From consumers who face extra-long wait times at the DMV to manufacturers pushing overtime hours instead of hiring new workers, from short-staffed restaurants to the U.S. Postal Service, recent labor shortages have impacted just about everyone. The U.S. Bureau of Labor Statistics reports that at year-end 2021, workforce participation was down by 1.5%, or nearly 4 million workers, compared to February 2020.
Some economists note that current employment challenges may be the standard even after the pandemic diminishes further. That means employers need long-range plans to steer their organizations through any labor climate, including the “Great Resignation” and beyond.
Keeping your customers satisfied and your business achieving its goals in a tough labor market reaches well beyond the human resources department. These approaches can help overcome the labor shortage:
1. Consider raising your pay scale. Clearly, money talks. Assess your budget to consider if you might be able to increase pay and benefits. A worker who makes a bit more an hour than the competition pays could be less interested in giving up a well-known routine and colleagues. To support higher wages, some businesses may have to raise prices. For example, year-over-year increases of 2% to 7% are common in today’s restaurant markets, Restaurant Business reports, and the Consumer Price Index rose 7% for all items in 2021 .
2. Understand new attitudes about work. Whether it’s generational or situational, many people in today’s labor force are flexing new muscles. That’s why it’s vital to deliver an attractive workplace in terms of physical location and even the intangibles of a happy work environment. Depending on your staff, that may mean a well-equipped break room and a flexible spending account (FSA) plan to pay for child care with pre-tax earnings. Or it might include days off for birthdays and serving the community, a demonstrated commitment to equity and diversity, or other appealing lifestyle benefits.
3. Embrace flexibility. The industries hardest hit by the labor shortage employ blue-collar and customer-service workers. But other businesses have also lost employees to the “Great Resignation,” with workers quitting at record rates, according to The Wall Street Journal. One way to hang onto valued employees: Listen to what they want. If this is something your organization can accommodate, consider whether your staff would benefit from a hybrid or remote workplace — but remember that many workers may long to work on-site. Whether teams value in-person meetings, investments in technology, quarterly bonuses or bring-your-dog-to-work days, meeting them where they are can boost retention.
4. Recruit before you have a need. Recruitment is about relationships — and finding the right person at the right time. Recruiting teams do well to consider proactively reaching out to great candidates 365 days a year, known as passive recruiting. Someone who isn’t actively looking for a job may be more willing to talk candidly about what they want and need. Then, when a perfect fit appears, you’ll be poised to make an offer and get them on board.
5. Build efficiencies through financial technology. Your banker can assess your treasury management strategies and recommend new ways to increase efficiencies and strengthen your cash flow position. Automating deposits, utilizing sweep accounts and streamlining payroll and accounts payable processes can provide breathing room. If you haven’t updated your bookkeeping methods in a few years (or decades), you may even find that new solutions could free up FTEs for other needs as one tool to mitigate the labor shortage. Your banker may also have insights from their expertise in your industry — from ideas about equipment leasing to automation.