Employee recruitment and retention are a top concern in all industries and in all markets. In addition, the coronavirus (COVID-19) pandemic has had a significant impact on the workplace and on the mentality of employees. As a result, there is both a national decline in the number of people who want a job, and a shift in the type of work people want to do and where they want to work.
According to the most recent numbers from the Bureau of Labor Statistics, the number of persons not in the labor force and not currently looking for employment sits at 5.4 million. The national unemployment rate is 3.8 percent. Job growth is currently widespread with the most prominent gains in leisure and hospitality, professional and business services and construction. Putting all these factors together leads to only one place … a war for talent.
Employers do have options though. The easiest and most obvious solution to recruit and retain talent is money. Wage increases are occurring around the country to entice key employees to stay and to lure employees to switch companies, but we all know the money pot has limitations and the business must remain profitable.
Companies also should be mindful of pay equity issues. Employees rarely keep salary information confidential. Significant differences in salary can lead to employee distrust. Employers should be mindful to pay existing talent and incoming talent commensurate with experience and expertise.
In addition, the Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work. Job content — not job titles — determines whether jobs are substantially equal. All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. All of these factors should be taken into account when wage increases are part of a compensation package.
Employers should keep in mind that, post-pandemic, money is not everything. The priorities of employees have evolved as a result of COVID-19. FlexJobs, a job site for flexible employment, reported 16 percent of workers surveyed said they were searching for a new job because of flexibility issues.
More than 25 percent of those surveyed indicated they would agree to a 10 or 20 percent salary reduction in exchange for a flexible work arrangement. Work-life balance has become an expectation of today’s workforce. Post-pandemic employees value time with family, limiting commute time and lowering stress levels.
In surveys across the board, flexibility is ranked above money, status or titles. Workplace flexibility does not just mean working remotely. It also can include flexible departure and arrival times, choice of work shifts, compressed work weeks and additional leave time, among others. For flexibility to be successful, employers must align incentives with outcomes and eliminate flexibility stigmas in the workplace.
Benefits also are a key recruitment tool. According to the Bureau of Labor Statistics, today’s compensation packages are typically comprised of approximately 70 percent salary and 30 percent benefits. As a result, employees are looking for the companies that offer the best benefits from health insurance to paid sick leave. Companies are enticing employees with a 401(k) match, disability insurance, additional paid time off, life insurance, wellness benefits, tuition assistance and commuter assistance.
Using these ideas and tools in conjunction with each other can help you win the war for attracting and keeping talented employees.
Providing new workplace incentives
Employers are experiencing a pronounced, if not unprecedented, challenge recruiting and retaining requisite talent. To address these issues, employers are expanding their playbooks to include a variety of new incentives and enhancements to the workplace experience. More frequently utilized approaches include:
Increased base compensation.
Implementation of or increases in hiring or other bonuses.
Enhanced benefits such as childcare stipends or tuition reimbursements.
Hybrid work arrangements.
Providing employees expensive gifts or experiences.
While these approaches can be effective in achieving the primary recruitment goal, consideration should be given to the potential legal, business and morale implications they can create. For example, base compensation or bonus increases can:
Result in potential disparate impact or treatment issues.
Create animosity between new and more tenured employees.
Create bargaining obligations in a unionized environment.
Be exploited by unions interested in organizing an employer’s employees.
Similarly, incentives intended to improve the employee experience or make employees feel valued also implicate employment and labor law, tax and employee relations issues. Even attempting to increase the candidate pool by revising or eliminating existing requirements — e.g., drug tests, education or experience — are not issue- or risk-free propositions.
Ashley Cuttino is co-chair of the COVID-19 Litigation Practice Group at Ogletree Deakins, Atlanta.