An Overview of the Labor Shortage
The data is clear: employers are facing labor shortages in the United States. According to the Bureau of Labor Statistics, job openings rose to an unprecedented 9.3 million at the end of April 2021.
As the pandemic continues, we’ve faced more than a year of limited freedom and lost socializing opportunities. As a result, we are releasing a pent-up demand beyond the staffing capabilities of most businesses.
Despite high levels of unemployment, many organizations are struggling to hire and retain model employees, leading to high turnover rates. This constant cycle of hiring, onboarding, and discharging is costly- both financially and in relation to current employee and customer satisfaction rates.
To try and make positions more desirable, many businesses have added benefits and increased their wages as many states are approving a cut in unemployment benefits.
But is giving unemployed individuals less money the solution to the labor shortage? Data suggests the effect is likely to be minimal. The answer to this question may be less about worker pay and more about worker rights, as businesses who have prioritized employees are more likely to see better hiring and retention rates.
The Cost of (a Lack of) Labor
The Work Institute estimates that employers spent approximately $680 billion in 2020 on expenses related to voluntary suspensions of employment within their organizations.
But the cost of the labor shortage requires more than money. Constantly training new employees takes limited time and attention away from overextended, veteran staff members. Unorganized training processes can lead to negative experiences and worsen retention rates.
And while compensation is certainly an important factor in the worker shortage, it certainly isn’t the only cause.
Time May Be More Valuable Than Money
Many families are facing the issue of childcare. Parents express that they want to make sure their kids are going back to school full-time, which is why many people are hesitant to return to pre-pandemic employment schedules until they know their children have access to consistent care.
Furthermore, workers want a better work-life balance and scheduling flexibility. The COVID-19 pandemic has prompted the world’s largest remote-work experiment and we’re still feeling the effects of that today. As many businesses are offering telecommuting, workers are starting to realize that greater work flexibility is attainable.
Many employees feel that working in-person is only necessary a few times a week, allowing them to use their extra day or two working from home to achieve the work-life balance they’ve been hoping for.
The Work Institute also cites a lack of career development opportunities as one of the main contributors for employees searching for other career paths. The report states that over one in five employees felt their organization offered no career development opportunities, which prompted their decision to seek employment elsewhere. Workers want to feel valued and appreciated. It’s important for employees to see the product and reward for their time and labor.
The solution to the labor shortage lies in giving employees the opportunity to advance their careers, enjoy their home lives, and feel safe at work. These benefits are often more valuable than a small wage increase.
Bolster Trust Between Employer and Employee
Fenix Verify offers a number of tools to help encourage sustainable, long-term relationships between employers, employees, and customers. Health and hygiene audits for those hesitant about COVID-19 procedures, digital checklists to monitor concerns, employee and customer satisfaction surveys, employee pulses to monitor the well-being of your employees, and mystery shopping to ensure that policies are being followed all can bolster a productive environment within your business. Your dashboards can monitor all of this data and provide notification and remediation without hand-wringing.
Obtaining actionable data can help with your recruitment and retention rates. Schedule your demo on our website today.