Insights > Labor Disruption: Approaches to Attract and Keep Workers

Labor Disruption: Approaches to Attract and Keep Workers

Amid the shortage of workers across various industries in the United States, companies are currently seeking ways to address labor constraints. Contributing factors for worker shortages include everything from ongoing pandemic-related concerns, working-age population decline (exacerbated by reduced immigration), and several shifts in workers’ priorities regarding wages, job fulfillment, flexibility expectations, or family and childcare needs. For companies, it is unclear whether labor constraints are a transitory or long-term issue. One thing is clear: the battle for labor is intense, with some sectors hit hardest, such as manufacturing, retail, restaurant, and hospitality. In response, many companies are looking to identify competitive advantages to supplement pay but might lack viable options to raise wages or match the wage levels expected by today’s workforce. Despite the possible causes or extent of the current labor crisis, business executives and leaders need actionable guidance to keep businesses moving forward.

Solutions to attract and retain employees may differ depending on company size. Larger organizations such as Amazon or Chipotle have enacted cash-intensive solutions such as providing $3,000 sign-on bonuses or increasing hourly wages to $15/hour, and the success of such methods will be revealed over time.  However, small and middle-market companies may lack the financial abilities to implement similar solutions and must get creative in their strategies. Helpful approaches can include aligning company culture to modern workforce needs, reshaping the role played by human resources, and enabling operational improvements through refined processes or technologies.

For businesses facing worker shortages, leveraging outside expertise with fresh, industry-leading perspectives can help drive operational impact.

Realigning workplaces for today’s workers

These days, a good manufacturing or warehouse worker is like gold. Even when companies continually raise wages to remain competitive, retaining good workers can be particularly challenging as a large portion of the workforce continues to approach retirement and many younger workers desire alignment to the culture and values of a workplace.

To enhance the employee experience and help counter perceptions that a given workplace represents an outdated or undesirable place to work, companies can provide increased safety measures and training. For example, a company could communicate before-and-after information regarding safety improvement areas along with the new safety ratings. Companies may also holistically expand training initiatives by offering seminars on personal finance or other personal and professional development options, or by encouraging online and social media engagement campaigns centered on a meaningful, company-approved topic. Building stronger relationships within teams or departments with friendly competitions with smaller incentives such as gift cards, lunches, or team outings can also help shape positive company culture and feelings of recognition among workers.

Strengthening the workforce experience via feedback and modernization

Understanding what is currently working well within the workforce and listening to opportunities for improvement are also ways to drive better workplace culture—which can help attract and retain workers. Recently, many companies have adopted financial and non-financial incentives to attract and retain their workforce, using measures such as increased wages and performance incentives, and offering bonuses for various referral or retention outcomes. More creative measures have included allowing bringing pets to work or on the road, changes in scheduling including more days off, and companies closing their operations for rest days. These are short-term actions, but organizations should ask: when was the last time the company conducted an employee engagement survey? What were the results of the last survey, and what actions were taken? To remain competitive and allow effective recruitment and retention, all companies need to drive a positive culture informed by workers’ feedback.

There are several ways that companies can show good faith to workers and demonstrate serious commitments to continuous improvement and optimizing the way work gets done. Process and technology improvements can be made to further streamline and simplify operations, reduce manual tasks, and ensure data accuracy. These improvements can help attract and retain workers by eliminating the need for undesirable, repetitive work, and technologies can also enable and enhance back-office support functions in gathering feedback and implementing related operational improvements to the workplace.

Evolving the role of human resources and accelerating its impact

Workforce-related disruption has revealed some necessary and helpful opportunities for companies to positively grow and change their approaches to operations. As the pandemic has caused fears, uncertainty, and despair, two patterns have emerged: 1) human resources (HR) functions became central in addressing workplace disruption and helping to assure operational continuity, and 2) organizations adopted a greater emphasis on the human element of workers, increasing their focus on workforce health and wellbeing.

If HR leaders did not play a major role at a company prior to the pandemic, companies certainly need to elevate the HR function now. The pandemic has underscored the ‘human’ part of human capital as companies today must address top concerns such as fear, safety, mental and physical wellbeing, and flexibility to adapt to personal circumstances. HR must contend with these very human issues—both to help businesses “keep the lights on” and ensure forward-thinking continuity of operations.

In many cases, HR functions have redirected efforts to approach worker concerns on individual levels in order to prove that employees’ voices matter—a retention mantra and key message throughout the pandemic. Pivoting to more closely manage the human side of human capital may also strain HR organizations tasked with processing activities that must continue uninhibited.

When HR departments redirect to elevate employee voices, companies with more digitally mature HR organizations can minimize disruptions to normal operations (such as hiring and paying employees or managing attrition). To enable HR to focus primarily on strategic, high-value initiatives, companies can employ automation, integration, and streamlined processes. By modernizing the organization, HR can more quickly pivot necessary resources to proactively evaluate and address employee needs, which will ultimately enhance company culture and retention.

HR professionals—whose efforts are more critical than ever in the wake of recent disruption—require a heightened focus on hiring, retention, and employee engagement, and companies’ competitive advantage goes beyond the pay given to employees. HR leaders shape decisions about benefits that can go a long way in attracting and retaining talent, including intangible benefits such as corporate culture and flexible schedules or workdays, and tangible benefits such as childcare offerings or stipends, training, and professional development.

There is not a one-size-fits-all solution for these very real workplace and workforce concerns. Where feasible, many companies have responded to labor gaps by looking internally and cross-training or up-skilling workers to cover unfilled job duties. Workforce analysis to solve competency gaps is exponentially easier when the data is readily available to help support these types of conversations internally. Companies will be best positioned for success when armed with robust HR-data tracking, including job and position requirements and headcount planning, and worker data such as skills, work history, and job interests. For organizations that do not have adequate systems and processes in place, this exercise is painfully daunting. Accurate, quality data enables real-time views of the workforce to be able to react to the changing human needs as companies continue to navigate the pandemic and related challenges. For businesses facing worker shortages, leveraging outside expertise with fresh, industry-leading perspectives can help drive operational impact. Outside guidance can also shape valuable strategies and tactics for companies lacking the in-house capabilities to navigate labor constraints.

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