The most recent jobs report showing low unemployment with solid wage growth was a powerful wake-up call to employers. They need to be creative and make recruitment and retention a top priority for their businesses, or else they may not have enough workers to keep their businesses running.
This economy is strong. Unemployment is at 3.7 percent and wages are rising at the fastest rate in almost ten years.
For the first time since the Great Recession, working class Americans are big beneficiaries of the economy. When interest rates were zero, investors did well in a rising stock market, but for a long decade, wage growth was flat. Now, workers have the upper hand. If their bosses don’t take good care of them and pay them what they deserve, they’ll quit and easily find another job.
Earlier this year, a survey of our clients showed that more than three-quarters of businesses said it was “difficult” to recruit and fill positions. Thirty-one percent said they suffered from a shortage of available applicants.
When it comes to recruitment, potential workers often complain about a “black hole of online portals” in which they’re treated like and electron instead of a person. Americans may be more connected electronically than ever before, but when it comes to the job hunt, workers want and need direct communication with a human being.
Smart employers who want a large pool of potential employees to pick from need to move beyond the electronic touch and return to a personal one. Online job boards alone aren’t enough. Businesses should call job applicants back.
Janis Petrini, who runs an Express franchise in Grand Rapids, Michigan, told me, “Employers need to give people options on how to apply. They should be willing to speak with someone on the phone, in-person or over the internet. They can’t rely on technology to filter people in or out or else they might miss out on valuable talent."
Businesses, which are often run by successful middle- and upper-income achievers, need also to realize that for many potential workers, life can be a struggle. There are millions of people who haven’t found work for reasons that include transportation problems, child care issues, drug use or drug testing concerns, or simple communication difficulties. In a tight job market, the employers who excel will be the ones who are creative and more accommodating to attract and keep workers whose daily lives are a struggle.
For example, employers who can help with childcare or transportation options, will have more job applicants and a more reliable workforce. Some people need more help, and an economy with 3.7 percent unemployment means businesses can’t afford to play by old personnel rules. One business owner told me that being tardy three times used to be a fire-able offense. Now, he’s more flexible, because he has no choice.
As for retaining employees, money matters, but nothing matters more than a workplace that is enjoyable and fulfilling. Workers tell me all the time how much they value a good boss, one who says “thank you” for a task well done.
The culture of a workplace is a key part of retention. Nothing matters more than treating everyone with respect and appreciation. That starts with the leaders at the top and it flows throughout the business from there.
Benefits matter. Smart businesses have enlarged the list of things they do for their employees, beyond bonuses and healthcare. Child care reimbursements, financial help with adoptions, tuition assistance, and flexible hours are benefits many companies now offer. The hunt for labor is so intense that a sandwich shop in Indianapolis is offering part-time workers college tuition reimbursement.
And of course, money matters. In West Texas, some truck drivers are earning six figures and 20-something year old newcomers are doubling their earnings in the oilfields after just two weeks at a junior college.
Free markets and smart employers are responding to the tight labor market by paying people more money. For many blue-collar workers especially, this is the moment they’ve been waiting for. It’s long overdue.
Taking good care of workers and job seekers is what every smart employer, no matter how big or how small, must do to be successful, especially in today’s economy.