We may have reached peak labor market insanity. I decided this after reading about a company that is giving away a $ 10,000 daily prize in a raffle for employees. They are also going to award a Barbados vacation for 4 and then a Tesla as a grand prize. The catch: you must be vaccinated and work in the office to be eligible.
While it seems crazy, many companies are going to extreme measures to attract workers to their company and/or back to the office. Free food. Paid private transportation. Gift cards. It’s like every company is having to act like a tech company, an industry that’s wrestled for years with a talent shortage.
There are many reasons for this perceived labor market insanity
There are several reasons for this current imbalance in the labor market. The CEO of Best Buy, Corie Barry, mentioned four in her earnings call this week. To her credit, she did not focus on extended unemployment benefits, which despite political attention, most research has shown is having a relatively minimal impact. The number one issue she cited was the care gap. Many schools, camps, and day cares are still operating in pandemic mode with reduced hours and spaces. In addition, children under 12 can’t yet be vaccinated, so parents have to weigh the risks. Second, people are still concerned about their own health and safety. Her final issues were more retail specific. Retail workers got a painful lesson that they are essential, required to show up in person, enforce public health policies like mask wearing, and deal with a stressed out public. Jobs that enable more remote work, flexibility or less “dealing with people” are just more attractive now. As a result, there is intense competition and rising wages across retailers.
What she didn’t mention is the accelerating retirement of the boomers. More than 3 million boomers left the workforce in 2020, more than double the number in 2019. It was particularly pronounced among those with only a high school education, affecting retail, hospitality, distribution and manufacturing disproportionately.
So what is a company wrestling with open roles to do?
The most obvious answer is to look at compensation. Heidi Shierholz, a senior economist with the Economic Policy Institute noted, “I often suggest that whenever anyone says, ‘I can’t find the workers I need,’ she should really add, ‘at the wages I want to pay.’” But based on 20 years in tech and everything we do around culture for WeSpire customers, I would suggest that pay is only one part of the equation.
Yes, employees need to feel that there is a “fair value” exchange happening relative to other options, which is not just base compensation, but hard and soft benefits. A hard benefit is the health care contribution percentage. A soft benefit is being able to set your own hours or work from home. There are other factors that matter immensely and I think the pandemic has only heightened these for the workforce.
Does what I do really matter? Is my company helping make the world a better place?
Yes, purpose matters. Study after study has found that employees want a greater sense of meaning from work and that need accelerates after major life events that cause people to reassess their lives. Covid-19 was one giant global reassessment, with the industry and company specific fallout just beginning to manifest. WeSpire’s own research showed that if an employee feels like their company is making the world a better place, they are twice as likely to stay in their job. Job purposing can happen in any role, in any industry. But companies have to focus on it.
Do I feel like I belong? Does my opinion matter? Do my company care about my wellbeing?
Research from BetterUp in 2019 found that strong workplace inclusion and belonging reduces an employee’s risk of turnover by 50% and absenteeism by 75%. The pandemic has also dramatically increased employees’ focus on the importance of safety and holistic wellbeing. Companies need more robust wellbeing programs to make it clear they care.
Are there opportunities and support for me to grow? Am I recognized for my impact?
People want to grow and want to know their contribution is important. Companies need to offer strong cross training opportunities, leadership development, and embed a culture of recognition.
Once a company is in the realm of “fair value exchange”, focusing on these other factors is what differentiates you as a great place to work. These principles will help you attract, and keep, the people you need despite labor market insanity. No Tesla raffle required.
“Culture is to recruiting as product is to marketing.”
Hubspot Culture Code