Explore five ways to stay ahead of the curve as the economy recovers and businesses compete for top talent in a more flexible job market.
- A tighter labor market is the likely long trend.
- Looking to grow? You may not want to delay hiring—only to be busier and in more need of workers a year from now.
- Rethink some fundamental factors—like compensation, culture, and benefits—to gain a hiring edge.
Ready to grow your business? Think ahead about how to better recruit and retain employees as the economy regains momentum.
Because the so-called “war for talent” among employers is likely to stay intense.
Consider these data points: Job postings on Indeed.com in early 2022 remained more than 60% higher compared to their pre-pandemic benchmark. And in January of 2022, 47% of small business owners still were unable to fill jobs—a metric that reflects the ongoing scramble to find employees.
You can stay focused on consistently competitive recruitment and retention as you optimize your business for growth. Here’s how.
5 factors to attract employees and keep them happy
Mark West, national vice president of business solutions for Principal®, says growing businesses may want to act on hiring rather than delay. “You may need to find time to hire and train or you’ll still be having the same conversation a year from now,” he says. “Your business will have grown even more, and you’ll only be busier.”
Help your business compete in a hiring boom with five (updated) fundamentals.
1. Rethink how to handle compensation.
If you’re in a high demand industry (such as skilled trades) you may need to pay higher wages. Do you have remote employees scattered nationwide? That may complicate compensation with different regional costs of living.
If you own a professional firm, consider offering incentive compensation sooner and to younger employees, West says. This helps them feel more like co-owners as they work their way toward partner status. “You want employees to be focused on your business growth, so they’re encouraged to make the right decisions to help get you there,” he says. Broad solutions such as an employee stock ownership plan (ESOP) are available to turn staff into stakeholders and enable long-term succession planning.
Smaller businesses that may not always be able to compete with larger companies on compensation can focus on some of the other ideas in this list.
2. Understand how employee benefits affect recruitment strategies.
More business owners are looking to employee benefits overall to improve recruitment and retention—65% of them in our Business Owner Insights survey.
While retirement savings and health insurance tend to be the main benefit magnets for employees, West says, the pandemic reminded us of the value of different types of employee protection (think life and disability insurance). “Virtually everybody knows of someone who passed away at a young age or has suffered a disability in the last two years,” he says. “There’s a heightened awareness that we’re not invincible.”
Explore competitive employee benefits like retirement savings, group benefits, and life and disability insurance.
Video: Business owner Peggy Shell and a Principal benefits expert discuss attracting and retaining talent.
3. Build an inclusive, purpose-driven company culture to help hiring and retention.
Many workers shaken by the existential crisis of the pandemic now crave a greater sense of purpose from their jobs and employer. “People are making decisions from their heart,” says Peggy Shell, CEO and founder of Colorado recruiting firm Creative Alignments, a Principal client. Pew Research earlier this year found that most unemployed adults (66%) have considered changing occupations. “They feel more empowered to leave a job or industry that doesn’t match their values,” she says. Meanwhile, interest in inclusive candidate pools (race, gender, culture) has increased tenfold in the last year among her business clients.
4. Don’t neglect individual fit as you pursue exceptional talent.
If you compromise too much on hiring the right employees for the right roles in a desperate rush to fill openings, you may compound problems with higher turnover.
Learn more from Shell about how to make your business “people-centered.” See and appreciate the whole person beyond the narrow skills you seek when hiring, and then consistently empower them as employees.
5. View flexibility as table stakes to attract talent.
Today’s more global and virtual workplace tends to prioritize productivity over presenteeism, so flexibility is becoming standard for more roles and can help maintain work-life balance. But set the expectation that flexibility runs both ways—you may need employees occasionally to use remote access to make themselves more available—or you may sacrifice business productivity.
“This remains an employee-driven market,” Shell says, “and it’s potentially harder than ever to find the right talent.” But updating and customizing these fundamentals can help.
- Are you competitive? Try our Principal® Benefit Design Tool: See how your benefits stack up against other organizations of your size, industry, and region.