The New Workforce Economy: What Employers Need to Recruit and Retain Top Talent
Companies are struggling to find enough workers to fill the 9.6 million job vacancies in the U.S. across a diverse spectrum of industries, even as 7.4 million people remain unemployed.
Those recent figures, from the St. Louis Federal Reserve and the U.S. Bureau of Labor Statistics respectively, point to one of the biggest conundrums of the economic recovery that has followed the worst of the COVID-19 pandemic. What exactly does it take to recruit and retain top talent these days?
The reasons for the difficulty in finding and keeping talent are varied. Coronavirus-related federal unemployment extensions and eviction moratoriums have ceased for many Americans, but a patchwork of assistance programs at the state, county, and city levels remain active in some areas. Though the impact of such programs in keeping potential workers out of the workforce has been debated, highly skilled/highly paid talent would be the least likely to be tempted into extended unemployment.
The Delta variant and reports of waning vaccine effectiveness are dissuading some people from positions that require working onsite. Parents who worked long hours before the pandemic are increasingly prioritizing being with their children regardless of company culture. And many employees who have adapted to working from home balk at the idea of returning to the office, particularly on a full-time basis.
In short, workers face a complex series of decisions and tradeoffs that balance job incentives with government policies, health concerns, family time, and a new appreciation of work-life balance. And for many Americans, holding a job remains far from a priority. Approximately 36% of workers who quit between March and August did so without taking another position, according to McKinsey Consulting Co. As a result of all these factors, employers are experimenting with different recruitment and retention strategies based on their particular business models, despite the vast uncertainties.
PwC, one of the Big Four advisory firms, is allowing its 40,000 employees to work from home permanently. Walmart and Amazon are offering to pay the full cost of college tuition and books of most of their in-store and frontline employees, covering approximately 2.25 million people nationwide. Compensation also is rising for everyone from retail workers to financial executives. Amazon, Costco, and Target all increased their starting wage to at least $15 per hour, while big banks such as Citigroup, Morgan Stanley, Goldman Sachs, and Jefferies raised starting salaries for first-year recruits from $85,000-$95,000 to $100,000-$110,000.
In the technology space, where remote work and high compensation already were common when COVID-19 struck, the challenges are recruiting candidates with the proper skills, and retaining workers who feel that the company values them. The multinational manufacturing and construction software provider Autodesk is tackling these issues by recruiting from other industries, and seeks to retain talent by putting them on key initiatives that can materially benefit the business. This year, Autodesk also ramped up the diversity of its recruitment efforts by partnering with Historically Black Colleges and Universities (HBCUs) on technology externships with the goal of hiring students as full-time employees.
Comparably.com — which compiles lists on employers, brands, and salaries — recently published its Best Perks & Benefits 2021 rankings, based on anonymous feedback from dozens of employees at each company, with breakdowns for large companies and small/medium-sized companies. Google ranked first on the large-companies list. It provides an enjoyable atmosphere and three meals a day from high-quality restaurants, according to one respondent. Pipefy, a workflow management platform, ranked first among small/medium companies. It offers meals, exercise and psychological support, according to a respondent. Comparably notes that perks at other companies include onsite child care, comfortable remote-work furniture, international travel stipends, and paid time off for charity work.
“There is always fierce competition at the executive level when it comes to open positions, but macroeconomic factors at the moment make this a candidate’s market,” says Dennis Theodorou, Managing Director at JMJ Phillip Executive Search. The firm has offices across the country and specializes in global recruiting for positions in the manufacturing, supply chain, and technology sectors. “Companies need to balance providing appropriate candidate feedback while ensuring a thorough recruitment process with sufficient speed. The reality is that, in today’s market, the longer a recruitment process takes, the more likely a great candidate can be persuaded away by another competitive offer.”
In Theodorou’s view, the level of talent shortage is unprecedented, with urgency on the hiring front stemming from two things – firms not wanting to miss out on good candidates, and an underlying need to service the increased level of demand so many companies are experiencing. Whether this is a bubble or not remains unclear, he says, but employers and workers alike should expect the supply-and-demand imbalance to level off gradually, over time.
Although compensation is crucial for executives weighing job offers in the current environment, several other considerations come into play, according to Theodorou. On the financial side, these involve bonuses, the potential for stock options or equity stakes in the company and their timetable for vesting. Non-financial considerations that also might be relevant encompass finding a good cultural fit, being able to implement significant strategies or operational changes, having opportunities to attain promotions, and working at a successful, respected business with a promising future.
On the other hand, if executive candidates already have enough of these features at their current firm they might stay put. In other words, what works for recruitment also can work for retention. “A lot of companies are interested in hiring passive candidates, meaning people who were not looking to make a job change until a recruiter contacted them,” Theodorou says. These workers tend to have proven track records of accomplishing things like eliminating redundancies, reducing costs and enhancing efficiencies. “But if they’re happy where they are, they will need a reason to make that move.”
With the shift to remote and hybrid work environments, companies are struggling to find and recruit the best candidates in a largely virtual interview process that may never involve new workers meeting managers in-person or stepping foot in the employer’s building, according to Juan Betancourt, founder and CEO of Humantelligence. This can impede the employer’s ability to assess a recruit’s personality through facial expressions, body language, and other subtle cues that can shed light on how they would fit with the team they would join or role they would play. Innovative culture software tools can help overcome these hurdles by creating customizable job profiles and multidimensional fit factors by which to assess applicants, he says.
“Success today at companies occurs at the team-level unit, so now with psychometric culture management platforms that we are calling CaaS – Culture-As-A-Service – you can either hire to replicate the success of what already works on a team, or you can hire for diversity of thought,” Betancourt says. His software platform applies brief surveys and detailed data analytics to employee personalities and the culture of companies in order to help team members work better as a group through actionable suggestions within current work flows such as employee emails. Humantelligence counts Ashley Furniture, Lyft, Coca-Cola, Dollar General, Bank of the West, and other large firms as clients.
On the retention front, companies should seek to understand the behaviors, motivators, and work styles of their people. Uncovering the wants and needs of talented individuals, as well as their communication styles, can enable employers to discover when and how to incentivize good employees. This can be through greater financial compensation, clear praise, training that prepares them for promotions, or putting them in roles that are a better long-term fit. “Matching people where they will be happiest, and making the actual job experience positive, is where companies should focus,” Betancourt says.
MANUFACTURER IN ACTION
Contec Americas, an electronics manufacturer and systems integrator, uses Humantelligence extensively for hiring talent as well as aiding in better communication and motivation across the company. “We’re competing against much larger, well-known companies for top talent, so we focus on recruiting and retaining people with interest in our mission, which is technology for a better life,” says Ann Zocchi, Human Resources Manager at the Melbourne, Florida-based business that’s part of the global Contec Group headquartered in Japan. “In addition to people with a technical skill set, we need diversity of thought to ensure we’re looking at problems from all different levels and angles, to solve those problems for our customers and society.”
Due to the nature of its operations, which has included building medical diagnostic computers used in COVID-19 testing, many employees work onsite. As a result, Contec Americas has implemented various precautions and flexible arrangements for its nearly 100 employees. During the worst of the pandemic, this involved creating alternative shifts that split up staffing in the Florida facility to safely maintain production levels while satisfying customers, as well as flexible remote work and extra time off for workers to recuperate mentally. Meanwhile, largely virtual interview processes for job candidates have been culminating in one in-person meeting with likely hires.
Zocchi has found that talented individuals who value the Contec Americas culture appreciate having the ability to work on different types of projects with potentially global implications, instead of being pigeonholed as may be more common at larger U.S.-based technology businesses. Companies that hire the right candidate — in terms of appropriate skills, personality, and growth mindset — are more likely to retain that talent, especially when the communication culture is inclusive and supportive, according to Zocchi. She also advocates redefining where employee and company goals intersect as people advance in their careers.
Chris McClanahan, a Recruiting Coordinator at Stephens who works within Investment Banking, sees the relationship between employer and employee best viewed not just as an economic one, but also as a social one, where good faith is exercised by each party to provide the best possible outcomes for each.
While quality candidates need the right skills, experience, and capabilities, he also looks for candidates with a good attitude, strong moral character, and a desire to better themselves and their workplace. Employees who embody those characteristics should expect the same from their employer, according to McClanahan. Furthermore, top talent often gravitates toward firms with a collegial atmosphere and stable work environment, while honoring its commitments to recruits and fostering long-term career growth, he says.
“2020 and 2021 have produced extremely unique job markets due to the COVID-19 pandemic. The expectations of employers and employees alike have changed drastically,” McClanahan says. “However, the fundamentals for what makes a quality candidate, or employer for that matter, have not changed.”