The Baby Boomer generation, the largest group in our workforce, is retiring in droves, taking with them decades of senior-level experience and knowledge across every industry. Alongside them, more of the people inheriting their 30-70 trillion dollars in wealth are also retiring early. Behind them, fewer immigrants are entering the workforce at all levels and hourly workers are moving to the gig economy, further reducing the number of W-2 workers in the U.S. All of this has created a tight labor market in which companies have to pay employees more money in order to attract and retain them. Those expenses eventually get passed on to customers.
According to Tim Schumm, President of Lucas James Talent Partners, these trends have led to massive inflation and rising interest rates from the Federal Reserve. Add to that the global supply chain instability and widespread CEO uncertainty in the economy and you have all the makings of a recession.
The good news and the bad news is that no one tactic will solve your talent acquisition woes. That’s good for companies who can’t compete when it comes to salary increases. Schumm recommends taking a holistic approach, investing in your talent brand and of course, focusing on treating employees better. Based on industry research, it takes three times longer for a company with an average Glassdoor review under 3.5 stars to fill a role than it does for companies with average reviews of 4.0 or higher. Reviews matter.
The lack of a single talent acquisition silver bullet is also bad news for companies that aren’t equipped to strengthen their employer brand. For many manufacturers and distributors, in particular, even raising hourly wages for entry-level employees to $18 per hour hasn’t produced enough viable candidates to fill necessary positions.
So, what should you do–invest in the future, confident in a rebuild–or tighten your belt so your company makes it to the other side?
- Now is the time for leaders to lock arms and build trust with transparency and confidence in a long-term plan.
- Job seekers are acting more like consumers by researching companies before and during the hiring process. Make sure your employer brand is modern and compelling.
- Unemployment may remain low and the labor market may be tight for the foreseeable future, but a recession won’t last forever. Focus on acquisition and retention strategies now and make sure you’re ready when the economy rebounds.