When we conducted our Second Annual Economic Survey earlier this year, one of the themes that kept emerging was the concern Ohio businesses have about the current job market. Respondents identified the job market and lack of skilled workers as two of their top three concerns facing the State’s economy. And our micro- and small-business respondents expressed even greater worry about unemployment and the labor market.
When it comes to the job market, what are the biggest challenges? More importantly, what can business owners do to address them?
- The Great Resignation
By now, most people have heard of “The Great Resignation,” a major disruption in America’s labor force driven by the pandemic. In 2021, over 47 million American citizens quit their job (U.S Bureau of Labor Statistics1), and the trend continued in 2022, with more than 50 million workers walking away from their jobs. What is driving employees to quit their jobs? Many of those resigning were seeking better work-life balance, flexibility, strong company culture, and increased compensation.
What can business owners do?
Use exit surveys to research the driving forces behind employees departing your organization and where appropriate, implement positive changes to address the issues. Listen to your employees and strive to keep your talented workforce onboard. Also, identify your top performers and meet with them to understand their priorities. Then design long-term plans around each one to strengthen your chances of keeping them. Investments in training and education, new responsibilities at work, greater flexibility in scheduling – as well as compensation – all can show an employee how valued they are.
- Employees Demand Flexibility
Employers hoping to have their teams all return to the office full-time may want to reconsider. While initially, it was difficult for many workers to adjust to working remotely during the pandemic, many found their groove AND found that the flexibility afforded them greater work-life balance. As an added benefit, employee performance didn’t suffer because of these hybrid models. It is estimated that by 2025, over 75% of workers will demand hybrid or remote work.2 According to Gallup, 91% of US workers said they’d like to continue working some of their workweek from home, and 30% of workers said they’d look for new employment if they were asked to return to the office.3
What can business owners do?
Candidates are looking for more than a competitive salary. Jobs that have required in-person attendance have had a harder time retaining workers. Offer hybrid work models and flexible schedules. Remote work is a strategy to attract top talent to fill vacancies in your workforce. In addition to scheduling, some businesses are helping their workers navigate childcare. Others are offering innovative benefits. Flexibility and creativity are key to remaining competitive and appealing to employees.
- Diversity & Inclusion
For many companies, diversity, equity, and inclusion (DEI) has become an integral part of recruitment strategy, and nearly 75% of potential employees identified commitment to a diverse workforce as important to them when choosing a job.4 Society is demanding change, and the workplace must evolve, as well.
What can business owners do?
If DEI initiatives are not yet a part of your strategic objectives, they should be. According to a study by Indeed, 55% of job seekers say it’s very important that they work in a company that prioritizes diversity.5 There are many advantages to a diverse workforce, including more creativity and problem-solving.
- Finding the Right People
No matter the industry, employers are struggling to find the best people to fill their open roles – people who have a good blend of skills and strengths. In 2022, 75% of employers reported struggles in finding the right talent (Forbes).6 Companies complain that there aren’t enough talented candidates, and applicants complain that job requirements are too specific. The global talent shortage is the highest it’s been in over a decade. What can be done to narrow the skills gap?
What can business owners do?
Increase the pipeline by utilizing tools, such as social media, to broaden your reach through the recruitment process. Establish stronger relationships with area schools and universities and increase campus recruitment efforts. Establish transparency in your postings – from the job description to salary requirements.
- Happy Employees Stay
If employers can learn anything from The Great Resignation, it’s that employees can and will leave if they are dissatisfied in your organization, and that as a result, employee satisfaction and retention must become a priority.
What can business owners do?
Ideally, keeping your current staff is preferable to hunting for new employees, so do the work to strengthen employee-employer relationships with your team. Be sure that an annual survey of employee satisfaction and engagement is part of your HR plan. Well-structured surveys will identify not only the pain points your team is facing but also determine how or if they can be improved upon. Those seeking jobs are paying attention to corporate reputation, so brand management and reputation will impact their decision-making. It won’t matter how high of a salary you offer if your company has a reputation for being a difficult or depressing place to work. - Time to Hire = Too Long
Job hunting is often a stressful process, and that’s made worse because of the time involved. A recent study reported that 20% of job applicants say the hiring process takes way too long.7 To make matters worse, there’s a fair amount of ghosting on both sides, and the lack of communication can make the hunt even more demoralizing. Over half of Gen Z workers won’t complete an online application if the hiring process is complicated or too long.8
What can business owners do?
Simplify things where you can. Evaluate your hiring process and make it a priority to streamline the process. Where are the bottlenecks? Where can time be saved? What information is necessary at this stage of the applicant process and what can be saved for later? Emphasize communication every step of the way. If you say you’ll be in touch, follow through. Don’t leave candidates hanging if you’ve decided to go in another direction.
- Solving the Job-Hopper Problem
Millennials, who currently make up the largest percentage of working employees and 39% of the global workforce, are known as the job-hopping generation.9 Along with Gen Z, these workers usually spend no more than two years at each employer because moving employers proves more lucrative than staying loyal to one.10 A recent Gallup poll indicates the cost of this high turnover can be counted in the billions of dollars for businesses and is only expected to increase as millennials and Gen Z occupy a larger share of the workforce as time goes on.11 Some of this can be attributed to the common 2% – 5% annual cost of living salary increases workers receive when staying at their current employer compared to current and recent inflation data. Workers feel these small increases are not sustainable, and millennials, who realize a 10% – 20% wage increase when job-hopping, seem to find a solution in new employers.12
What can business owners do?
Value and trust go a long way with the job-hopper generations. Consider enacting visible and thought-out benefits and policies aimed at showing workers they are valued. Offer competitive healthcare and retirement packages, expanded paid time off policies, additional vacation, and flexible work schedules where possible. Think about ensuring your wages meet or exceed those of your local sector competitors. Enacting some of these changes may be costly but compare the cost of retention with the cost of turnover at your business and use that data to guide your efforts.
The challenges we face in today’s job market are multifaceted and complex, but they are not insurmountable. It’s clear that for businesses to thrive, the traditional approach to employment needs a refresh, and the solutions are within grasp.
Through the thoughtful implementation of flexibility, attention to diversity and inclusion, commitment to employee satisfaction, and a responsive approach to hiring, we can not only meet the challenges before us but excel in this new employment landscape. Let us not be daunted by the obstacles but inspired by the possibilities.
SOURCES:
1. Job openings and quits reach record highs in 2021, layoffs and discharges fall to record lows Rick Penn, Economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics and Eric Nezamis, Economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics June 2022
https://www.bls.gov/opub/mlr/2022/article/job-openings-and-quits-reach-record-highs-in-2021.htm
2. Understanding America’s Labor Shortage: The Most Impacted Industries Stephanie Ferguson Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce Published July 12, 2023
https://www.uschamber.com/workforce/understanding-americas-labor-shortage-the-most-impacted-industries
3. The Future of Work: How Hybrid and Remote Workplaces are Changing the Employment Landscape for Older Workers CWI Labs June 15, 2023
https://www.cwilabs.org/the-future-of-work-how-hybrid-and-remote-workplaces-are-changing-the-employment-landscape-for-older-workers/#:~:text=A%20recent%20article%20in%20Forbes,a%20permanent%20hybrid%20work%20model
4. How To Develop An Employer Branding Strategy In 2020 Kelsey McKeon June 18, 2020
https://themanifest.com/digital-marketing/employer-branding-strategy-2020
5. 5 Advantages of Diversity in the Workplace
https://www.indeed.com/hire/c/info/benefits-of-diversity
6. How To Be Agile In A Talent Shortage Eric Friedman Forbes Councils Member August 9, 2022
https://www.forbes.com/sites/forbeshumanresourcescouncil/2022/08/09/how-to-be-agile-in-a-talent-shortage/?sh=4599e1b6346f
7. 10 recruitment trends to keep an eye on in 2023 Priya Sunil October 3, 2022
https://www.humanresourcesonline.net/10-recruitment-trends-to-keep-an-eye-on-in-2023
8. Poor Hiring Processes Cause 75% of Gen Z to Abandon Promising Job Applications Kara Prone
Director, Global Content and Communications, Bullhorn September 28, 2022
https://www.businesswire.com/news/home/20220928005227/en/Poor-Hiring-Processes-Cause-75-of-Gen-Z-to-Abandon-Promising-Job-Applications
9. Gen Z In The Workplace: How Should Companies Adapt? Vibha Sathesh Kumar, imagine.jhu.edu 2023
https://imagine.jhu.edu/blog/2023/04/18/gen-z-in-the-workplace-how-should-companies-adapt/
10. Solving the Mystery of Millennial and Gen Z Job Hoppers Tejas Vemparala, Staff Writer, businessnewsdaily.com 2023
https://www.businessnewsdaily.com/7012-millennial-job-hopping.html
11. Millennials: The Job-Hopping Generation Amy Adkins, gallup.com 2023 https://www.gallup.com/workplace/231587/millennials-job-hopping-generation.aspx Report: https://www.gallup.com/workplace/238073/millennials-work-live.aspx
12. How Much of a Raise Should I Ask For? Factors To Consider Jason Harper, Writer, indeed.com 2023
https://www.indeed.com/career-advice/pay-salary/how-much-of-a-raise-should-i-ask-for?
