As we discussed in our post about how to incentivize workers to come back to work, many workers are reluctant to return for a variety of reasons such as the inability to find adequate childcare, concerns about spreading and/or contracting the still very-present COVID-19, and not wanting to give up unemployment benefits. But there is an even bigger problem facing talent acquisition and recruiters today—a shortage of willing and able workers.
It’s true that many Baby Boomers are coming up on retirement age, and 2020 saw an exodus of 3 million Baby Boomer workers. In the wake of the pandemic, many people have been rethinking the directions of their lives and careers. And as economies grow and people acquire more wealth, fertility rates and populations naturally decline. So the question becomes: How can we address the labor shortage and keep the economy afloat?
How Did We Get Here?
It wasn’t just the pandemic that caused this labor shortage, although it didn’t help. The total cost of labor is, in fact, going up. Workforce automation, or the creation of replicated tasks without the need for human interaction—which just a few years ago was hyped as replacing jobs—has been slow to roll out. Millennials and Gen Z are demanding a better work-life balance as they stand to become the wealthiest generation in history by 2030 based on the wealth they’ll inherit from their Baby Boomer parents. (Source: EMSI)
How Can Companies Win the War for Talent?
1. Put your money where your mouth is.
Both McDonald’s and Amazon have challenged the Federal minimum wage and are paying higher wages to attract talent in this tight labor market. Jimmy John’s is offering higher wages plus a signing bonus. Many hourly workers work multiple jobs but their loyalty is always going to be where the pay is the highest. Loyalty translates into retention.
2. Invest in the Employee Experience.
We always say that your employees are your best brand advocates. From perks to training, take the time to outline a career path that promotes new skills and longevity. Focus on developing existing talent so you can promote from within. Ashley Furniture created an Advanced Manufacturing Institute and uses it to target high school graduates and educate middle schoolers on manufacturing. Schneider Electric offers Schneider Electric University as well as 200 free courses in their Energy University to educate anyone on energy efficiency and data center topics.
Be sure to communicate existing and new perks on an ongoing basis. You’ll be surprised how many employees are not aware of their eligibility for perks or training programs even though you remind them with emails and internal communication.
3. Look outside the norm.
In this tight labor market, it may be time to consider part-time, gig, or contract workers rather than full-time workers. Today in the U.S., nearly one-third of workers are gig workers.
Further, not every worker needs a college degree. Conversely, just because someone has one or an advanced degree doesn’t necessarily mean they are overqualified. People with various experiences and degrees work at companies for different reasons depending on where they are in life.
4. Reward employee referrals.
Chipotle is not only raising wages, but they’re also offering employee referral bonuses of $200 for crew members and $750 for apprentices or general managers. Maryland-based convenience store chain Royal Farms is offering employees a $300 referral bonus as it aims to hire 4,500 employees for the remainder of 2021.
The bottom line is talent acquisition needs to rethink recruitment. Even with the government putting stricter guidelines on unemployment, employers still need to do their part in investing in the future workforce and making sure they have a retention strategy in place. I highly recommend EMSI’s Demographic Drought report as follow-up reading to this article.