Avoiding hiring hiccups
In this tight labor market, employers can’t afford to take any R&R on recruitment and retention.
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From the pages of In Business magazine.
If you’re looking for a new job, now is the right time. The current labor market is as bullish for job-seekers as it’s been in quite some time, and while that’s good news for workers seeking new opportunities, it’s bad news for employers who aren’t keeping up with the Joneses and offering more than just competitive wages and benefits.
To wit: In May, the rate of American professionals voluntarily quitting their jobs hit a 17-year high. That month, the U.S. quit rate, according to the monthly Job Openings and Labor Turnover Survey, or JOLTS, provided by the Labor Department, was 2.4%, the highest level since January 2001 and higher than the 2.2% rate attained during the peak of the housing boom. While 2.4% may not sound like a lot, that equates to 3.56 million people per month quitting their jobs, or almost 43 million employees per year.
To be sure, those workers choosing to move on did so for more than money, but it didn’t hurt either. Those who switched jobs in May experienced median wage growth of 3.8% versus 2.9% for job stayers. In other words, if you aren’t paying your people to stay, someone else is likely willing to pay them to go.
Recruiting and often more importantly retaining high-quality employees has fast become a critical function of not just human resources personnel, but all company leaders tasked with maintaining productive departments with low turnover.
The problem isn’t going to go away any time soon. The generation of employees who are just entering the workforce — Generation Z, profiled in an August IB feature — are going to require even more effort to recruit and retain.
“From a recruiting standpoint, I think we have a preconceived concern about Gen Z job hopping, says Mary Moua, recruitment sourcing specialist for Fairway Independent Mortgage Corp. “Because Generation Z expects instant results and knows we always have options in many aspects of life, we tend to move on to the next option if we are not pleased with service or other expectations.
“Same goes for employment — changing jobs within one to three years is more typical than it was 20 years ago,” Moua adds. “Employees expect more these days, like better benefits and perks, to work remotely, etc. If [those expectations are] not met, they may look elsewhere. Especially with the unemployment rate being so low, it works in their favor because talent is hard to find these days.”
Recruiting Gen Z requires much more effort than the generations that came before them, notes Ashlie B. Johnson, owner of Brooke Human Resource Solutions. Gen Z is much more independent and likely to investigate a potential employer prior to agreeing to an interview.
For instance, use of apps such as Glass-door is much more common for Gen Z, explains Johnson. It is very important for employers to look at their company as a brand and market it that way. Maintaining a social media presence and keeping up to date with changing trends is more important for the recruiting department than ever before.
“Gen Z is also more pragmatic than millennials,” adds Johnson. “While millennials were concerned with open office space, bean bag chairs, and collaborative/fun working environments, Gen Z grew up during the recession and is much more keenly aware of the value of a generous 401(k) match or stock options. Gen Z’s more aggressive attitude about advancement and increasing their wages over time also requires employers to acknowledge and put training and career development programs in place in order to retain this new generation over time.”
All of this may have employers throwing up their hands and wondering what they can do about it. If an employer is already providing employees with a strong wage and benefit package, chances are they have nothing to worry about.
It’s the companies that haven’t kept up with the times that have the most reason for worry. What might that mean? Salaries that are at or above industry average for the region are a great start, but it’s really the other perks that are proving to matter most for many workers — and no, that doesn’t mean putting a foosball table in the break room.
According to “65 HR and Recruiting Stats for 2018,” an annual survey prepared by Glassdoor, an online database that features millions of company reviews, workers who changed jobs earned an average pay raise of $2,724 per year, or 5.2%. Glassdoor also provides CEO approval ratings, salary reports, interview reviews and questions, benefits reviews, and office photos — all shared entirely by those who know a company best, the employees.
Digging deeper, 83% of millennials say they are engaged at work when they believe the organization fosters an inclusive culture. Only 60% said they were engaged when they believe their organization does not foster an inclusive culture.
Diversity and inclusion rank high among workers’ priorities, as does parental leave, another area many companies still lag in. The Glassdoor report notes just 58% of employers offer at least some replacement pay for maternity leave. Of those, just 10% offer full pay. Only 15% of employers offer some paid time off for spouses/partners of birth mothers. At companies that provide paid leave to new parents, mothers receive nearly twice as many days as fathers — 41 days versus 22 days.
Paid time off is another area where employers can’t skimp. According to Glassdoor, the average U.S. employee (of those who receive vacation/paid time off) has only taken about half (54%) of his or her eligible vacation time/paid time off in the past 12 months. Employers also can’t assume that employees who don’t use their vacation time are better workers. Employees who forfeit vacation time are more likely to be low performers: they are less likely than non-forfeiters to be promoted or receive a raise or bonus.
Not only does not taking vacation time reduce employee performance, which impacts the company’s bottom line, it also has a larger effect on the economy. In 2016, 662 million vacation days were left on the table. If Americans had used all of the vacation time they earned in 2016, it would have contributed $236 billion in spending for the U.S. economy, the Glassdoor report notes. Still, 47% of workers surveyed have felt shame at work for taking their well-deserved vacation, and 47% have felt the need to justify taking their vacation days.
Finally, the Glassdoor survey highlights why companies can’t overlook wellness. Eighty-five percent of employees/job seekers expect their employer to support them in balancing their life between work and personal commitments. Additionally, 88% of employees who feel they have high well-being say they are engaged at work, versus 50% of employees who feel they have low well-being; 91% of employees who feel they have high well-being say they intend to stay at their employer, versus 55% of employees who feel they have low well-being.
Wellness also affects the bottom line. According to the Society for Human Resource Management (SHRM), 77% of organizations indicated their wellness program was somewhat or very effective in reducing health care costs, and 88% rated their wellness initiatives as somewhat or very effective in improving employees’ health. A four-year study of employer group wellness programs also found that health care costs rose at a 15% slower rate among wellness program participants when employers consistently offered a wellness program to their employees. The American Journal of Health Promotion also noted in a 2015 report that every dollar invested in company wellness programs returned the original dollar plus $2.38.
That’s a lot to digest, but the reality is attracting and retaining employees doesn’t have to be an uphill battle. In fact, local small employers and staffing experts contend it really amounts to creating an environment where employees feel supported and management responds to their needs.