Today’s post comes to us courtesy of board member John Frehse, Senior Managing Partner, Ankura Consulting Group, LLC.
July 1 marked the halfway point for 2018 and represents a good time to reflect on what lies ahead. National unemployment is extremely low at 3.9%, and employers from healthcare to logistics to manufacturing are all complaining about the same thing: The inability to hire and retain qualified employees. This has been an issue for decades, but the current state could, and should be labeled a crisis. Companies are not meeting demand and losing customers. There are three reasons why this will only get worse in 2019:
- The Booming Economy: This comes and goes in cycles and no single piece of legislation or President can really drive this cycle alone, but tax changes and relaxing of regulations are at least partially responsible for putting the economy into overdrive.
- The Changing Needs of American Industry: Every industry in the United States has evolved rapidly over the last decade. Service, products, and technology are all better. This evolution, largely driven by analytics and the ability to see inefficiencies and improve upon them, along with a wide range of technology breakthroughs (think Uber, robots, and other automation innovations), has created a demand for higher-skilled employees.
- The Changing Appetite of the American Workforce: The workforce is changing, and this is not just a discussion about Millennials. From the youngest to the oldest generation, changing attitudes about how long to work and how long to stay at a job have destabilized labor supply.
So, what are we going to do about it?
To answer this question, we need to understand what today’s employees want from their employers. Uber and others have created a more on demand environment where you work when and where you want and report to no one. When compared to traditional employment opportunities, this is very attractive. Here are the top 5 things our clients talk about their employees wanting the most. Notice that pay is not on the list. Although important, it is not primary.
- The ability to make a difference every day
- Recognition when earned
- Time off – specifically a significant number of weekends off
- A shift schedule that maximizes the number of days off each week
- Shift schedule predictability
The labor supply is not growing, and based on birth rates, it may be shrinking in the next two decades substantially. Employers need to be proactive to compete for the talent they need to keep their businesses running. The right labor strategies can help any company standout. Instead of approaching labor strategy by copying what everyone else is doing, some differentiation will make a difference. If everyone is working 8-hour shifts, maybe offering 10 or 12-hour shifts, with the right work and pay polices, will drive interest and applications. Think about what your employees want most – beyond just a paycheck – and then find creative ways to meet and maybe even exceed their expectations. If you’re able to do this, you’ll be in a strong position to survive and maybe even thrive in this increasingly tough hiring climate.