Skip to main content Skip to footer site map

Understanding the Hiring Crisis and How To Overcome It

Manager interviewing candidate during hiring process

Hiring in the last year has been one of the biggest challenges facing businesses, largely due to the complexities brought on because of the COVID-19 pandemic. With employees in such high demand, companies are having a hard time finding people to fill positions, retaining current employees, and retaining them once they're onboarded, resulting in a U.S. labor shortage unlike any other we've seen in the past.

While the hiring crisis may stem from multiple factors, the fact remains that businesses need to keep operations up and retain staff to do the work. What has precipitated the U.S. labor shortage, and how can employers effectively address these challenges to keep their businesses moving forward?

Why Is There a Labor Shortage?

The current work landscape in the U.S. poses a unique challenge for employers. The U.S. Department of Labor reported that there were about 10.4 million job openings at the end of September 2021, along with 4.4 million employees quitting their jobs, the largest increases of which were found in arts, entertainment, and recreation; state and local government; education; and other services. Figures such as these offer a glimpse into the current hiring crisis: there are more vacant jobs than available workers.

Why is there a labor shortage? A primary reason is that individuals continue to experience the effects of the COVID-19 pandemic, whether they are hesitant to return to onsite work, feel uncomfortable being in close proximity to others as it could expose them to the virus, or are tasked with juggling personal and work responsibilities. With such challenges at the forefront of their minds, employees are also now expecting better pay and more flexible working arrangements — demands that some employers may not be prepared to meet.

Another factor contributing to the U.S. labor shortage is the struggle to provide or find adequate childcare. Some parents still face the challenge of schools and day care centers not being fully reopened or are contending with soaring costs of these services.

For small businesses in particular, there may be a renewed or increased demand in their products and services. While this is good news, especially for those hit hard during the lockdown days of the pandemic, smaller organizations may not have the capacity to respond to this boom in the business.

With all of these challenges, many employers are finding it difficult to find great employees, plus keep the workers who are already on staff. It's now become an ultra-competitive hiring landscape for great talent and will require businesses to execute well-tooled hiring and retention strategies.

Tips To Overcome Challenges in Hiring Employees

While you may certainly feel challenges in hiring at your business right now, there are strategies to address these obstacles. With today's labor shortages and competitive landscape for great talent, the keys to successful hiring center around catering to employee values, providing benefits and incentives, getting smart with your recruiting, and providing positive experiences for new hires and employees alike. Consider the following approaches to improve your hiring and retention efforts.

Offer Incentives

Offering perks or incentives to potential new hires may help with your hiring struggles. This could be a sign-on bonus, a monthly stipend, or even a commitment to a short hiring window to demonstrate to candidates that you value their time, are taking the process seriously, and are ready to commit and get them on board as quickly as possible. Individuals motivated to get back into the job market could see this as particularly attractive, especially if they are interviewing with multiple companies.

Ensure Wages Are Competitive

Now may be the time to take a hard look at the salaries and rates you're offering. Is there room to increase wages to help you gain a competitive edge for great workers? It may also be worthwhile to include salary ranges in your job descriptions. This may be just the information job seekers are looking for — and if they don't find it, they could very well move on to the next job listing.

You should be evaluating wages among your current workforce as well. A recent Paychex survey found that pay is currently the biggest driver for employee retention. In fact, 61% of respondents said that their loyalty to their current employer would increase if they received a pay raise. More specifically, 42% said that a 10-15% salary increase would entice them to stay.

Focus on Staff Retention

As you look to fill vacant positions, don't forget about the workforce you still have. It's clear that maintaining employee engagement amidst an ever-evolving pandemic needs to be a priority, but many businesses have struggled figuring out how to do it. The 2021 Paychex Pulse of HR Survey found that employee engagement has decreased in the last year by more than 50%. This is alarming for many HR leaders, since engagement tends to correlate to an employee's willingness to stay with a company. To meet this challenge, survey respondents said they are implementing tactics such as training and development, administering job satisfaction surveys, offering remote work when possible, and providing financial incentives. These types of approaches could go a long way in helping you keep the great talent you already have.

Additionally, employers' actions and approaches during the pandemic (whether you enacted health and safety standards at work, if you offered remote work options for positions that allowed for it, etc.) send a strong message to potential new hires about the type of employer they might be working for. It's imperative to take care of your staff and demonstrate how you will continue to look out for both current and future employees.

Highlight Your Benefits

If you're experiencing hiring struggles, now is a great time to evaluate your current benefits and highlight particularly attractive offerings that can help you stand out. For instance, if you offer a 401(k) plan with a company match, this is something that could pique job seekers' interests.

Beyond tangible benefits, consider what makes your business unique and stand out from others in your field, whether your mission focuses on contributing to the local business community or the organization has been recognized nationally for exceptional customer service. Job seekers are increasingly looking to align their work with their values and highlighting this information can help candidates envision how their work contributes to a larger goal.

No matter what makes your company unique or attractive, make these value propositions apparent. Include them in job descriptions, career pages, your company social media, and anywhere else a job candidate may find you.

Provide Flexibility

Long-term remote work and flexible schedules are becoming more sought-after by the U.S. workforce than ever. Whether employees simply prefer getting their work done from the comfort of home, staff members need to be able to help children with online schooling, or team members are looking to improve their work/life balance, offering this flexibility has become coveted in such a way that many of the companies that offer this perk have seen it as a key differentiator. Over 70% of respondents in a recent Paychex survey agreed, noting that a focus on hiring remote workers has made their companies more competitive. Given this, it's important that you make it clear to job seekers that remote work options or flexible work setups are available.

Work flexibility is certainly desirable for your current employees, too. In fact, employees who are working in a fully remote environment are significantly less likely than those working in a hybrid environment to be looking for a new job (58% vs. 73%), according to 2021 research from Paychex.

Of course, remote work isn't always possible for certain positions or in certain industries. In these cases, consider ways that you can offer more flexibility to your workers, whether it's a few more sick days, the ability to attend a conference virtually instead of in person, or another option that works for your staff and the business.

Consider Offering Apprenticeships and Training

Managers and HR teams looking for ways to provide value to their employees, improve worker engagement, and build professional skillsets may want to consider the advantages of new-hire training for specific skills and competencies. Training and apprenticeships are great ways to foster growth and development, and ultimately employ an engaged workforce. Depending on your industry or the position, training can take many forms. You can offer an onsite, hands-on approach, or provide online training programs to new employees who can upskill from any location.

A systematic approach to training may also help the business bring employees on board who may not immediately have exact skills but are open and willing to train for a position. While this approach can help ensure your employees obtain the exact skills you're looking for, training and education can demonstrate your willingness to invest in the workforce.

Consider Hiring Recruiting Help

Part of your hiring struggles may involve additional time and resources posting jobs, waiting for quality candidates to find your listings and apply, and arduous interviewing, hiring, and onboarding processes. That's because it takes time, money, and resources to recruit and hire great employees — things that you may not have the luxury of in today's battle for talent. It's possible to cut down on paperwork, shorten the hiring cycle, and provide delightful recruiting and onboarding processes with recruiting and hiring help. Automating certain processes can help your hiring teams stay on track, and HR experts can offer recommendations and support for effective ways to recruit, interview, and onboard new employees.

Conclusion

Many businesses are struggling to not only find great candidates in today's ultra-competitive labor market, but also think strategically about their overall talent strategy to address a worker shortage. However, this presents an opportunity to recognize job candidates' and employees' shifting needs as a result of COVID-19, and respond accordingly as you look to recruit, hire, and retain great workers.

We can help you tackle business challenges like these Contact us today

* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

Recommended for you

About Paychex

Paychex was founded over four decades ago to relieve the complexity of running a business and make our clients' lives easier, so they can focus on what matters most.

We provide: