The Battle for Talent has Begun

As we enter the second quarter, workforce demand is hitting all time highs which has made it harder for employers to find necessary talent to continue building back the economy. The recent round of stimulus funds created new challenges in keeping business operations afloat and meeting business demand. We have seen the impact of incentives to allow many qualified candidates to continue staying home. Additionally, lower wage candidates have been faced with the decision to either remain employed or choose unemployment due to increased subsidies replacing workers’ salaries. Although it challenges hiring in the short-term, this is not a doomsday scenario that will lead to businesses shutting down because they can’t find enough employees to meet business needs. This gives employers the unique opportunity to really evaluate hiring practices and proactively change policies and benefits to meet the emerging battle for top talent in the marketplace.

We are seeing applicants being placed about 60% faster as they enter the job market. This causes applicants to be in urgent demand, and employers have responded with steadily increasing pay rates since the beginning of 2021. There are some important factors to adjust to keep attracting top talent to your organization.

1) Focus on retaining current employees:

Employers should be using as much data as they have to reduce turnover by analyzing key factors, such as attendance policies. Employers could consider adding more flexibility with work schedules and allowing work from home options to meet the changing demand in workers off time. Another option is to explore additional benefits like increased paid time off based on attendance and tenure as well as incentives based on good work performance that are tangible and obtainable for workers.

2) Reduce obstacles and barriers in the hiring process:

We see available and qualified candidates have a much shorter shelf life than ever before. During the hiring process, the goal should be to decrease candidate dropout rates by increasing the speed in the process of hiring. We have helped many clients with the screening process by allowing them to only see quality candidates. The interview process can be further simplified by determining who needs to be a part of interview process prior to reviewing candidates and by being proactive with scheduling virtual panel interviews or multiple rounds of on-site interviews within one day. This allows a decision to made quickly and get an offer out to candidates to ensure they can decide immediately.

3) Understand pay rates in your market:

There are multiple factors that go into fair market pay, such as experience and job duties. However, paying fair market rate does not mean you are being competitive for the top talent. As the saying goes, “the cream always rises to the top.” Especially for hard to fill or unique qualification roles, market rate will be on the lower end and will lead to a longer hiring cycle to fill the role. Competition is at its most fierce. Name brands like Target, Amazon, Chick-Fil-A, and Disney have all raised their pay rates across the board, and a possible $15/hr federal minimum wage is a possibility. Using data to analyze where you are in the market and whether certain positions need to be above market rate can lead to successful hiring of top talent for your organization. Clients who have utilized our consultation with data-backed information have been successful and are filling job orders more quickly, which reduces the total financial impact of hiring.

The market has changed a lot since April 2020. We’ve seen increased walk-offs by employees, decreased application rates, and record incentives for workers to remove themselves from the workforce. Demand for business has started to increase due to higher morale, fueled significantly by increased vaccination availability, making the need to secure talent evident.