Talent remains in short supply, but that hasn't stopped employers from adding a significant amount of new jobs in April. With wages continuing to rise, keeping compensation levels competitive will be key — but pay alone won't be enough to attract and retain talent in the current climate.
Here, we'll dive into the latest labor market indicators and share insight into which new worker preferences you should address to find and keep the people your business needs.
jobs and wages continue to increase
The economy added 428,000 jobs in April, while the unemployment rate remained unchanged at 3.6 percent. Despite the economy having successfully added back nearly 95 percent of the 22 millions jobs lost during the pandemic, current availability of talent hasn't been able to keep up with new job openings.
To date, there are still 1.9 job openings for every unemployed person, which, when coupled with high inflation, has forced employers to raise salaries in order to attract talent. Compensation for American workers grew in the first quarter of 2022, with employers spending 4.5 percent more on worker costs than in Q1 of 2021, marking the fastest increase in compensation since 2001.
Our own internal data told a similar story as well. As of mid-April, wages were up from pre-pandemic levels in industries like:
- wholesale trade (+28.3%)
- transportation and warehousing (+25.5%)
- business services (+17.9%)
- security and commodity brokers (+16.6%)
- health services (+15.1%)
- depository institutions (+8.4%)
With such pronounced increases, it's no wonder that questions about competitive compensation are currently the ones we're fielding most right now from clients. Consulting a reputable salary guide can help ensure your pay rates remain competitive, even as wages continue to skyrocket. At some point, however, salary increases will reach a breaking point. That's why we're advising employers to start adopting alternative talent attraction strategies now for more sustainable success going forward.
address new job seeker preferences
There's daylight in the details for employers willing to take a more tailored approach to talent attraction and retention.
Our Workmonitor 2022 report revealed current preferences of today's job seekers. The main takeaway? One third of all employee respondents told us they would rather be unemployed than unhappy at work. So if you're looking to hire new employees, you'll want to make sure you're providing the benefits, incentives and working environments they're looking for.
flexibility at work
Flexibility in terms of working hours is important for 83 percent of all respondents, and almost three-quarters (71%) of workers think that flexibility in terms of location is important as well. For industries where it's feasible, that could mean providing remote or hybrid working arrangements. For others, like manufacturing, giving employees more control over shift selection and experimenting with flex shifts and shorter work weeks are competitive alternatives.
Fifty percent of respondents under the age of 35 said that they would quit their job if it prevented them from enjoying their life, with nearly the same amount (58%) saying it would also lead them to reject a new job offer. Whether you're looking to hire or retain talent, supporting employee work-life balance is critical to maintaining a healthy workforce. Remote and hybrid work, childcare and mental-health support can help achieve this, along with smaller gestures like restricting communications to set working hours and providing quality of life perks like summer Fridays, onsite gyms and dry cleaning.
diversity and inclusion
Forty-one percent of American workers wouldn't accept a job if the organization wasn’t making a proactive effort to improve diversity and inclusion. Examine your organization's hiring and promotion practices to identify areas where you're currently falling short, and take swift steps to address them to create a more equitable and diverse working environment.
the bottom line
The economy continues to add jobs, but workers remain frustratingly out of reach. Keeping up with rising wages is a wise first line of defense, but employers should be wary about putting all their eggs in one basket.
Addressing current worker preferences around flexibility, work-life balance and diversity and inclusion can help you attract and retain talent even when you may not have the edge when it comes to salary.
For more hiring and retention tips you can use, visit the Randstad Business Insights page.