Vigilant Blog

News, trends and analysis in employment law, HR, safety & workers' comp

Dec 16, 2021

Vigilant Member Hiring & Retention Survey

Vigilant NewsHiring 

We don’t have to tell you that hiring and retaining employees is tough right now. Many of you are asking us what other Vigilant members are doing to find and keep workers—and what works. To help you compare notes and generate ideas for 2022, we posed questions about hiring, retention, and results to a sample of Vigilant members in four states. Below is a summary of their responses. 

FIRST, SOME VALIDATION. 
When we asked the open-ended question, “What are the biggest issues keeping you up at night?”, the vast majority (72%) said hiring, recruiting, and retaining employees. This was followed by COVID-19 regulations and supply chain issues. Survey respondents also noted some consequences of not being able to hire and retain employees: employee burn-out (leading to more absences), increased near-miss accidents and injuries, and reduced morale. The financial consequences are also significant. More than half of those surveyed are paying more in overtime, resulting in lower margins. Operating profits are further eroded by paying recruitment fees and bonuses. Running short-staffed also means missed deadlines and unsatisfied customers. A full 25% of respondents admitted to turning down business solely because of labor shortages. 

WHY IS IT SO DIFFICULT TO HIRE RIGHT NOW? 
57% of the companies surveyed pointed to current applicant concerns about drug testing, vaccine requirements, and fear of COVID-19. However, looking at the longer trends, half believe that entry-level labor applicants don’t want to work in a production environment and another almost 50% said they are simply not finding candidates. This also applies to skilled labor where electricians and millwrights are in especially high demand. Respondents suspect several reasons for the lack of applicants for both entry-level and skilled labor, including: 

  • Shrinking labor pool; 
  • Demotivated workforce; 
  • Increased competition, especially from very large employers; 
  • Further commutes, coupled with higher price of fuel; and 
  • Reluctance to work undesirable shifts. 

WHAT ARE COMPANIES DOING ABOUT IT?
Survey participants have employed several tactics in the last year—some old and some new—to attract and retain employees, including billboard advertising, referral bonuses, wage increases, attendance bonuses, flexible schedules, lowering job standards, and benefit enhancements. Four rose to the top as the most effective: 

  • Increased pay and/or benefits for both new and existing employees, in some cases close to $3/hour across all positions, with even higher wages for less desirable shifts. Several companies are more frequently evaluating workers for pay increases, sometimes as often as every 90 days. Some are offering a defined shift bonus for working overtime or weekends, as well as quarterly bonuses for good attendance. Regarding benefits, companies have increased paid time off (PTO), added paid holidays, offered tuition reimbursement programs, and made benefits effective on the first day of work. In cases where the actual benefit package did not change, companies are picking up more of the tab, in some cases up to 100%. For skilled labor, survey respondents are broadening their geographic search area (to increase the number of viable candidates) and offering generous relocation packages. 
  • Recruiting and advertising in new places. Respondents are seeking help from sources such as WorkSource, Indeed, job coaches, head-hunters, and temporary staffing agencies (although many agencies are also having trouble delivering workers). They are broadening advertising efforts in English and Spanish to include yard signs, curb-side signs, posters, and social media. They are participating in job fairs, as well as networking with trade schools, high schools, and local prisons to identify viable candidates. For skilled labor specifically, participating member companies are working with the military to recruit and hire veterans. 
  • Referral and hiring bonuses for the new hire and the referring employee—most often paid as a portion at hire and then at defined lengths of continued employment. Bonuses range from $100 to $1,000. (Caution: Depending on your criteria for the bonus, you may need to include it in the regular rate, such as when calculating overtime. See our Legal Guide, “Referral and Hiring Bonuses” (2086), and contact your Vigilant Law Group employment attorney with any questions.)
  • Train from within and automate. For skilled labor, several survey respondents have given up trying to recruit and are dedicating resources to identify and train potential internal candidates. For entry-level positions, companies are researching and investing in automation, minimizing the need for people to get the work done. 

Strategies to Attract Workers

        


RETENTION BY SHOWING VALUE AND BEING FLEXIBLE
Once hired, survey respondents are working hard to ensure employees feel valued and appreciated. Many have increased internal two-way communication efforts to help employees feel connected to the company and that their voices are heard. Others are offering more training programs and providing clear paths to future opportunities within the company. In fact, those companies emphasizing morale-boosting activities reported higher retention levels, less turnover, and a lower sense of panic about attracting and keeping their workforce stable. Companies excelling in this area implemented programs and activities suggested by workers. These programs and activities vary depending upon the company and include small actions such as distributing company swag and giving away food to more significant programs, such as COVID-19 vaccine clinics, bonuses, and increased schedule flexibility, such as four 10-hour days, split shifts, and part-time work. 

Strategies to Retain Existing Workers 


CONCLUSION
We hope that the ideas shared by fellow Vigilant members and conveyed in this summary help you better navigate the challenging labor market. Unfortunately, most experts do not expect this to be a problem that goes away anytime soon. We will continue to keep our ears open and share what we learn. Thank you to the members who took time to participate in this survey. Thank you all for your Vigilant membership.

Sincerely,

Linda O’Neill, VP of Strategic Services                                                 

Jodi Slavik, Employment Attorney & Strategic Services Director 

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.

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