{"id":8821,"date":"2021-08-17T18:24:54","date_gmt":"2021-08-17T18:24:54","guid":{"rendered":"https:\/\/affinityhrgroup.com\/?p=8821"},"modified":"2023-11-27T20:27:44","modified_gmt":"2023-11-27T20:27:44","slug":"how-to-survive-the-2021-labor-shortages","status":"publish","type":"post","link":"https:\/\/theworkplaceadvisors.com\/how-to-survive-the-2021-labor-shortages\/","title":{"rendered":"How to Survive the 2021 Labor Shortages"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">I\u2019m writing this the morning of August 6, and the monthly jobs report from the USDOL has just been issued.\u00a0 Last month\u2019s report was somewhat underwhelming, so this one has been eagerly awaited.\u00a0 It has lots of good news:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The economy added over 943,000 jobs in July, well ahead of economic forecasts.\u00a0 The biggest gains were in hotel, restaurant, and public school positions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US unemployment rate is now 5.4%, down from 5.9% in June.\u00a0 That is a significant monthly drop.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Average earnings are up 4% from July, 2020.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Despite all this positive news, if you are an employer trying to hire, you are most likely not smiling.\u00a0 2021 has brought a significant labor shortage that has impacted employers across industries and occupations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In June, the Washington Post published a list of the occupations facing the most critical labor shortages.\u00a0 Among the top ten:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sawmill workers (#1)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Long haul truckers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Veterinarians<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mental health practitioners\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Not exactly a homogeneous list, is it?\u00a0 And while the labor shortage is certainly challenging, there are some strategies you can adopt to help you meet those challenges.<\/span><b><\/b><\/p>\n<p><b>1. Don\u2019t Blame It on COVID<\/b><\/p>\n<p><span style=\"font-weight: 400;\">COVID certainly knocked the rug out from under the economy, but many of the factors influencing current labor shortages existed before the pandemic.\u00a0 The working age population of the US has been shrinking for a while now, and the lack of affordable, available child care and parental leave has kept many parents out of the workforce.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Record stock market results and increased housing prices have influenced many older workers to re-assess their financial positions and decide to leave the workforce.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And don\u2019t assume this will all go away when COVID is \u201cover.\u201d\u00a0 With case increases on the rise almost everywhere, \u201cover\u201d doesn\u2019t seem imminent.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Extended federal unemployment benefits, scheduled to expire next month, have been widely blamed for being an incentive to stay home.\u00a0 However, over half of US states have already ended this extension with no reported impact on availability of qualified workers.<\/span><b><\/b><\/p>\n<p><b>2. Understand Salary Compression \u2013 And Take Steps to Address It<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If you haven\u2019t heard of salary compression \u2013 or your organization hasn\u2019t experienced it \u2013 consider yourself fortunate. It occurs when the salary relationship between two or more employees is too small to be equitable.\u00a0 It occurs across industries and impacts jobs at all levels, although right now the impact on low wage workers and their team leaders and first-line supervisors is particularly significant.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A common example involves a new hire that demands more than current employees performing the same work.\u00a0 If you really need this new hire, you pay them what they are asking and then figure out how to manage that internally.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There\u2019s no easy, single solution to resolve this situation.\u00a0 Some strategies that do help include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Standardizing pay practices and eliminating out of cycle salary increases<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Creating promotional paths and career ladders for experienced employees<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Attracting new hires with a combination of base salary plus signing, performance, and\/or attendance bonuses to minimize internal equity issues<\/span><\/li>\n<\/ul>\n<p><b>3. Out with the Old<\/b><b><\/b><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s not too early to discard some out of date pay policies that simply don\u2019t work in the current environment.\u00a0 Now is the time to get rid of annual reviews of salaries and pay policies (once a year isn\u2019t often enough), across the board pay increases of 2%-3%, and giving out of cycle increases in response to individual employee \u201casks.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead, it\u2019s time to think about year-end planning.\u00a0 Some things to focus on now include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Analysis of current pay levels to identify both external competitiveness and internal equity issues<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Research of market competition, including new employers in the area (they frequently offer very high starting salaries to lure experienced workers), employers expanding facilities, and changes to competitors\u2019 salary policies<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Analysis of turnover and recruitment statistics to determine why employees leave \u2013 and where they go \u2013 and why prospective employees refuse offers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Progress toward achievement of 2021 business objectives, in anticipation of payout under existing incentive plans<\/span><\/li>\n<\/ul>\n<p><b><\/b><b>4. Retain \u2013 So You Can Recruit Less<\/b><\/p>\n<p><span style=\"font-weight: 400;\">One of the best ways to avoid the recruiting headaches of 2021 is to keep the employees you have.\u00a0 That\u2019s not an easy task \u2013 so many people have left their jobs this year that economists have dubbed this the \u201cgreat resignation.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So what can you do to retain employees?\u00a0 An early 2021 Prudential Pulse of the American Worker survey reports that 26% of surveyed employees plan on leaving their jobs this year.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Of those, 80% cited lack of career advancement as a reason, 72% said they were rethinking their skills and careers, and an overwhelming number wanted more flexibility in scheduling and Work from Home options.\u00a0 These, of course, are in addition to pay and benefit and lack of good supervision issues that always make the list of why employees leave.<\/span><\/p>\n<p><b>5. Understand Your Competitive Markets<\/b><b><\/b><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019re often asked by clients to \u201cfind out\u201d what a specific competitor in the same industry pays for a certain job.\u00a0 Organizations typically don\u2019t volunteer that type of information, but even if they did, there wouldn\u2019t be a lot of value in it.\u00a0 Yes, you have competitors in your industry, but you most likely have lots of other competitors as well.\u00a0 If you hire entry-level employees, you are competing with big box retailers.\u00a0 And your accounting, finance, human resources, customer service, and IT employees can pretty much pack up and go to work anywhere.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A few years ago, a regional banking client lost their ENTIRE accounting\/finance department (think CFO through accounting clerks) to a state agency that opened an accounting office in the area.\u00a0 It\u2019s doubtful the bank thought of a state agency as a competitor, and that certainly was a tough lesson learned.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All of this can seem overwhelming.\u00a0 We at Affinity HR Group are always here to help you get started.\u00a0 And recognizing your employees and thanking them for their contributions is another good place to start.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By Susan Pal\u00e9, CCP, Vice President for Compensation \u2013 Affinity HR Group, Inc.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I\u2019m writing this the morning of August 6, and the monthly jobs report from the USDOL has just been issued.\u00a0 Last month\u2019s report was somewhat underwhelming, so this one has been eagerly awaited.\u00a0 It has lots of good news: The economy added over 943,000 jobs in July, well ahead of economic forecasts.\u00a0 The biggest gains [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":10079,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[9],"tags":[13,27,15],"class_list":["post-8821","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-compensation","tag-recruiting","tag-susan-pale"],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - 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