March 14, 2018
According to the Bureau of Labor Statistics, the current ratio of unemployed persons to job openings is 1:1. The ratio may very likely be less than one unemployed person for each available job opening if they also have to pass a drug test! For comparison, at the height of the most recent recession in 2008, there were 6.6 unemployed persons for every job opening. When you combine a tight labor market with the growth in certain industries over the past few years and in the foreseeable future, it becomes more challenging to find great people willing to take on more projects. Additionally, there are other factors impacting an already tight labor market, such as wage inflation and highly skilled, long tenured workers reaching retirement age.
What follows are some tips and guidelines on what’s helping the most successful companies to grab the best talent. Of course not all of these strategies may work for your business and some options will have more of an impact on your profit margin than others. On the other hand, certain sacrifices today could lead to better profit margin in the future.
Aggressively advertise and market for new employees and utilize a variety of online and traditional media sources.
While this strategy may seem very basic, there are still companies that think they don’t need to advertise or frankly don’t know where best to advertise. Relying solely on online sources like Facebook, LinkedIn, and ZipRecruiter can result in quality offline candidates being overlooked. There are all kinds of places to reach workers and job seekers and the secret here is finding them and then advertising to top talent that might not be looking for jobs. For example, they could be a top performer at a competitor or in a position of not being treated as a top employee. This presents an opportunity to bring someone in that likely will fit in with your existing team and won’t take long to become a top performer at your company. But if you’re not actively targeting these types of workers, sometimes with those annoyingly aggressive ads online, they won’t even know your company exists. So start getting aggressive with your advertising and get it out to the maximum number of platforms to reach as many people as possible.
Understand where your top performers came from and utilize them as a resource.
It’s no secret that top performers surround themselves with similar and likeminded individuals. You may have to consider offering a referral bonus, but that is a small price to pay for a long term top performer. Understanding some of your key performers and how they found their way to your industry will help build a pipeline of potential quality candidates. Question your current top performers to find out any commonalities amongst them. It helps to know the histories of your top performers and what key characteristics to look for in similar candidates. Once you know the characteristics of what helped your top performers you can apply that formula to your search.
Start hiring for the future and build bench strength.
This may mean looking at your minimum requirements for employment and making a decision to lower those standards to bring in folks that potentially have a bright future. It’s also means you’ll need to look at your training and onboarding processes and beef these up as well. In a tight labor market it is even tougher to find a near perfect employee that possesses all the skills needed to be successful. They don’t exist or likely aren’t looking for a job unless you’re willing to pay top dollar. Additionally, it is likely your best employees didn’t start out that way. You trained them, investing in them and their futures. This is a commitment to a longer term strategy of building your bench for tomorrow. Of course you really have to watch how this impacts your overhead, which is no easy task. But if your margin can tolerate an extra person or two, you’ll be glad to have the bench strength when something unexpected happens, like a work injury for example. Along with this be sure you don’t hire just to hit a number. The individual has to still be a fit with your culture. Does the candidate in question seem to be one that will fit right in with your company culture? And does your company culture believe in training and mentoring unexperienced and unskilled workers? It’s almost always better to hire the candidate that fits, personality-wise, and then provide the necessary skills in training.
Know your competitive advantages as an employer.
When’s the last time you asked “What makes this a great company to work for?” I know you’re thinking that potential job seekers should be trying to sell you on what they can do for your company, but you’re not at that step yet. Figure out what makes you as an employer great and then recruit candidates that are looking for a job that matches what they would want as a job seeker. For example if your projects are close to your office, then employees that have young families would likely be a close fit since they can return home each day to their families. So what makes you a great employer? Is it the type of work you do, the growth opportunity within your company, the geographic region where your business is located, or the type of clients you work with? Any of these factors can give your company an edge. The key is to figure out what’s important to the type of employee you want to attract, and this will increase the number of applications or resumes you receive. Knowing what your advantages are and matching that can help find the right people so when they show up for the interview they can start selling you on why they are the right person for the job.
Watch and pay attention to what your competition is doing.
Don’t overlook what an employee could get paid by a competitor down the street. While it may mean having to increase your minimums from time to time, it will also give you a good barometer of the market. Providing competitive pay and focusing on finding the right fit for your company can be a winning combination. But when that doesn’t line up perfectly, offering other incentives can help. This may mean bonuses (including sign on), paid vacation or more vacation time, better retirement benefits, or some combination of all these things. Again, be sure to watch your overhead these strategies. Any changes you make to compensation might impact existing jobs that were bid with different overhead numbers and of course it could impact the bidding of future projects.
Hiring the right people is the key to your long term success. For those of you that have enjoyed a rebound your particular market and are looking to capitalize on the continued growth, it can be challenging to find the right people. You can always look to find ways to increase productivity and just accept your current workforce. While some industries continue to rebound and grow, for those of us that have been in the industry long enough we know the market will eventually turn and start to contract. It may be hard to have to turn down profitable work, but being in a position to selectively take on only the best jobs can be a winning strategy as well and allow you to be aggressive and hire for the future. Just keep track of your turnover rate for job positions and look at your existing labor force to determine when retirements could start to impact your business. Hopefully you can apply one or more of the above action items in your strategic planning to help maintain and grow your company now and well into the future.
You can find the original version of this piece written by Justin Leisure, AFSB, RPLU, Surety Bond Executive, McConkey Insurance & Benefits by clicking here.