Companies who hire low-skill workers at the bottom of the wage scale are scrambling to find dependable workers and to figure out ways to differentiate themselves from competitors in the labor market so that they can retain the better ones.
Image by Capri23auto from Pixabay
We’ve seen rates drop from over 11% to rates in the 4-4.5% range since 2010. I’m old enough to have experienced these drops several times during my career. Each time, as the economy heated up during an economic recovery and unemployment rates dropped accordingly, the quality of candidates dropped noticeably as well. Individuals with recurring drug problems, criminal background issues and an obvious poor work ethic really stand out when the unemployment rates get low. It seems like there are more of them during boon times, but they’ve really always been there. Their numbers were simply diluted when there were more good workers in active job search.
On the positive side for employers, there is still a lot of movement among lower wage workers as they shuffle to find that employer they plan to call home for a while. As an outplacement consultant told me one time, Sometimes you have to take “a” job before you find “the” job. That’s where many of them are. They’re employed, but they’re open to a better opportunity. Here are some tips to become that employer of choice:
1. Have an employee referral program in place.
This program shouldn’t have a big expense associated with it. You just need a way to say thank you to your employees who are willing to tell people in their circles about opportunities at your place. Paid-time-off is one of the most popular incentives. Sometimes owners outsmart themselves by insisting on a cash incentive, like $250 to 500, when a much less expensive non-cash benefit, like a full or half-day off with pay, would be preferred by an employee.
2. Consider weaning off of temps.
Temps are a great way to ramp up operations and a good, reputable temp agency is a wonderful partner for any business that experiences peaks and valleys of demand. However, as long as a worker is an employee of an agency and not of your organization, they are likely to feel and act like an outsider. Take some time to calculate what your core workforce needs to be for the foreseeable future and set a goal to staff to that level with employees of your organization. When you identify good workers among your agency workers, bring them on-board when your contract will allow it, and make a big deal about it.
3. Look at your total comp.
Determine if your starting wages for entry level workers is competitive. And remember, you’re not just competing against people in your industry. You’re competing against every industry that hires workers with similar skills to what you’re looking for. Then look at your benefits package as compared to what others are offering. Commercial health insurance agencies are a tremendous source of information regarding benchmarks. Consider conducting an employee survey to see if the benefits you are offering match what your employees (and the employees you are trying to recruit) actually want. It may make sense to drop one benefit and replace it with another that they value more. Look at your paid-time-off policies. This is a highly valued benefit that many smaller companies overlook. And finally, find ways to reinforce what their total compensation really is – whether it’s total compensation statements or putting up graphs at an annual employee meeting – remind them of all the things you provide in addition to their net wages.
4. Have an on-boarding plan.
Employees experience buyer’s remorse just like consumers do. The best way to fight buyer’s remorse with new hires is to have a detailed plan for new that includes the first day, week, month, quarter or longer, depending on the position and responsibilities. Sometimes managers are so relieved to have a spot filled and the box checked, they forget to do the little things to ensure that the person gets fully socialized and engaged in the company and in their job. Seeing that the person is fully grasping their job and being (and feeling successful) and that they are making friends at the workplace is critical. If you want that new hire to still be around a year from now, don’t let this part slip.
While some companies in some industries can be successful using what is essentially day labor – a revolving door of temps and new hires – most will improve their bottom line by building a stable workforce of engaged workers who are, and feel, like they are part of something.
