Quick Look: The majority of companies may be “back in business,” but there’s a new challenge plaguing business leaders: jobs are available; yet, there’s not enough people willing to support them. This labor shortage is putting employees in control and companies scrambling to stay competitive. Now, more than ever, it’s essential for businesses to take an in-depth look at their current offerings and create a benefits strategy employees today will value.
Furloughs and layoffs were a glaring trend of 2020 as a direct result of pandemic shutdowns. And, many companies able to keep their employees switched everyone to working from home. It was an uncertain time with no cure-all solution. Then, things slowly began to shift in a positive direction.
Near the end of 2020 and into 2021, companies began to resume in-office activities or switch to a hybrid model, though many still undecided about whether remote working would be permanent. However, as one problem began to fade away, companies were faced with a brand new challenge as employees weren’t sure if they were coming back at all.
What’s been deemed as a “labor shortage” isn’t due to the number of available workers who can fill open jobs, but rather the difficulty in finding workers who want to fill them. According to the U.S. Department of Labor, the monthly job growth average as of August 2021 was 586,000. Meanwhile, 18+ months of extreme ups and downs gave employees a clearer perspective and meaningful time to rethink their options.
A Shift in Employee Mindset
According to a July 2021 survey, approximately 55% of people in the workforce are likely to look for a new job over the next 12 months. Reasons include safety concerns and prolonged unemployment benefits, which have made people hesitant to return to work. While another percentage of people have decided to extend their skill set, invest in higher education, and ultimately, seek opportunities elsewhere.
This societal shift has been felt on every level, as an astounding 95% of CFOs of major U.S. corporations say it’s harder to find workers for open positions, according to the Q3 2021 CNBC Global CFO Council survey. Even with the rising number of job openings, increasing wages, and the end of unemployment benefits, recruitment for new hires is still problematic across the board. One thing is clear: employers must do more to incentivize qualified applicants back to the workplace. Benefits which were once lucrative may not have the same luster as before. Or a lack of benefits is causing current employees to leave and potential applicants to look elsewhere.
Although traditional incentives like competitive salaries, health insurance, and paid time off still resonate, many employees are willing to overlook these to gain more flexibility and freedom in their next role. A survey conducted by Ally Bank revealed nearly 40% of consumers cited remote work, flexibility, and career advancement as their top desires, a sentiment which has been echoed throughout all industries as key areas where companies can build new strategies.
As a result, companies are looking to the help of a professional employer organization (PEO) company for customized HR solutions, expertise, and guidance. In this employee-led environment, it’s important to reassess recruitment best practices by paying attention to what employees want most.
Offer Remote or Hybrid Work Options
Months of enduring a global shutdown revealed most jobs can be performed remotely. After adapting to this work-from-home shift, many want this option to remain. Although each industry is different, and some jobs require in-office or onsite job responsibilities, offering a remote or hybrid work option is more alluring to job candidates.
Additionally, this option can benefit both employer and employee. For the employer, it reduces the amount of office space needed, which may significantly cut down on operational costs. As for the employee, a remote work option highlights a culture of autonomy and trust. It also cuts down on hours lost during commuting which gives back more time to their home life.
There are multiple ways to test a remote or hybrid work setup and customize it to what makes sense for each company. A PEO company can help establish guidelines and communication to ensure it’s beneficial across the board.
Implement Flex-Time Hours
Flex-time hours allow employees to perform their jobs at times when they are most productive. With this benefit, employees are still responsible for working the same number of hours as a traditional schedule but with room to maintain a better work-life balance. More companies are considering this strategy to retain top talent, and this benefit may soon become the rule rather than the exception.
A 2021 EY survey revealed more than 54% of employees from around the world would consider leaving their job if they are not afforded some kind of flexibility of when and where they work, with millennials twice as likely to quit than baby boomers. These statistics reveal a shift post-pandemic but also the values and expectations of the current work demographic and how they differ from before.
Create Diversity and Inclusion Initiatives
The demand for diversity and inclusion initiatives continues as millennials and Gen Z seek out employers who align with their values. Excluding this area from a benefits strategy will prove to be a disadvantage to companies who want to attract prime candidates since millennials are predicted to make up 75% of the workforce by 2025, and statistics show diverse companies have 2.3 times higher cash flow per employee.
Increasing diversity and inclusion initiatives begin with opening up communication within the workplace and providing education and training for company leaders. A PEO company can work with leadership teams to create a roadmap and specific opportunities and goals which provide a welcoming environment for all in a way which feels authentic and purposeful.
Give Candidates a Reason to Choose You
Facing a labor shortage where recruiters can’t fill the roles needed to conduct business negatively affects a company financially, operationally, and culturally. Fortunately, a PEO company like ExtensisHR has the experience and expertise to nimbly navigate these challenging times. By updating and adjusting HR practices and strategies to meet the needs and desires of employees today, you can position your company as a competitive force.
Want fresh ideas and strategies to incentivize current and potential employees? Our HR experts are here to help.