Attracting and Retaining Employees During a Labor Shortage

It is hard to imagine that it is already September, but yet here we are. In a blink of an eye, 2021 is heading towards the final months. To say this year has gone by quickly is an understatement. Our nation has continued to battle the coronavirus. The housing market is red hot, as is the overall stock market. After two decades, the United States has pulled out of Afghanistan, and with the holiday season right around the corner, many of us are left wondering what's next.

It's unnerving because this year has started great relative to everything happening for many people out there. Counties were opening back up, restaurants were beginning to retake dine-in seating, and it seemed like specific concerts and events were returning. Schools were bringing students back in, and the economy was being pushed to greater heights. Yet, as we progressed past summer and with Delta variant on the rise, many have hit the brakes on normalcy. 

Now, one of my larger categories of clients that I work with is business owners. In light of my many conversations with various business owners, I have heard one singular complaint that keeps them from returning to normalcy: their inability to find a talented workforce.

Whether the industry is manufacturing, construction, or healthcare, the single most critical hardship business owners face right now is finding employees. Now, who knows? Perhaps this may all change with the elimination of enhanced unemployment benefits. As many of you know, the enhanced unemployment benefits that rolled out last year in response to the coronavirus meant many individuals were receiving upwards of $3,000 a month on unemployment, so there was no immediate pressure to return for a lot of people back to work.

Finding employees has gotten so bad that many employers are now offering cash sign-up bonuses for employees. Amazon, for instance, has been offering an immediate bonus of $1,000 for new employees and this past week just announced they would be providing tuition reimbursement for all employees. 

According to the June 2021 Labor Bureau statistics report, an estimated 10.1 million jobs were posted for availability, while only 8.7 million unemployed were actively looking for jobs. The shortage in labor has caused many companies to become more creative in recruiting talent.

This Great American Labor Shortage means that employee benefits are more critical now than ever before. Let's be brutally honest, the days of putting out a For Hire sign and having your pick of the litter are gone! If you're a business owner and want to fill those vacant positions with talented employees, it's time to up your game! More essential now than ever before are employee benefits, whether health, retirement, or flex-time. 

What exactly is it that the modern workforce expects in today's age? Well, I'm glad you asked because we'll be going through the items of most critical importance for today's workforce. 

When it comes to finding talent in Millennials and Gen Z, the modern workforce is not just about compensation. While monetary compensation is still essential, it is now a focus on the blend of personal care. For instance, the list is of reasons why Millennials and Gen Z are switching jobs or pursuing other opportunities come down to just these five reasons:

Reason #1: Flexibility

In a survey, respondents stated that the number one reason they want to switch jobs or have switched jobs is that they wanted more flexibility. If the pandemic has shown us one thing, it is that we value our time and work-life balance more now than ever before. We want to be able to work from home and have the ability to remote into meetings because our relationship with our family is just as meaningful as our work. Now, that doesn't mean that we want to slack off at home, but instead, we want to be able to work on our terms, whether that means working late into the night to compensate for afternoon time with the kiddos.

Historically, the hottest and best well-paying jobs were in your high cost of living cities. These are the cities that are thriving with innovation and talent. Think San Francisco, LA, Seattle, New York, Chicago, Austin, Denver, and Phoenix in recent years. The problem with these cities is high population density which means longer commute times and astronomically high cost of real estate. Unless you were making mid to high six figures, buying a home in those areas was impossible. 

The new era of remote work has allowed individuals to do the job they enjoy but yet afford to buy a home in the suburbs or lower-cost cities without the concern of a long commute.

Reason #2: Pursuing more purposeful, meaning work

Having purposeful meaning work was ranked as the second reason why people have switched career paths. Today's workforce wants to know that they are making a positive impact on the world. For many of us, we understand and believe in modern science. That also means we don't take the subject of catastrophes lightly, whether they are medical, social, economic, or climate. We want to leave the world a better place than the way we are in, and that means we want to find work that provides a better outcome for the greater good.

Millennials and Gen Z want to work for companies that are actively striving to reduce their carbon footprint. They consistently rank brands that care about equality higher than brands that shy away from that subject. They want to embrace support companies that are making a positive impact in the way we lead our lives, and it is no longer just about supporting them through our wallets but also our working hours.

Reason #3: They want more benefits and support for personal care

It's now 2021, and the stigma of hiding mental care is no longer a viable option. We don't want to pretend that everything is OK and not talk about it. We want to share with a trusted professional the fears and pressures that we face in our lives. And ideally, what we would like from our employer is promoting that we should actively seek help instead of ignoring our mental struggles. Better yet, providing a stipend for cognitive performance coaching is considered invaluable. 

Reason #4: They want to work for a company that better fits their values.

We want to work for a company that fits our values. Deep down, we have certain beliefs that we would like to uphold, and we would rather not sacrifice them for a paycheck.

Millennials and Gen Z enjoy working for companies with a strong foundation in company culture. They are responsive to the needs of the employees instead of trying to fit their employees into a mold. 

Reason #5: They want higher monetary compensation.

Salary or monetary compensation is still at the forefront and wanting monetary benefits, whether higher salaries or financial incentives, is still a central sticking point. Today's modern companies, especially tech companies, increase salaries and provide very lucrative stock option plans. 

Stock options are quickly becoming the most prized financial incentive for Millennials and Gen Z. When surveyed; most Millennials would work for a company with a lower salary if it meant they were compensated with stock instead. 

It's no coincidence that this is also coinciding with a historically high number of companies going public over the past decade compared to before. Stock options have become one of the fastest ways for modern employee to reach their financial goals, and working for companies that offer stock options and employee stock has become the biggest draw. 

Now, I'm not saying you ought to go out and make significant sweeping changes to your organization. Change cannot be dramatic nor overnight, and I say that because overnight change is never long-lasting. Still, at the very least, I implore you to look at those five reasons and see which ones are possible for you to incorporate into your company. 

I understand that higher compensation isn't necessarily feasible for various reasons, but offering certain fringe benefits could be very helpful. I mean, just because you're providing benefits doesn't necessarily mean that your employees will take them. Even if they are, it is considered a tax deduction as an eligible business expense.

When it comes to retirement benefits, offering a 401(k) plan and an employer matching contribution is pretty standard these days. In fact, in my experience, companies are increasingly going higher on the contribution percentage to distinguish their compensation package from competitors better. Many companies are also preparing to provide additional profit-sharing contributions for this year to promote longevity with existing employees. 

Profit-sharing, for those unfamiliar, is a way for a company to make an additional deposit directly into their company retirement account for the benefit of all eligible active employees. This deposit is in addition to a pre-stated company match. It is entirely voluntary by the employer, but that deposit can be deducted from your corporate taxes and vested for your employees over the years, making it a very popular option for employers to incentivize their workforce.

I'm curious to know what you've been doing to attract new talent for my business owner listeners out there. Have you embraced some of these above options, or are you trying out new ideas? Drop me a line and let me know what's been working for you. And if you're not a business owner but an employee, please let me know if you've switched jobs or are considering switching jobs for one of the reasons above. I'd love to hear from my listeners what type of moves they are making in light of this new workforce era. 

And that's it for today, my friends. I wish you and your family well during these uncertain times. Thank you for tuning in.