As rapid and widespread COVID-19 vaccinations usher us into a post-pandemic economy, business owners in many industries now find themselves facing an unexpected labor shortage.
While some business owners may assume that the cause of the shortage is simply the additional $300 supplement to unemployment benefits, the truth is much more complicated than that.
Unemployed job seekers face tough decisions
The labor market is undergoing a massive readjustment right now, and job seeker sentiment is driving it. Jobs that were once easily filled (for example, service sector jobs like restaurants, retail, hospitality, etc.) now face an applicant population reluctant to return to work — or opting for work-from-home roles — for a variety of reasons unrelated to temporary unemployment benefits.
For example, with many schools closed or still implementing a hybrid online model, parents find themselves between a rock and a hard place without access to affordable child care. It doesn’t take long for the cost of child care to match or exceed the wages they might earn in a new job.
In fact, about 2 million women have stopped looking for work since the pandemic began, likely due to these ongoing disruptions in schooling and child care. This is most acutely felt in industries like home health care, where women make up a significant portion of the workforce. According to Home Care Pulse, 31.5% of home care agencies reported very negative impacts of caregiver shortages in 2020, an increase of over 7% from 2019.
Similarly, concerns over COVID safety still plague many jobseekers. A U.S. Census survey conducted in the second half of March found that 4.2 million adults are not working because they are fearful of getting or spreading COVID-19. And in more densely populated metropolitan areas, there’s concern about commuting safely on public transportation before the pandemic is fully under control.
Job seekers’ compensation expectations have changed
Finally, there’s the elephant in the room: Some industries that have historically paid low wages now have a difficult time finding applicants to fill those roles. Hiring in 2021 will not be “business as usual” in these industries.
Consider restaurant workers, for example, who earn a large portion of their income through tips. Many have been reluctant to return to food service since businesses may not be at full capacity yet, which directly impacts their take-home pay. As a result, restaurant workers have left the industry over the past year in favor of more stable wages in other industries.
A restaurant owner might find a shortage of applicants and assume that candidates simply “don’t want to work.” But when we take a more nuanced look at what’s happening to the labor market, we find evidence that those job seekers actually do want to work — just for companies that promise increased pay and security, often in different industries altogether.
Which businesses have seen hiring success in 2021?
2021 is an inflection point in the labor market. Some experts say it’s not a labor shortage at all, but a massive reassessment of work in America. If you’re a small business owner struggling to fill your roles, you’re not alone. It’s happening everywhere.
But the businesses thriving in this moment are those who have changed their hiring practices to put themselves at a competitive advantage. Take for instance, Austin Beerworks, a brewery and tap room out of Austin, Texas, who had this to say on social media:
Similarly, fast-food chain In-N-Out has been hiring and expanding despite the pandemic, thanks in no small part to a higher-than-average pay structure that they’ve used as a recruiting tool for years. The company believes high wages translate to high productivity and low turnover among fast-food workers.
Other companies are taking notice and following suit. Nationwide chains like McDonald’s, Amazon, Wendy’s, and Chipotle have announced plans to raise wages to remain competitive and attract employees. What remains to be seen is whether or not the promises of increased pay will fill these open roles.
How to attract more applicants in 2021
We certainly empathize with small business owners and franchisees who find these job market shifts frustrating and difficult to navigate, especially since you may not have the budget to increase your payroll unexpectedly. So how do you attract applicants in this new world?
Our advice is to lean in to the things you can control. Here are a few tips that we hope will make it easier for your business to attract more applicants.
1. Advertise compensation on job postings.
We’ve always recommended that employers include the compensation range on job descriptions. In a 2020 CareerPlug candidate experience study, we found that job seekers would prefer to learn about compensation sooner rather than later. This becomes even more relevant in a candidate’s job market.
In the restaurant industry, for example, the number of job postings has increased dramatically in recent months as restaurants reopen their dining rooms. As a result, an applicant in the restaurant industry who uploads their resume to job boards is bombarded with responses from employers, putting them in a position where they can be more selective about which businesses they choose to pursue.
As an employer, you have to be as enticing as possible at the beginning of the hiring process. Candidates will concentrate on opportunities that are upfront about the pay because they don’t want to waste their time trying to guess what an employer might pay.
Make sure they don’t pass on your job opportunity simply because you didn’t advertise compensation in the job posting. And if the compensation doesn’t meet their expectations, then you’re saving your own time by not pursuing a candidate that may not convert to a hire anyway.
You could also go one step further and advertise your compensation and benefits the same way you might market a sale to customers. For example, beloved Texas gas station chain, Buc-ee’s, has long advertised their competitive pay and benefits on signs outside their stores for years with great success.
2. Offer a signing bonus.
Most employers are familiar with employee referral programs, a recruiting tactic in which employees are incentivized to produce high-quality candidate leads in exchange for a cash bonus. Employee referrals are always going to be an excellent source of candidates who convert into hires at a 13 times higher rate than applicants from job boards. But in 2021, you might want to also consider offering a bonus to the applicants themselves.
If your objective is to make your job posting stand out from competitors — and it should be — then offering a cash signing bonus is a great recruiting tactic. This may be a new strategy for you as an employer, but we’re in experimentation mode in 2021. You’re going to have to get creative to attract great employees to your roles.
When you consider the cost of the time you’d spend recruiting, as well as job advertisements and other recruitment marketing costs, it’s actually not too far-fetched to instead divert some of that budget directly into your new hires’ pockets. It also serves as a signal to other job seekers that a company values talent.
For employers who are nervous about implementing a cash bonus program, you can always add a stipulation that the signing bonus will be paid after a specified probationary period has passed.
Pro Tip: Never include the compensation or the signing bonus in the job title on job boards. Major job boards remove jobs with title modifications. Instead, have a standard job title and attach compensation to the job posting in the appropriate spot.
3. Show candidates that your business is a great place to work.
2020 was a rough year for everyone, especially essential workers who faced new challenges in the workplace. They’ve been worried about potential COVID-19 exposure at work. They’ve faced more confrontational interactions with customers than ever before.
Most of us have had bad jobs at some point in our lives and carry those negative experiences with us throughout our careers. As an employer, you certainly aren’t to blame for the poor treatment of workers at other businesses — but it’s important to understand that in 2021, job seekers are looking for proof that a company treats its employees well and protects them from bad workplace environments.
One thing you can control is the story you tell about your business. You can use your careers page as a channel to market your employer brand and get candidates excited about working for your company. Ask your existing employees to write or record employee testimonials, which can be a compelling form of social proof for potential applicants.
Add photos and videos of the workplace and the team along with a statement about your company culture, your commitment to their well-being, and any potential growth opportunities. Be sure to include any information about measures you’ve taken to address COVID-19 safety protocols. Most importantly: be authentic about who you are as a company and as a manager.
To learn more about building a compelling careers page, check out this video featuring CareerPlug’s Senior Director of People, Natalie Morgan.
4. Actually be a great place to work.
More than half of job seekers abandon their pursuit of a job after reading negative reviews about a company on employer review sites like Glassdoor and Indeed. If a business isn’t a great place to work, it can develop a reputation that costs them applicants.
Creating a great place to work starts with supporting your existing team. Your number one recruiting strategy should be retention — especially when you consider that it can cost a business up to 33% of an employee’s annual salary if that employee leaves.
Regardless of the job market, the best employees will always have the freedom to be picky about where to work. Make sure you don’t lose them to someone else.
To build a retention strategy, make sure you’re doing the following:
- Hire the right people who share your core values.
- Hire people who want to grow with you.
- Give employees a sense of purpose in their work.
- Provide frequent feedback to help employees improve and grow and give them the opportunity to provide feedback too.
- Find out people’s big dreams and motivations and help them achieve what they want.
- Develop growth paths or career tracks.
- Find ways to nurture social relationships between employees.
- Create transparent and equitable policies around hiring, pay, promotions, and terminations.
- Communicate openly, even during tough times.
For more on how to increase employee retention, check out our guide, Employee Retention: A Guide for COVID-19 and Beyond.
The most important thing to remember is that empathy for your candidates will go a long way. Consider their struggles. Recognize what they want and what they need — and do your best to give it to them.
2021 Recruiting Metrics: Benchmark Data by Industry
See how your business’ hiring and recruiting stats compare to others in your industry by downloading our 2021 Recruiting Metrics Report.GET MY FREE PDF COPY