The hiring market is changing more and faster than ever before, so employers should continue to expect greater disruption in the year ahead. Automation and artificial intelligence are changing — and even eliminating — roles in almost every industry. They're also affecting how recruiters find and hire talent. Meanwhile, the growing "gig economy" is leading more and more employers to adopt agile workforces, but not without significant growing pains. Still, the biggest challenge employers will face in the year ahead is simply finding enough qualified candidates to fill open roles.
The national unemployment rate hovered around four percent throughout 2018, the lowest it’s been in over a decade. This means in 2019 talent will become even more scarce, making it harder for employers to find and hire qualified candidates quickly. In fact, in June of 2018, the U.S. had more open roles than it had unemployed people. That's never happened before, and the need for skilled workers hasn't diminished since. We're seeing more and more employers struggling to find the talent they need across the board, in every industry and in every market.
With so many open roles available, employees have more options than ever before. Therefore, retention is a key priority for businesses, but how companies approach the problem varies greatly — as do the outcomes. Furthermore, businesses with long or complicated hiring processes are at risk of losing top talent to organizations capable of making an offer faster.
the compensation conundrum
Given the challenges companies are facing in today’s challenging hiring landscape, businesses need to use every tool at their disposal, including compensation and benefits. Some businesses are scrambling to showcase "fun" office perks like free snacks to attract talent. But, as it turns out, millennials — who are expected to make up 75 percent of the workforce by 2025 — aren't really that interested in perks like these, after all. In one survey, 80 percent of millennial respondents said that those incentives are actually the least important factor when selecting an employer. So the question remains — what is the most important?
According to our research, the answer's simple: compensation and benefits.
That goes for millennials, boomers, Gen X and every other generation and gender. Some 66 percent of workers agree that a strong benefits and perks package is the most important factor when considering a job offer. The overwhelming majority of employees (82%) expect pay raises every year in order for them to stay at their current companies. Meanwhile, more than 50 percent would leave their current employers if they only received raises designed to keep pace with inflation.
Additionally, Randstad's research recently found that, when asked about the parts of a new job that excite them the most, 46 percent of respondents said "higher salary/better benefits," while 36 percent said "becoming more financially stable." Furthermore, more than a fifth of Americans turn down more job offers today than they did five years ago. And the primary reason they're declining these offers?
The pay is simply too low.
With so much at stake, it's clear that simply aligning your compensation with the overall market isn't enough to attract and retain the best talent. Knowing the standard compensation packages in your industry and then tailoring your pay and benefits packages to exceed them will be critical.
wrong hires and wasted work
With all the focus on finding qualified talent, it can be easy to overlook the need to go beyond the resume and investigate a candidate's cultural fit. But in today's ultra-competitive talent market, you can't afford to make a hire that doesn't work well with your team and overall organization.
That's because replacing a bad hire means spending more money and time on recruiting, hiring, onboarding and training. Meanwhile, your team will have to shoulder the burden of the poor hire's workload while you scramble to find a replacement, and those added hours and late nights often lead to burnout and disengagement — both of which can result in additional turnover. That will likely leave you critically understaffed, which will, in turn, lead to even more attrition. In fact, our research found that 46 percent of employees not only say that their teams are understaffed, but that this is a factor motivating them to seek opportunities elsewhere.
Once you've actually found the right mix of skills and cultural fit, then you've got to retain them. Yet that, too, is harder than ever. One proven avenue for retention is providing a clear path to advancement and growth. However, our research found that more than half of all employees believe they'll have to leave their current companies in order to advance to the next level. Roughly the same number said their companies don't offer opportunities for growth. This means many employers are risking their greatest asset — their existing workforce — by failing to prioritize professional development.
employees may become less connected, but happier and more productive
Today's technology has already made it easy for workers to stay connected 24/7 and to work from home or on the road. In fact, some 43 percent of U.S. workers spend time working outside the office. That's nothing new — but what is new is that more and more organizations are coming to realize that the "always on" and "wherever, whenever" mentality isn't providing a boost to productivity. As Jim Link, Randstad's Chief Human Resources Officer noted, our hyper-connectedness actually makes today's workers focus too much on short-term goals and distracts from long-term thinking. Link pointed out that today's leaders should focus on "decompression," allowing workers to "take a step back from the pressures and distractions of always-on communications and digital technology."
Randstad's research has also uncovered that, while 82 percent of employees say that remote work is a desirable option when needed, 62 percent actually prefer to work in a traditional office setting, as opposed to working from home. Meanwhile, some 65 percent of respondents aged 18-24 said they prefer the office over remote work, which seems to run counter to the widely held belief that remote work is a must-have perk for attracting millennials and Gen Z.
All told, in 2019, we may begin to see workers spending less time working remotely and beginning to step back from the always-on mentality — and that may just make them happier, more engaged and even more productive.
more training will lead to greater retention
As the pace of technological advancement increases, today's workers are faced with the need to continually learn new skills. Rather than seeing this as a burden, Randstad's research found that 90 percent of employees actively want to learn new digital skills in order to further their careers. Unfortunately, a third of workers said their employers don't offer them the ability to learn new skills. A further 58 percent said their employers have invested in the latest tools but haven't provided adequate training. It's little wonder that 40 percent of respondents said they've left a job because they didn’t have access to the latest digital tools, and 58 percent said they needed to find new jobs in order to gain new skills.
For business leaders, the imperative should be clear: provide opportunities for employees to learn new skills, or be prepared to lose your top performers to companies that do. By empowering your team with new digital skills, you won't just increase retention and engagement — you'll also gain a workforce with valuable new skills that will help carry your business into the future.
2019 at a glance
As the economy and hiring landscape changes and hiring becomes harder than ever, here are the numbers that should be top of mind in 2019.
how to stay competitive in 2019
There's a lot at stake for employers in the year ahead. With so much opportunity for job seekers, so many recruiters trying to lure employees away from their current roles and so few companies taking an active approach to retaining talent, 2019 promises to be a difficult year — at least if you decide to go it alone. If that's the case, we put together some helpful resources to guide you along the way.
If you decide not to go it alone and partner with the experts at Randstad, you'll get trusted, timely help needed to grow and retain your workforces. Across all industries we serve, our local, specialized recruiters have the tools, insight and expertise you need to make the right hire every time.
If what you just read resonates with you and aligns with your business’s goals and challenges, get in touch with Randstad today. We’re here to help.