13 Dec How to Retain and Recruit Talent in a Tight Labor Market
Have you been having a hard time keeping talented workers employed at your business? Having a hard time recruiting new talent? You are not alone. In fact, we are in a historically tight labor market that is affecting all businesses’ ability to hire and retain talented employees.
This tight labor market has hit many industries, although some have been hit harder than others. Sectors that are experiencing tight labor markets include leisure, food services, hospitality, and retail. Notably, workers employed in these sectors were highly impacted by the COVID-19 pandemic and the government restrictions that followed.
Keep reading to learn how you can combat the tight labor market and keep your best workers on staff (or hire even better new talent).
What’s behind the recent tight labor market?
Large economic transitions are rarely explained by a single phenomenon, and the current tight labor market is no exception. While fears linger about inflation and rising interest rates, this seems to have had little effect on the labor market at this point.
As recently as a year ago, a phenomenon called “the great resignation” took place, which had employees leaving their jobs at record numbers. This was due to a variety of reasons, including lack of engagement, perceived low compensation, and employee dissatisfaction with going back to the workplace after the COVID-19 pandemic.
In addition, the cost of living has increased, leading to workers having a higher expectation for adequate compensation and working conditions. Due to the tight labor market, workers have been able to hold out for more appealing jobs, creating a tight labor market.
While the unemployment rate continues to remain steady at around 3.7%, the tides do appear to be turning. Fears of inflation and the resulting higher interest rates from the Federal Reserve have caused major employers in many sectors to institute hiring freezes. Additionally, the overall economy will likely cool off due to this inflationary and high-interest rate environment.
Inevitably, this combination of factors will likely soften the labor market, creating opportunities for your business to hire in more favorable conditions. While it will likely become easier to hire new employees, just as crucially, you should be in a better position to retain your current employees if you approach the situation correctly.
How to retain employees and hire new talent in the coming years
In some cases, resignations may be unavoidable. There are factors outside the control of business owners and managers that may prompt workers to leave their current jobs and seek other opportunities. However, there’s a lot you can do to reduce the burden of the current economic situation and limit its impact on your operations and profits.
Here are a few of the most effective ways to retain employees – and attract high-quality talent to fill open positions.
Implement hybrid or remote schedules
Flexibility is extremely important to today’s workforce. Recent WEF survey data found that 26% of workers would prefer to work remotely full-time, but only 18% said their employer is likely to allow it.
Of course, not every industry or business can accommodate work-from-home schedules for employees. But if yours can, allowing workers to have more flexibility in terms of their work locations and schedules can go a long way in keeping them.
Prioritize career development
People want more than just a job. They want a meaningful career that offers them the opportunity to contribute and grow their skills. Both existing employers and job seekers want to find fulfillment and opportunities for advancement. Developing meaningful career paths and job ladders and encouraging your employees to grow their skills and reach their goals will not only help reduce turnover but will also attract new high-quality talent.
Cultivate a team-oriented culture
Feeling like you’re part of a team and that you’re all working toward a common goal is a great reason to stay in your current job, regardless of the industry you work in. A strong company culture is one of the best ways to retain your current employees, encourage hard work and engagement, and attract new people who are likely to be loyal in the future.
Boost employee benefits
The importance of financial compensation can’t be overstated. While today’s workers care deeply about career fulfillment, a great culture, and opportunities for advancement, ultimately they still need to pay their bills and put food on the table. With rising inflation and economic stagnation taking hold, people are looking for higher-paying jobs and better benefits.
Take advantage of the “Great Rehire”
While some people have quit their jobs in favor of retirement, staying home with kids, or freelancing or starting their own businesses, most workers are actively searching for new positions. Recent unemployment data shows that over 5.7 million Americans are actively searching for work. This represents a major opportunity for business owners and hiring managers to stand out and attract the best people before they’re snapped up by the competition.
Offer a fair wage and comprehensive benefits, prioritize flexibility and career development, and find ways to engage your employees and involve them in decision-making, and you’ll attract top-quality employees that will not only help you fill gaps in your schedule but help you grow into a better business over time.
At JJH Law, our skilled business attorneys are in your corner
We offer comprehensive legal advice and services to help you achieve your specific goals and succeed in your industry. Whether you need help starting a new business, acquiring an existing one, navigating accusations of wrongful termination, or solving other issues, we have experienced and compassionate attorneys who are here to work with you, provide quality legal guidance and advocate for your interests.
Contact us today to let us know how we can help.