Companies that are struggling with turnover and unable to attract and hire top candidates are losing profit, and the cost of an open position can add up quickly. (Photo: Shutterstock)
With the Omicron variant sweeping the world and shattering record case numbers, progress towards returning to normal has been halted. Companies are pausing return-to offices yet again, and "business as usual" seems permanently changed – that includes hiring.
The Great Resignation, a phenomenon that describes record numbers of people leaving their job, has coined the last 18 months of the labor market, and is not going to disappear anytime soon. According to the U.S. Bureau of Labor Statistics, a record 4.5 million workers quit or switched their jobs in November, while job openings declined to 10.6 million. And experts estimate that there are two unemployed workers for every three job openings. We are more than likely going to continue to see this trend in the upcoming monthly jobs report and that means good news for those seeking a new job, but for employers it's a great challenge.
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The unemployment rate is down 3.9% meaning that there are significantly fewer people in the workforce than there were before the pandemic. This is going to continue with the surge of Omicron, especially in terms of low-wage and hourly jobs.
For example, as more customers come through the door as COVID-19 restrictions have eased, there are not enough workers to serve due to lack of childcare, school closings, virus fears and employees contracting Omicron. This imbalance is not temporary; a proactive hiring strategy and talent management are essential for companies looking to attract and retain workers as the pandemic wears on.
The workforce has fundamentally changed. In Larry Fink's, CEO of BlackRock, annual letter to CEOs, he states that the pandemic has turbocharged an evolution in the operating environment for virtually every company and no relationship has been changed more by the pandemic than the one between employers and employees. The power now lies in the hands of employees instead of the employer. Over the course of the pandemic, workers have had time to reevaluate their careers and lives. They have come to expect employers to offer more flexibility, better working conditions, and higher pay in exchange for their time and labor. For example, a recent study found that 1 in 4 people who quit their job during the pandemic wanted more flexibility. Omicron has only cemented that the power currently sits with employees who are seeking very specific benefits in today's working environment.
Companies that are struggling with turnover and unable to attract and hire top candidates are losing profit, and the cost of an open position—often overlooked—can add up quickly. Each day a role is open costs the average employer $1,000 per in gross profit as companies cannot accommodate previous customer volumes. However, by modernizing the HR function, companies can better adjust to new expectations from employees.
For example, today's candidates are younger and mobile-first, so texting will convert higher engagement with candidates than cold calls – very few people answer unknown numbers. Additionally, today's candidates will not fill out lengthy applications. Instead, require less paperwork up front and use that first screening call to determine the right fit.
Overall, digitization of the hiring process to accommodate remote hiring and staffing, hybrid work environments, flexible policies in addition to salary increases, and strong benefits will all be foundational for any company seeking top talent. Adapting hiring and retention practices to the evolving labor market offers the best insulation from the current labor shortage headwinds. Adam Robinson is the co-founder and CEO of Hireology, driving his mission to help business owners make better hiring decisions using predictive data and innovative technology. With more than 20 years of experience, Adam is a noted recruiting industry expert and speaker. He is the author of The Best Team Wins: Build Your Business Through Predictive Hiring, host of The Best Team Wins Podcast, and columnist for Inc.
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