A recent U.S. federal government shutdown. Global political uncertainty. Anxiety about the future of an economy defined by AI and automation. With so much changing so fast, today's business leaders have a lot on their minds. To find out exactly what they're thinking about regarding the year ahead, Randstad Office and Administration surveyed select clients in Q4 2018.
The answers we got might surprise you. Here's the big picture:
Companies are by and large optimistic about the future. They foresee growth in the months ahead.
Companies are eager to hire — but they’re finding that highly skilled talent today is increasingly hard to come by.
As a result, companies recognize the importance of standing out from their competitors. Yet many are focusing their improvement efforts on areas that may not move the needle with candidates.
Now that you've got the high-level view, let's dig into our findings in a bit more detail.
hiring is the biggest obstacle to growth
Nearly all respondents (94%) expressed moderate to high confidence about the overall business forecast for growth. Not surprisingly, a full three quarters of businesses indicated they planned to increase hiring in 2019.
That's good news, but challenges still remain. Distinct obstacles must be overcome if companies are to achieve their talent-related goals. And our survey found that to be true across the board, internally as well as externally.
Here's what our clients cited as their biggest internal challenges in 2019:
Externally, it’s a similar story. Our clients believe their biggest external challenges in 2019 to be:
It appears that a constellation of talent-related concerns, most of which fall within the traditional wheelhouse of HR, are common to leading companies today. And to address them, best-in-class companies today are getting proactive. Last year, for example, Boeing decided to invest $100 million in upskilling, training and other workforce initiatives at sites across the country. Most of the money for those initiatives, notably, came from projected tax savings related to federal tax reform.
Meanwhile, companies like BNSF Railway and Union Pacific Corp. are taking on the tight labor market by offering huge financial incentives — to the tune of $25,000, in some cases. As both of these examples make clear, some level of financial investment is quickly becoming table stakes for companies that want to get ahead of today's most pressing internal and external talent challenges.
moving the needle on hiring, engagement and retention
Given the fact that companies face challenges related to hiring, engagement and retention, businesses are looking for ways to differentiate themselves from the competition. We drilled down into some of these pain-points to unearth possible solutions.
What's compelling talent to leave today? More than anything else, three factors are motivating employees to seek opportunities elsewhere:
So we were surprised to learn that the largest percentage of companies in our survey — a full 25 percent — plan to improve their benefits and perks packages in order to bolster retention.
That's a truly surprising, and potentially very costly, misalignment. Benefits can be a deciding factor for candidates, but to increase retention, companies would be better served by zeroing in on the reasons employees are leaving in the first place. Offering on-site yoga or ping pong tables is a plus, of course, but it's unlikely to repair any of the three issues identified above. This is especially true for younger workers: Millennials are the largest generation in the U.S. labor force today, and studies show that perks and benefits aren't what matter most to them when they evaluate potential employers. Clearly, this is one area where companies should rethink how they're approaching hiring and retention.
the cost of a bad hire isn't always monetary
Everyone knows that a bad hire comes with high financial costs: on average, 21 percent of the departing employee's salary in simple dollars and cents. No surprise, then, that the largest percentage (37%) of our clients cited financial outlays as the number-one negative consequence of making a bad hire.
But there are other costs, too, and many of them are hard to quantify. To get some insights — and to help pin a number on those pain-points — we asked our clients: Beyond the immediate financial outlay, what do you view as the biggest negative consequences associated with bad hiring decisions?
To help avoid painful outcomes like these, and to more effectively retain valuable talent, where should companies look to make improvements?
Onboarding processes might be a good place to start — that's an area where many organizations right now are struggling. For example, only 12 percent of employees rate their employers’ onboarding processes as "great." And once onboarding goes awry, challenges tend to rapidly multiply. Just consider the fact that new hires who have negative onboarding experiences are twice as likely to start hunting for new opportunities in the near future, and one in five won't recommend your company to friends or family members. Down the line, you can imagine how much damage that might do to your talent pipeline.
conclusion and key takeaways
If there's a silver lining to our survey results, it may be the fact that companies are apparently hesitant to throw hiring managers under the bus in the face of a single negative hiring outcome. And that's as it should be — after all, in most cases there are multiple stakeholders, not just hiring managers, involved in hiring decisions.
But the big-picture takeaway is that employers are primed for growth, yet also acknowledge that there are considerable challenges lying in wait. Overcoming these challenges won't be easy — and the going is only going to get harder if you try to go it alone. That's where Randstad Office and Administration comes in.
We take a high-tech, high-touch approach to recruitment. We'll help you avoid the painful costs associated with bad hires and solve today's most complex workforce challenges. If you're looking to improve key business outcomes, we have specialized expertise in nearly every field, and our local consultants can deliver customized talent solutions tailored to your market and competitive landscape.
Get in touch with us today to learn how.