An interesting thing is happening in America right now. People are quitting their jobs, and many of them are doing it without another job lined up. In fact, there are now an estimated 5 million more job openings than unemployed workers in the US job market. According to CNBC journalist, Jeff Cox, these workforce dynamics play a critical role in the inflation rates and, consequently, the interest rates. Experts believe an organic labor movement, initiated from the Covid pandemic, is now reshaping the values of the labor market.
As companies have a harder and harder time hiring employees, the companies are forced to spend more to secure talent. Benefits that used to come only with a labor union on your side are being offered at an unprecedented rate. People want higher wages, a more flexible work schedule, better health and family benefits, and the opportunity to work outside of the office. Still not good enough? Try throwing in a signing bonus. Brand new nurses just out of nursing school are being offered thousands in signing bonuses. Some hospitals and dentist offices have been reported as offering a signing bonus as high as $100,000 for experienced doctors. As wages increase, so do the costs of goods and services sold, causing inflation to inch higher and higher. This has resulted in the Federal Reserve to raise interest rates.
For the month of February, the highest sectors experiencing unemployment were education and health services. Teachers coming out of an educate-from-home setting during the Covid pandemic are realizing the time spent away from their families, while at school, is not worth the stress they are experiencing and are leaving in masses.
So how can employers secure talent in this labor market? A staffing agency is a great place to start. With many businesses being short staffed, employers don’t have time to search for educated and skilled workers. Staffing agencies complete the job postings, talent searching, interviewing, and hiring for you. Professional staffers know your local labor trends and what’s needed to secure available candidates. They have spent the needed time to build networks, get referrals, and dialogue with available candidates.
Furthermore, a couple initiatives can be put in place to help overcome the “Great Resignation” such as:
Focus on referrals to increase employee retention.
Unfortunately, the Great Resignation is not over yet as 41% of employees stated that they plan to search for a new job in the first half of 2022. The good news is that referred employed in most cases, stay with a company longer. With a recent case study, it was found that 45% of referrals stay for four years or more, and only 25% of employees sourced from job boards stay for longer than two years.
Shift to referrals to reduce costs and time to hire.
The fact that referrals stay longer is an important detail from a financial perspective. Employers spend an average of $26,000 annually replacing workers who resign. So, the fewer employees that leave, the better. More so, that savings bridges into the hiring process. 55% of companies have declared that referred candidates are less expensive to hire than non-referral candidates. Last but not least, these individuals are also faster to hire, taking down the average job acceptance process from 39 – 55 days to approximately 29 days.
Start paying candidates instead of job boards.
The price per post on a job board varies, but it can cost up to hundreds of dollars to post a job description on just one board. As seen over time, the price of posting on job boards is getting more expensive. If these posts are not getting as many qualified leads or applicants, why not inject that money towards referrals? The main benefit of the referral program is that you can pay your employees, candidates and other contacts to send qualified applicants your way. This will also establish the groundwork for building stronger relationships and loyalty. A referral program creates brand ambassadors, employees and candidates who will promote the company within their networks; which is something that job boards can’t do.
Find passive candidates you can’t find anywhere else.
Not only do referrals help you reduce job board spend, improve recruiter productivity and increase employee retention, they can also help you find talent that you would never have found through the traditional channels of recruiting. The helping hand of a referral network is essential in attracting top talent as well as helping to retain your existing talent during times of uncertainty.