer timelines are too long, you'll lose potential candidates to other jobs with each passing day.
Embrace the Changing Market
Maybe we as employers have had it a bit easy for a while, maybe we haven't challenged ourselves to grow to be the best we can for our employees. This changing market is like pulling on jeans after months of wearing sweatpants: you suddenly realize all the areas you have neglected. It's time to work out your place of business, tighten it back up, and make it the most desirable business out there! Because after all, how else are we going to get all these potential candidates to swipe right and say yes?!