Quick Look: The labor market is a hot topic now – but a lesser-known fact is that the challenges employers are facing are projected to continue for years (and potentially decades) to come. Now is the time for brokers to explore expected labor market trends as well as the best ways to help their clients adapt to the changes coming their way so they conquer the ever-changing market.
It’s no surprise that the labor market is challenging for employers right now. But did you know the issues businesses are facing – like labor shortage – aren’t expected to go away anytime soon? Here’s why the labor market is anticipated to continue slowing down, and how brokers can help their clients prepare and stay ahead of the curve.
More jobs, fewer workers: the paradoxical market
The biggest hurdle of the future labor market is the predicted broadened gap between the number of jobs and the number of workers. For example, the U.S. labor force is projected to grow by 6.5 million workers through 2030, according to the Bureau of Labor Statistics – compared to almost 10 million each year from 2009 to 2019, and even larger numbers in previous decades.
What’s prompting the slow-down? Data suggests that it’s being caused by a slower population growth inside the U.S., as well as fewer migrants arriving from other countries. Additionally, during the COVID-19 pandemic many Baby Boomers decided to retire early, and some parents of young children reduced their hours or left the workforce entirely while schools and daycares were closed.
Meanwhile, while the workforce is shrinking, new roles are also being created at a record pace. For example, LinkedIn’s Jobs on the Rise report states the pandemic has created a surge of demand for human-centric roles, and hiring for frontline employees in the eCommerce industry grew 73% year-over-year. That growth isn’t going away, either – the Bureau of Labor Statistics predicts that employment will grow from 153.5 million to 165.4 million jobs from 2020 to 2030.
How can your clients prepare?
While the statistics may seem daunting, there are several ways you can help your clients prepare as the labor market continues to evolve. Partnering with a professional employer organization (PEO) can equip you with solutions to assist clients in attracting and retaining talent.
Offer competitive pay and benefits
Candidates are drawn to strong job offers including competitive pay and robust benefits. An attractive offer can even lure unemployed people back into the workforce.
A PEO can help your clients assure they are offering a competitive pay rate by conducting compensation analysis and salary benchmarking. Employers can also consider offering the most desirable employee benefits like medical, dental, and vision insurance, flexible working hours, and more vacation time. Supplemental benefits like telemedicine access, mental health benefits, tuition reimbursement, and more can also give clients a leg up – at little to no cost.
Re-evaluate standard procedures
The changing job market calls for changing hiring status quos. Clients can broaden their list of potential candidates by considering applicants that they may not have in the past.
This can look like considering candidates’ ambition and potential, instead of simply their hard skills, job experience, and diploma. It can also include clients hiring outside their traditional geographic area, recruiting retirees who have re-entered the workforce, and sourcing candidates from a mixture of job boards, conferences, colleges, and diversity LinkedIn groups.
It’s important to note that as clients expand their recruiting efforts, they should consult their legal counsel or their PEO’s HR experts to ensure their policies are compliant for hiring, pay equity, time and labor, tax reporting, and more.
Reassess recruiting and onboarding processes
With an increasing need for new hires comes an increased need for recruiting and onboarding.
According to SHRM, the average time it takes to hire a new employee is 36 days. That amount of time – multiplied by numerous new hires – can easily take a toll on your small- and medium-sized business (SMB) clients’ bandwidths.
Brokers can help by encouraging clients to reassess their hiring processes and identify any inefficiencies. Through partnering with a PEO, brokers may also be able to provide access to sophisticated HRIS technology solutions and mobile applications that enable SMBs to post job openings, track applicants, add new hires, and streamline the onboarding process.
Optimize company culture
In an increasingly competitive labor market, company culture is becoming more important than ever. A top-notch culture used to be something that employees felt lucky to have – now it is becoming something they expect to have.
Encourage clients to appeal to candidates by offering accessible leadership, work-life balance, team-building activities, virtual events, and more. These components aren’t one-time items that SMBs can check off their to-do list – they require constant effort and evaluation. By offering a PEO relationship featuring a dedicated HR manager – ready to advise on any aspect of company culture – brokers can make these seemingly complicated projects easy.
Reskill and upskill current employees
One of the best places for SMBs to find the talent they need is right inside their own company.
Reskilling (teaching employees the skills needed to do a new job) and upskilling (teaching employees the skills needed to add to their current role’s responsibilities) is a true organizational win-win. Not only can your clients cultivate the skill sets they need in-house, saving them time and money while contributing to a positive company culture, but they can also use these programs to attract new talent. A whopping 78% of Americans report that corporate learning and development programs are important to them.
Helping clients embrace change
The evolving labor market can be intimidating – but it doesn’t have to be. As a trusted adviser, you can help your clients be proactive and stay a step ahead of their competition as job scarcity continues. By working with a PEO like ExtensisHR, you can help them offer enticing benefits packages, connect them with dedicated HR managers to deliver personalized guidance, provide them access to a mobile-first HRIS designed for today’s work anywhere world – and more.
Are you looking to help your clients navigate the future of the labor market? The experts at ExtensisHR can help.