Hiring talented employees is always difficult, but it’s especially hard right now. With persistently low unemployment rates, a surge in unionization, and the lingering effects of the “Great Resignation,” it can feel like quality applicants hold all the cards.
The best employees are going somewhere, though. By creating an accessible application and hiring process, you can still attract great talent. You can also minimize the need for new hires by retaining your existing employees and promoting from within. Read on to learn more about how to navigate such a competitive labor market.
The COVID-19 pandemic and its aftereffects fundamentally reshaped the relationship between employers and employees. First came the Great Resignation, with the national quit rate reaching a 20-year high in fall 2021. Next came “quiet quitting,” with employee engagement falling to 10-year lows. Meanwhile, after decades of declining unionization, the power of organized labor is growing again.
All of these trends point to one thing: Job seekers hold the upper hand. Though it can be tempting to believe that these are temporary changes, most business leaders don’t foresee an imminent reprieve.
The new hiring landscape is not only frustrating; it’s also expensive. The Society for Human Resource Management estimates that it costs a business nearly $5,000 for each new hire. Given this cost, businesses simply cannot afford to get hiring wrong.
Hiring is no longer as simple as posting a job description and hoping for the best. Today, companies must think strategically about a number of factors, including what they’re saying through their job postings, where they’re posting ads, and how to comply with the law in interviews.
JobSage recently surveyed 1,000 full-time workers and 400 hiring professionals to understand the hiring process today, yielding common mistakes that firms can avoid. Here are some of the key insights the survey uncovered:
Communication throughout the process is key. Even if applicants are very interested in the opportunity, they aren’t likely to wait around if they don’t know when a decision will be made. Just as an applicant should write a thank-you note after an interview to demonstrate continued interest, companies can drop a quick note to the best applicants to let them know that the interest is mutual and to update them if the process is delayed.
Even the best-intentioned human resources policies are only as effective as their implementation. Consider investing in top-of-the-line human resources software so you can follow hiring practices closely and use data to proactively identify ways the practices are not having their intended effect.
Employees’ pet peeves in the hiring process include unreasonable expectations for candidates and lengthy timelines for making a decision.
Ethena, a compliance training platform, offers a case study on how to get the hiring process right. In 2021, the company announced a clear and transparent pay formula for engineers. It resulted in an immediate spike in applications, with more than 70 percent of applicants citing pay transparency as a key factor in their decision to apply for or accept the position. In less than a year — a year when many others were struggling to hire — Ethena’s head count grew 35 percent.
Roxanne Petraeus, founder and CEO of Ethena, believes the company’s pay-transparency decision sent a powerful signal to applicants. “It shows applicants that we don’t have an adversarial relationship with our employees,” Petraeus said. “That includes the hiring process and setting their initial salary, but it also shows them that, if they’re hired, they’ll be evaluated with a degree of objectivity and they will know what to expect in terms of salary progression.”
Ethena was ahead of the game. In November 2022, New York passed a new pay-transparency law requiring all job ads to list a salary range — a move Petraeus applauds. But she said companies should focus not just on complying with the law but also following its spirit.
“It’s good for morale and for the bottom line for everyone to be on the same page,” Petraeus said. “People talk about salaries anyway, so companies should try to get out ahead of that and have an open and transparent conversation.”
Industry-leading companies will always be able to outbid for employees who are focused primarily on total compensation, so startups and smaller enterprises shouldn’t plan on winning bidding wars. However, smaller and more nimble companies can offer something that can be more difficult for their larger competitors to provide: flexibility.
As you consider the perks you use to lure potential employees, look for low- or no-cost benefits that employees may value highly. Employees who have grown accustomed to working from home may want to maintain that arrangement. Parents may want to take personal time in half days to attend school events without expending an entire day. Staff may want to work on cross-departmental projects to learn and grow or have a guaranteed opportunity to meet directly with company leadership to express their ideas and concerns. Employees who are thinking about retirement may want to know that their benefits package is managed by one of the expert provider firms.
In discussions with applicants, stress that you see the hiring process as a conversation rather than an offer to be accepted or declined, and encourage them to think creatively about and ask for what truly matters to them. You may not be able to give them everything they want, but at a minimum, it may remind them that working for a more entrepreneurial company can mean more flexibility and a greater focus on their needs.
Oftentimes, employers look outward when hiring when they could be looking at their existing talent pool instead. Your business may have junior employees who are well suited for development and promotion.
Though the stereotype is that Gen Z and young millennials jump from job to job, Ryan Jenkins, co-author of Connectable: How Leaders Can Move Teams From Isolated to All In (McGraw Hill, 2022) and founder of LessLonely.com, said that doesn’t need to be the case.
“When it comes to attracting, retaining and engaging young workers, the answer is connection,” he said. “Employers have to create environments, whether in-person or remote, where workers feel seen, heard and valued. When you do that, job performance improves by 56 percent.”
In the right environment, young employees can even become assets for recruitment. “Workers are 167% more likely to recommend their employer when they feel connected to their colleagues,” Jenkins said.
Focusing on improving employee retention rates, not just among junior employees, can be a smart strategy. A Work Institute study found that three-quarters of employee turnover is due to preventable causes and that the No. 1 reason employees leave is for career development. With this in mind, give your highest achievers, and indeed all employees you want to stick around, opportunities to sharpen their skills and move up the ladder.
When an employee asks for a raise or a new title, remember that saying “no” may necessitate replacing them, thereby creating new costs that far exceed the request. However, Jenkins stressed that money is not the only factor in keeping employees happy; it can be just as important to create and maintain the kind of culture that makes employees want to stay. “When individuals have a strong sense of belonging and connection at work, they have 313% less intent to quit,” Jenkins said.
You can track your employees’ performance and determine who might be ready for a promotion by using one of the best HR software platforms, many of which include career development tools to help coach your employees.
Another way to keep employees satisfied is to ensure that human resources functions, including payroll and benefits administration, are efficient and reliable. Working with a top-tier professional employer organization can be a cost-effective way for smaller companies to handle these tasks. When employees do leave, find out why by conducting an exit interview.
Talented employees are the lifeblood of a successful company. With smart recruiting, hiring and compensation strategies, many of which are free or low-cost, you can separate your company from the pack and attract top talent.