What’s really going on with the job market? | Ankura

This article was co-authored by David Gilbertson, Vice President, Ultimate Kronos Group (UKG)

What Employees Really Want and How You Can Attract and Retain Them

Coming to our two-year(-ish) pandemic adversary, we’re in a situation where the hiring criteria for all jobs begins and ends with “Will show up for work.” Everywhere, in all sectors, companies are complaining about labor shortages. How is this possible since we have a historically low unemployment rate of 3.6%?

It’s because people are giving up everywhere! In fact, when you look at the data, you can see that this is nothing new. Number of the number of resignations has been increasing every year for 10 years before the pandemic. In 2019, 42 million people left their jobs; and in 2021, 47 million quit (Room 1). Moreover, labor market participation was declining for 20 years before the pandemic. It is down 0.2% from the pre-pandemic low and 1.2% from the pre-pandemic high. What happens is that the demand exceeds the supply of labor due to a demographic problem. (Part 2)

Piece 1

Piece 2

What caused a decline in work participation?

There are a number of factors that have converged to create these circumstances, and it’s not about COVID. Labor force participation had already been declining for 20 years before the pandemic. It is down 0.2% from the pre-pandemic low and 1.2% from the pre-pandemic high. It is a demographic issue related to changes and trends in young adults living with one or more parents; newly retired workers; birth and marriage rates; community engagement; and the opioid crisis.

In 2019, the trend of young adults living with one or more parents was already a reality. In 2020, the percentage of 18-29 year olds increased from 47 to 52 (Part 3). Baby boomer parents have accumulated wealth – with an average net worth of $1.2 million per baby boomer household – meaning their children can live at home and have much more financial flexibility. Also, right now there are 1.8 jobs for every person (almost 2:1), so they can choose whatever job they want. They can quit a bad job at any time and find another, and they don’t have to take a job they hate.

Piece 3

Second, the number of newly retired workers has exceeded the number of new workers. Over the previous 20 years, baby boomers were waiting longer and longer to retire. This came to a complete halt during the pandemic when a majority decided they were going to retire. These people are not coming back.

Piece 4

Additionally, a significant share of women between the ages of 45 and 54 quit their jobs during the pandemic due to difficulties in being able to care for their children and parents. A majority of them have reintegrated into the labor force, but 1.5% are still missing. This is a key group to recruit if your business can find a way to meet its flexibility needs. They are fully trained, experienced, skilled and excellent at managing work-life balance. Attracting them will require putting in place the right workforce strategies to allow them to return to work. (Part 5)

Piece 5

In addition to this, childbirth (Part 7) and marriage rates (part 6) have declined significantly over the past 30 years and church participation has fallen from 70% in 2000 to 47% in 2020, impacting community engagement (Part 8). Additionally, as people become more mobile, community engagement, including engagement with an employer, decreases. As people move away from the community, it is difficult to predict how they will behave.

Marriage rate per 1,000

Piece 6

Birth rate per woman in the United States

Room 7

Church/Synagogue/Mosque Membership Among American Adults: Are You a Member?

Room 8

Adding more pressure to labor market participation, 850,000 working-age men are excluded from the labor market due to opioid use.

Where are we now?

Certain industry segments and regions have been less successful than others in addressing labor shortages. Healthcare and manufacturing have faced significant hurdles to fully recover when it comes to finding and retaining workers. Additionally, the Southeast has been hit harder by COVID-19 and has been slightly slower to recover. On the other hand, large companies have recovered more markedly than small companies.

Room 9 – Source: UKG recovery index

Do employees really change jobs so much?

According to a Microsoft study, 41% of workers said they were looking to change jobs. What’s more, according to CNBC, 43% of people who quit their jobs during the pandemic admit they were actually better off at their old job, and 1 in 5 have already boomeranged back to the company they left in due to poor culture at new. place of employment.

What employees want: it’s not just about the money

In a labor market that has consistently put power in the hands of the employee, the long list of demands continues to grow. They want a lot:

  1. The ability to make a difference on a daily basis
  2. To feel valued
  3. Structured mentorship
  4. Being told “Thank you” when won
  5. Low barriers to employment
  6. Social advantages
  7. Be part of a winning team
  8. Competitive compensation
  9. Support the production of socially responsible brands
  10. Be part of a diverse team
  11. Access to earned wages
  12. Flexible working hours
  13. Alternative changes to classic 8s
  14. The right amount of overtime

And so on….

However, Ankura’s research shows that there are three main features that separate companies with high employee ratings from companies that are not:

  • Ask questions to employees to better understand what they want. Employees lack time with their managers.
  • To listen to them. Really listening. Managers need to get out of their desks more to engage with their employees and listen to what they have to say.
  • Recognize their work by saying “Thank you”. Be authentic. Don’t give a blanket thank you to an entire group; it promotes mediocrity. Say thank you to each employee when they deserve it and indicate what they did for which you thank them; it shows that you care about what they are working on and their input.

Why employers won’t be able to buy their way out

Why is compensation ranked 8th on the list of employee expectations? And why shouldn’t your company make wages its top concern? Employees want other types of compensation (for example, structured mentoring, time off, decision rights, access to training, feeling valued, work-life balance, and childcare). children), not just a living wage. In addition, there is a discrepancy between reality and perception when it comes to salaries:

Piece 10

Changing the culture to make employees feel valued

What is your company’s mission? Does it include the belief that your employees are valuable? Do your employees feel valued?

Only 39% of employees surveyed said “the management team cares about me.” This means that 61% think their managers don’t care about them. Moreover, only 33% of employees believe that management knows how to communicate with them. The remaining 67% don’t believe it. This means that managers don’t know how to talk to their employees. If your business is to recruit and retain employees, your managers need to show they care. This includes not acting as if your leadership is smarter than your employees.

Another caveat to keep in mind: getting a stamp for making the “best places to work” list doesn’t always translate to employee satisfaction. Companies on the list may still have problems recruiting and retaining employees; addressing issues is important, especially since new hires expect more given their placement on the roster. Check out the survey to see where your business failed and focus on those to make improvements.

Think of your mission statement as a guide not only to how you do business, but also how you treat employees. There are a lot of basic things you can do to move the needle when it comes to treating employees better. However, if you think you have no problem, it won’t work. Leaders need to believe that they have to change, not that it’s a good thing to do.

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