For the first time ever, there are more job openings available than there are eligible people to fill them. It should come as no surprise that employers of all sizes are struggling to find qualified employees for more than 6.7 million job openings.
Oregon State University conducted a study to answer two questions about the hospitality industry labor shortage:
- Why is there is a labor shortage in the hospitality industry?
- What are some possible solutions to the labor shortage?
The study indicated that millennials are the primary reason for the labor shortage. The study found that they were the least satisfied with their jobs; most likely to leave the industry within a five-year period; and that they view compensation differently, placing value on workplace culture, professional growth, and task variety. The authors concluded that the issues are unlikely isolated to the millennial generation but are an emerging trend of the future workforce.
On the flip side, baby boomers, about a third of today’s workforce, are now working longer and staying in the workplace past retirement ages. Research from Gallup found that baby boomers, who strongly agree that they currently “have enough money to do everything [they] want to do,” expect to retire at age sixty-six. Baby boomers who strongly disagree with this statement predict they will retire significantly later, at age seventy-three.
Today it is critical to provide “reskilling” and “retraining” for your current workforce to meet future needs and to start thinking about the workforce you have today as your primary workforce of tomorrow. There is no “new wave” of talent entering the workplace to fill the 6.7 million job openings. You have to develop your own talent.
Consider your location and the affordability of the area so your employees can live close to where they work. An article in The Denver Post illustrates how a tight supply and high demand for housing makes it challenging for workers to find living arrangements in an area with lots of work available. The article states, “They are living in tents in Crested Butte. In Telluride, they could soon be squeezed into portable shelters. They are in motels not suited for ski vacationers in Steamboat Springs. And in Breckenridge, some locals are living in their cars.” This situation is becoming more prevalent in a vast majority of vacation destination markets throughout the United States.
Let’s not forget about the cost of childcare. According to the fifth annual Cost of Care Survey, childcare costs rose for the fifth year in a row. The survey found that childcare is less affordable for families than it was a year ago. One in three families (33 percent) spend 20 percent or more of their household income on childcare, 19 percent spend 25 percent or more, and a whopping 71 percent spend at least 10 percent of their annual income on childcare. For comparison, the U.S. Department of Health and Human Services defines affordable childcare as up to 7 percent of the household income.
Filling open positions requires a new way of thinking about recruitment, compensation, training, and other incentives you might not have in place. With multiple generations and different needs in the workplace, you need more than a “one size fits all” approach to attract, engage, motivate, and retain talent.
Additionally, companies are starting to relax their standards around education and experience requirements. There is a shift in relaxing preemployment drug testing to exclude marijuana as a way to attract candidates.
Finally, reassess your recruitment practices and procedures so that you are prepared to make offers in days versus weeks. Today’s applicants are typically juggling several job offers. Make sure your offer is the best and the one the most closely fits the individual’s needs.
All of these factors are challenging employers to think differently about the following:
- Tapping into diverse recruitment pools
- Buying talent through compensation
- Recruiting at the speed of light
- Retraining: developing your internal workforce
Tapping into Diverse Recruitment Pools
Employers can step up creativity with how and where to find new talent. Consider different demographics, such as veterans, military spouses, and nonviolent ex-convicts—three demographics to start with. Remote workers, disabled workers, and individuals reentering the workforce are additional recruitment pools.
Looking for hardworking, motivated, and ethical employees? Veterans have the proven ability to learn new skills and concepts. They know and understand the dynamics of leadership, and they perform well under pressure. Veterans have a respect for procedures and know what it means to do “an honest day’s work.”
The Society for Human Resources Management stated in a recent article, “More veterans are college educated now than ever before with rates surpassing those of civilians. Because of a highly competitive military recruiting market and the implementation of the Post-9/11 GI Bill, we’ve seen a dramatic shift and significant increase in the level of education our service members have achieved before, during, and immediately following their time in service.”
It is a major challenge for military spouses to find jobs and build a career while supporting their military service member. Military spouses often get overlooked as a strong recruitment source even though there are hundreds of military bases throughout the United States for employers to partner with.
Just like veterans, military spouses have diverse backgrounds. They tend to be more adaptable and are less likely to become overwhelmed in a stressful or changing environment. According to the Military Family Life Project, about 10 percent of military spouses have a master’s degree, MBA, or professional degree.
One of the greatest ROIs in hiring military spouses is retention. You can train them while they are stationed near your location and then continue to retain them as a remote employee when they transfer duty stations.
Instead of focusing on the perceived risks of hiring ex-convicts, hiring individuals with previous convictions can significantly expand your applicant pool. Ex-convicts are a disadvantaged recruitment pool and are often found to be incredibly hard working and grateful for the chance to excel with an employer.
This is a great time to reevaluate your current recruitment and hiring practices to ensure that you don’t automatically exclude ex-convicts from your applicant pools.
You can fill workforce staffing and skills gaps by recruiting more remote workers. You will gain access to qualified applicants throughout the country (and internationally), and you open up another pool of individuals who prefer to work from home or have specific hours available to work.
While not all positions are suited to remote workers, there are several responsibilities that can be completed remotely as a full-time or part-time position. Effectively hiring and retaining remote workers requires a shift in the company culture as well as careful planning for the workflow, performance management, communication, and engagement of the remote employees.
It is a challenge for people with disabilities to get their foot in the door. Many employers don’t have procedures (or goals) to recruit from this demographic. Working with local, state, and federal agencies to create a plan to recruit, hire, and retain people with disabilities is a key step businesses can take to increase their workforce. This group is willing to work hard and is excited for an opportunity to contribute.
Individuals Reentering the Workplace
There are a significant number of family members reentering the workforce after raising children, taking care of elderly parents, or caring for a family member. Others who have owned a small business or who retired early are now reentering the workforce because they now need or want a job. This is a great resource for a part-time workforce.
Look for transferable skills and soft skills that identify what they have done, what they know, and how they can utilize their skills in your business. Individuals returning to work are an asset to businesses. The first step is to create training programs to reintroduce these individuals back into the workforce. Skill sets can change but aptitude rarely does.
Buying Talent through Compensation
It is now officially an employee market, which is especially brutal for businesses with fewer than fifty employees who can’t compete with the pay and benefits of larger firms. Buying talent means that you are going to be paying more in the form of higher wages, competitive benefits, paid time off, performance-based incentives, and other types of compensation outside of base wages. If you haven’t already done so, now is a great time to rethink your compensation and benefits strategy to address what is most important to the individual(s) you are looking to attract. Companies are starting to offer more fringe benefits, such as extra time off; time to volunteer or participate in children’s activities; training seminars and conferences; flexible work schedules (hours/days); and company-issued cell phones, tablets, and laptops.
Calculating the value of your employee’s total compensation package works as a recruitment and retention tool. Providing total compensation statements illustrates for applicants and current employees what their total compensation is, or will be, based on both actual wages and fringe benefits. For more information on marketing the value of total compensation statements, visit HR4VR.com/Media.
Recruiting at the Speed of Light
Applicants today are typically fielding several job opportunities. Putting applicants through long processes is no longer effective. You need to find ways to be more flexible, address things on the spot, and make hires within days, not weeks. Candidates who apply still need to be recruited. Listed below are some things that are becoming more mainstream when recruiting great hires during low unemployment.
- Immediately start contacting qualified candidates and leads by texting them and asking when they can interview by phone or in person. Sending emails and waiting for a response or calling and leaving a voice message is less effective and wastes valuable time.
- If your company uses an applicant tracking system, make sure that you are checking applications frequently, every couple of hours. I recommend removing filters for education, experience, and other criteria that restrict the resumes flowing to managers. Too often, great candidates can fall into a black hole and become lost because of unnecessary filters.
- Be prepared with competitive compensation. Know what you are willing to offer the candidate and have it ready to go. Many states no longer allow you to ask about salary history. However, you can ask what the applicant is looking to earn. Too often, companies spend time finding the right person and then when they present an offer, the candidate is outside of the range, which wastes a lot of time and causes everyone involved angst.
- Employee referral programs work and are typically a company’s best recruitment tool. In this economy, increasing your referral fee for hard-to-fill positions is a no brainer. For example, a $2,000 referral fee for a $40,000 salaried position may be easy to quantify given the cost of hiring and the lack of applicants.
- In the past, the best practice was to “hire slow and fire fast.” Today, it is all about hiring fast. Take time to review your internal hiring process to find areas that you can eliminate and bottlenecks where you might be able to speed up the process. It is all about connecting with the individual as quickly as possible. Scheduling interviews when all the decision-makers are available is key so you don’t have to bring candidates back for additional interviews.
- Make immediate employment offers. Being prepared to present qualified applicants with an offer the same day as the interview is critical in today’s low unemployment environment.
Retraining: Developing Your Internal Workforce
The Manpower Group conducted a survey of 2,000 employers and identified that the number one skill that is hard to find are skilled trades. Maintenance technicians, landscapers, electricians, plumbers, and other skilled trades positions are some of the most challenging positions to fill.
With soft skills, the number one skill gap is communication skills. Sixty-one percent of respondents cited written and verbal communication as the largest gap they see with applicants.
Here are some things trending with businesses today as they develop their workforce:
- Companies are starting to identify new skills their employees might be interested in learning and are then providing them with the educational assistance and time to obtain the skills. Additionally, they are creating internal programs to develop the talent they can’t find.
- Onboarding and orientation programs now include more than what is necessary to complete the employee’s job responsibilities. Companies are creating training programs around written and verbal communication, basic workplace professionalism and etiquette, and other core business practices to assist candidates with entering or reentering the workforce.
- Work with baby boomers to create knowledge transfer programs for internal employees when they retire. Pairing millennials with baby boomers to teach them how to use technology more effectively in the workplace is another great retention strategy.
As you wind down from your summer, or wind up for your winter, thinking more broadly on how to recruit, compensate, train, and retain your workforce today and in the future will be time well spent.