If you’re reading this, you already know the drill: there’s a labor shortage. Regardless of which industry you’re in, everyone, everywhere could use an extra set of hands. Even as new workers enter the field every day, much of the working population is ageing out, and there are specific immigration and migration issues, so people are doing more with less. Every few days there’s a new study, a news article, or some politician touts their knowledge of how we got here and about how robust the economy is.
While that’s nice, none of that helps solve the problem: how to hire in this new market. And once you’ve hired workers, the situation gets more complicated if they’re not the right fit. To say the landscape is uncharted territory right now would be putting it mildly; it’s a new world out there.
We didn’t want to leave you hanging, so we put pen to paper and collected some insights on what the market looks like and how you can get the edge.
What’s the job market really like, really?
The story is complicated. It’s not like one big jobs bill passed and everything suddenly became hunky-dory. Instead, today’s labor situation is composed of a lot of pieces that comprise a more complex economic puzzle; between the auto bailout, the resurgence of the industry, the tech explosion, a few manufacturing bumps and other factors thrown in, we’ve arrived here.
Unlike 2008—when things were not pretty—unemployment rates are super low right now: less than four percent. That’s the lowest since the Kennedy era. There are more jobs than people right now, and the market is reflecting that. Because we’ve got so many jobs with so few workers, companies have to get creative and evolve with the times. Things that may have worked in the past aren’t guaranteed to work today.
Millennials move from jobs; that’s been written about and obsessed over and has left companies wringing their hands. Good talent is all around, but it’s not stable in this market. People will leave jobs for a variety of reasons, and the strong market doesn’t make it any harder to do so. More and more educated, tech-minded workers are entering the workforce daily. And those who gave up looking for work back during the lean times are mostly back and collecting a paycheck.
When it comes to making sense of what hiring looks like in 2020 and beyond, we put pen to paper and thought: what’s next? Turns out, there are a few things you can do if you’re an HR manager or just trying to maintain your staff.
The easiest way to keep anyone is to pay them well. There’s no greater motivator for some workers to stick around than money. While some chase rank and want a title, others just want to get paid. Retaining the best is easy if there’s a transparent process that gets people paid. It’s really that easy.
Make the net bigger
If you’re looking for workers, widen your search criteria. Just because someone lacks a master’s degree doesn’t mean they lack relevant experience. If you’re really centered on what tangible skills a worker has or doesn’t have, a skills test is a good way to check where they’re at instead of making a choice based on schooling.
Non-essential skills as “nice to have” rather than a “must-have” could be a game-changer. Look at your diversity initiatives (like hiring women in historically male-dominated roles). How you redefine the space could change everything in terms of how hiring and keeping people looks. If the job doesn’t require someone to physically be on site, why not consider making the position remote? Or if the perfect worker is available—except just not in the right part of the country—perhaps it’s worth relocating them.
Invest in high school training programs
A lot of industries, like the hospitality and service industries, are starting programs specifically for kids in high school to get them into these fields early. Some of the big hotel chains are even offering to pay college tuition if these kids can stick with hotel management. The idea is to show them what the industry can offer and give them a steady job with a clear-cut career path, rather than forcing them to figure it out ad hoc like the rest of us.
Invest in training
Hiring from within is always a smart move. These people are already in-house, so they know the systems, the culture, the organization, and the people that drive it all. Training a current employee to move into a better role only makes the employee more valuable to the company, and it empowers the employee to see the investment in their work. It’s easier to hire someone for an entry-level job than it is to find the right fit with additional experience. If a role goes unfilled for too long, you can always retool and rethink what roles and responsibilities look like for the role.
Sell blue collar work
The trades are coming back, but there’s still a long way to go. A lot of people are realizing that college isn’t for them. Some people just aren’t designed to sit in front of a computer all day, and that’s a good thing. The trades need to do a better job of selling their benefits—good pay while working with your hands—early, rather than hoping to get people already jaded after a year or two of college. For the trades, there’s a very specific window to get the best workers trained by their early 20’s.
On-demand staffing is definitely worth it
One of the secret weapons more and more businesses are utilizing is the world of on-demand staffing. Thanks to this job market, along with the opportunity to make money on their terms, people are calling their own shots. Workers are pursuing their passion projects, they’re making side money, and they’re doing so at their own rate — through the gig economy.
No matter how good things are going, there are still bills to pay. And this is how industries like hospitality, the service industry, and general labor are filling holes when it comes to getting stuff done on a short timetable. Take advantage of the side hustle — everyone else is.
We’ve established the hiring game has evolved… but what about bad hires?
How an organization attracts, recruits, and retains talent can make or break its long-term success. But what happens when the company makes a bad hire? That’s expensive. Even the most experienced HR person will admit they’ve screwed up and hired the wrong person. CareerBuilder has even cited that almost 75% of HR pros admit to it.
What does that person do when the market is as tight as this one?
First, take a breather. It happens, and it’s more common than you think. No one is perfect.
The thing about a lousy hire, though, is that fixing the mistake is expensive. According to the US Department of Labor, a bad hire replacement can suck up to 30% of that person’s annual salary. And even the time–to–hire rate has increased, which drives up core cost-per-hire cost; according to Kronos, 38% of organizations have roles open longer than in years past. Over 73% of organizations have also revealed they’ve increased salary offerings to attract applicants.
What constitutes a bad hire?
In general, while it may not always be immediately obvious, there are a few key indicators that you’ve made a bad hire. One is the lack of cultural fit; the new hire cannot get along with current employees. Skill misrepresentation is another problematic indicator of a bad hire. Most employers have caught applicants lying on their resumes, and a new hire’s lack of key skills and experiences (as well as the inability to keep up in a new environment) can prevent an organization from meeting its goals. Some employees may not show up for work consistently, if they even show up at all.
What can you do? The market is tight. Is there a chance to turn the ship around? Well, yes, maybe. While some things can be corrected, others, unfortunately, can’t. Let’s be honest, you never hire someone thinking, “well, we might be firing you soon.”
There are a lot of questions to ask when thinking about how a hire went wrong, including:
- Did we onboard correctly?
- What did we communicate during the hiring process?
- Where we clear on what we were looking for?
What can you do to reform a bad hire?
If it comes down to cultural fit, that’s typically a conversation or two. Instead of rushing to axe someone, usually, bad behaviors can be corrected, especially if the worker is adept on other fronts. If you’re discussing things like attitude, cell usage, and appearance, these things aren’t end-all-be-all. They’re correctable.
If the new hire is struggling with performance issues, that’s different, but also usually correctable. One thing to think about is your expectations – were you hiring based on potential performance or actual performance? Both matter in context. A lot of times, a person is hired for a role, but they were expecting something completely different, and they need the job, so they’re trying to keep up. Take the time to get to know an employee, to understand their strengths and weaknesses. Don’t be brash to get them out the door unless the fit is an absolute disaster. Most people can be trained if you’re willing to put in the work to do so. If not, that’s okay, too. It happens.
Let’s go over this again because it bears repeating if you’re hiring in 2020:
- Double down on the best fit possible. Get that job description as tight as possible. Be honest about pay, hours, growth, and what’s expected. It will help with making your company more attractive.
- Get on social media, and get your brand out there. If someone is applying, make it easy for them to see and understand what the brand is about. Use sites like Indeed and Monster to get someone’s eyes on your job. People love videos. Between Instagram, Facebook, and YouTube, videos are everywhere. They’re relatively cheap to make, so why not make some yourself? Plus, that’s a simple step up from just another help wanted ad.
- And while you’re looking for that longer-term hire, don’t forget about on-demand staffing to help you get things done right now. There are a lot of people looking to make extra cash, so why not let them help? Never know, maybe one of them could be your next great hire.
If you liked this blog, check out the rest. There’s plenty of great information in the Adia archives. We’ve talked about the gig economy, the future of work, warehouses, big events, restaurants, hotels, and just about everything else.