The Great Resignation. You may be sick of the term, but you’re feeling the effects, whether it’s as a business owner, an HR professional, or anyone who hires people to do a job. Even as an average consumer, you’re affected by ongoing supply chain issues due to a lack of workers. The numbers don’t lie, and while not everyone who tells a survey they’re ready to quit is actually going to do so, a significant number of them are—look no further than the record-breaking 4.4 million people who quit their jobs in September. It’s a trend that’s not going away any time soon.
The focus has been on certain industries and job categories, but the truth is that the effects are everywhere, and no industry should feel comfortable or immune. Food service and retail have been the most public face of the problem, but workers everywhere are re-evaluating their situations, and as they become choosier about pay and benefits—even what jobs they are willing to work at all—it is affecting the labor market. If you weren’t thinking about this before, you should. The shortage of workers may be obvious when you see an empty spot on a grocery store shelf or hear about the backlog of container ships waiting outside many ports, but there are plenty of other effects to consider.
All kinds of companies are offering increased pay and better benefits to attract the people they need. Workers have the edge in hiring right now, particularly in tech, but to some degree everywhere. Whether it is higher pay, permanent remote work options, office perks, or other benefits like better stock options and 401(k) matching, workers aren’t afraid to ask employers to match their value with benefits (and they’re getting them). It may be a while before things settle down enough to see what kind of pandemic-related changes are permanent and which are not. In the meantime, we all have to figure out what we can and can’t do in terms of hiring.
As a business owner, I’m aware that the hiring market is very competitive. And given that my business is a staffing firm, my team and I are used to recruiting in tight labor markets. For example, IT is one of our areas of expertise, and the demand for it often outpaces supply; however, we’ve been through competitive talent markets across numerous other industries, too, and we recognize the signs right now, albeit through the lens of our new reality. The trend is not going away and it’s affecting both contingent and permanent hiring; time to fill is lengthening and rates are trending up. Companies who don’t respond in kind risk falling behind in terms of attracting and hiring the best.
I want to get this message out so others can avoid being caught off guard. Nobody likes to hear that something is going to cost more—and I don’t like to be the one to tell you—but it’s probably going to cost more.
You can prepare for it, though. Here are four suggestions:
- Review your compensation and benefits: Take a look at what you are offering and compare it to what the marketplace is currently offering. Where are you not in line? Knowing your gaps will help you understand why you might be losing candidates to other companies. Once you know, you can figure out how to address the issues.
- Review your budget: Where can you afford to meet people’s wants, and where is it just not an option? Can you offer remote work or raise salaries? If not, how will you compete? Where is it most beneficial to spend additional money and where can you wait or hire less experienced people? Identify critical open positions that you have to pay more for and then plan and allocate budget accordingly.
- Focus on retention: Avoid hiring issues by focusing on keeping your current employees! The fewer people you lose to The Great Resignation, the better off you will be. Identify the most critical and highest-performing teams/individuals and invest in them. Make sure that you are addressing their concerns, first and foremost, but a top-to-bottom review is a good idea, too.
- Train and promote from within: The more experience or seniority you need from a new hire, the more difficult or costly it may be to hire them. Consider your current employees: Who could take on more responsibility with a little training? Who is ready to be promoted ahead of your “usual” schedule if they are mentored? Hiring to fill lower-level positions that require less experience will likely be easier and less expensive.
In so many ways, these are difficult and unprecedented times, but always remember that people are what make business(es) work. We’ve been resilient enough to make it this far, and I have no doubts that we’ll continue to thrive. This is a period of change, learning, and growth (for the better, I believe). I hope my observations help others, even a little. Together we’ll figure out how to adjust, create workplaces that respect and respond to employees, and build an economy that benefits everyone.