Extraordinary incentives for employees still in play in today’s job market

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As some segments of the U.S. workforce have begun shedding positions due to the unstable labor market and economy, a recent survey indicates competition for top talent is still fierce as 80% of companies are taking steps to make hiring easier. According to new research from The Harris Poll commissioned by Express Employment Professionals:

  • In the United States, four in five hiring decision makers (80%) say their company is taking steps to make it easier to hire, including offering higher starting salaries (33%) and hiring bonuses (29%).
  • More than a quarter (27%) say they offer remote work and/or offer better benefits (e.g. more paid time off, flexible hours, etc.).
  • About 1 in 5 (21%) say their company is expanding the geographic areas where it advertises vacancies (e.g. other cities, states, etc.), offering more internships (19%) and/or reducing qualification criteria for vacancies. (19%).
  • Nearly three in four companies (71%) said they had changed their benefits in hopes of retaining current employees or attracting new ones.
  • Three in 10 (32%) say they have increased the amount of paid time off offered to employees, increased the amount of sick leave offered (31%) and/or offered additional health care incentives, such as a subscription to a gymnasium or mental health resources (28%).

Mismatch of expectations

However, despite the progress companies have made in compensating workers, meeting the compensation expectations of all employees can be complicated.

About 71% of U.S. hiring decision makers say it’s impossible for them to provide all the benefits employees currently want — a sentiment that has held since 2021 (69% in the first and second semester 2021).

Consistent with these sentiments, about 3 in 10 (31%) say their company has seen an increase in turnover so far this year due to better wages/benefits offered elsewhere. Twenty-six percent of employers said better benefits elsewhere contributed to higher turnover (eg summer Fridays and unlimited vacation days).

Companies indicated that their lack of competitive compensation (16%) and/or benefits (16%) are among the biggest hiring challenges they will face in the coming year.

High salaries

In Florida, Express franchise owner Mike Brady said the only employee incentive he noticed was lower hiring bonuses. “That’s the only small change I’ve seen in our market,” he said. “Despite this, there are still plenty of jobs to choose from for job seekers and those ready to change. It’s still a market for job seekers!

The majority of applicants accept positions because of compensation or incentives, which is why companies are keeping pay rates at historic levels along with other perks offerings, said franchise owner John Culpepper. Georgia Express. “The recession is inevitable, but unlike previous ones, a low labor force participation rate, low unemployment rate and rising cost of goods have left job vacancies extraordinarily high. Companies must differentiate themselves and attract talent by using incentive compensation.

The Role of Company Culture in Recruitment and Retention

With the high demand for salary increases and other benefits, companies are struggling to meet the costs and are beginning to assess the quality of certain hires.

“I’ve had several business owners tell me they don’t want to pay more for less qualified talent, work ethic and experience,” Brady said.

Beyond the pay scale, Culpepper argues, a healthy workplace culture and community reputation is what attracts workers and keeps them staying. “Strong employee-centric companies have been shown to withstand the challenges of today’s marketplace,” he said. “These companies are finding that they don’t have to increase wages and benefits to attract and retain. Although it sounds simple, it is not. It must be genuine and from the C suite down.

Labor market forecasts

Looking back 6 months, neither Culpepper nor Brady anticipate much change in the tight labor market.

“I’m concerned about escalating costs due to inflation and the need for workers to earn more to keep up,” Brady said. “Rising costs will cause companies to reach a breaking point. The resulting impact is a guessing game.

Culpepper said if market conditions turn into a recession with slower business demand, the outcome will force a change in employee tenure. “Employees are currently treating our marketplace like a buffet, choosing to come and go from businesses as they please because they know it will always be there,” he said.

“Once access is limited, employees will put more on their plate – stay longer – for fear of burnout. It doesn’t change who the employee is or their work ethic; it just forces engagement. Large corporations with employee-centric cultures are exclusive “reservation-only” restaurants, appealing to the most favorable “taste buds.”

Investing in quality employees who bring value to the table is imperative to the success of any business, said Bill Stoller, CEO of Express Employment International. “Not every company can offer everything job seekers want for a job, but often reasonable pay and benefits coupled with a healthy work environment will attract the right workers at the right time.”

The survey was conducted online in the United States by The Harris Poll on behalf of Express Employment Professionals between May 3 and May 23, 2022, among 1,003 U.S. hiring decision makers (defined as older adults 18 and older in the United States who are full-time or self-employed, work in companies with more than one employee, and participate fully/meaningfully in hiring decisions at their company). The data have been weighted, where appropriate, by company size to bring them into line with their actual proportions in the population.

To learn more about the survey, contact Sheena Hollander, director of corporate communications and public relations at Express Employment Professionals, at (405) 717-5966.

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