Three Potential Business Pitfalls for Next QuarterAdmin
Elevated Quit Rate
According to the latest release from The Bureau of Labor Statistics (BLS), 3.1 million people quit their jobs in June of 2017. In the staffing world and across other industries, a high quit rate is interpreted as sign of employee confidence in the job market. Employees will rarely voluntarily leave a position unless they are very confident in their ability to secure another job. Retention has been a major concern for employers, and a hot topic at many conferences and national meetings in the staffing industry this year. As more job options become available, employees are less likely to remain in positions that do not align with their needs and expectations. The upside to this issue is that employers do have the ability to minimize turnover within their organization. Although it takes some initial evaluation of processes and planning to improve them, the long term benefits are worth the investment. There are practical adjustments employers can make in terms of company culture, employee engagement, and benefits and compensation to help minimize employee churn. According to a Society for Human Resource Management (SHRM) employee satisfaction survey, 65% of those surveyed said that respectful treatment of all employees at all levels was very important to their overall job satisfaction. Compensation and pay and the relationship between employees and senior management were also equally highly valued. These are factors that employers can acknowledge and commit to improve.
More Challenges Finding New Talent
A key way in which the tight labor market is affecting businesses in 2017 is that it is increasingly difficult to find qualified applicants who are willing to make a job change. With unemployment now around 4.3% and job openings increasing to 6.2 million, the market is experiencing a shortage of workers. The shrinking pool of job seekers translates into fewer available job applicants — leading to a growing dependence on recruiting from passive, already employed candidates. While certain industries are feeling the pain more than others, attracting the kind of talent that will help to grow a business is proving difficult for most employers. Just finding the right candidates is proving more difficult through the usual channels. Applicants are opting for more targeted job searches as opposed to posting their resumes on job boards. Prime candidates are pursued so fervently by recruiters that they often remove their resumes when they are employed. The job boards themselves are changing too, making the standard search methods less fruitful. Analytics and Big Data are contributing to search results that are not relevant to most Boolean searches carried out on job boards. Even entry-level candidates are experiencing one of the best job markets in years. 21% of 2016 college graduates had accepted a job prior to graduation. Now that unemployment is at a 10 year low, and job openings are at a very high level, we anticipate that this percentage will be even higher when 2017 findings are revealed. An article published by SHRM calculates that the average time-to-hire for white-collar positions is 68 business days. Many employers have not yet modified their hiring practices to account for the high demand for a-level talent. We advise our clients not to wait to make an offer when they find that great hire, or they will run the risk of losing them to another employer. Adapting new hiring practices for this rapidly changing workforce is something every business will have to do in the 4th quarter and beyond to ensure they are able to acquire top talent.
Availability of Contract and Seasonal Employees
Many companies reply on temporary employees to complete essential business tasks. According to a recent survey by The American Staffing Association (ASA), 62% of hiring managers surveyed said they are using freelancers or temporary and contract workers to meet project needs, have access to skills not currently available, and to help them complete more tasks, more efficiently. More than three million temporary and contract employees work for America’s staffing companies during an average week. The flexibility of temporary, contract and freelance positions is a very desirable feature for candidates that is often associated with temporary and contract positions. The challenge is finding qualified employees willing to take on temporary work when desirable full-time positions are quite accessible to them. This is especially true in the technology industry where contract positons are more common as projects are often initiated and completed within a designated time-frame. Another factor adding to the scarcity of these contract employees is the current rise in the gig economy. The actual number of true gig workers is difficult to measure, since it could be encompassed under a number of different headings in Bureau of Labor Statistics (BLS) reports. Intuit, the creators of TurboTax estimate that the gig economy comprises as much as 34% of the workforce, and project that it could grow to 43% by 2020. While gig work is more common in certain specific industries, it is accessible to many more people through online services like Lyft, Airbnb and TaskRabbit. Those interested in this kind of work can take their skills, experience or other assets and offer them to the community on their own terms. The ability to work when, where and as much as they desire is a benefit to this kind of employment that is appealing to a wide range of individuals, and could further affect the ability of employers to engage temporary and contract employees.
These issues that have come about due to the rapidly changing job market can easily be seen as obstacles, but you can also view them as opportunities. In order to avoid churn, maintain a talent pipeline, and earn a reputation as an employer of choice, organizational leaders will need to review and revise some operating procedures. In a previous Bradley blog, we addressed the topic of wage increases as another necessary measure that employers will need to take to keep their top performers and attract more of them in a very competitive market. Having an understanding of what these potential pitfalls are and the driving factors behind them will make you more equipped to exact change in your organization in the areas where it is most needed.
Bradley Staffing Group is a full-service staffing firm based in Wayne, PA. We are committed to matching A-level talent with best-in-class businesses. Our knowledgeable and well-trained staff brings a combined 70+ years of staffing experience to our clients and candidates alike. http://bradleystaffinggroup.com/employers/