July was a great month for job growth, though it was far from a foregone conclusion. Economists predicted just 250,000 jobs would be added in July — that would have been the lowest number since December 2020, when employers cut jobs in response to upticks in COVID-19 cases. Fortunately, the economy prevailed, adding more than double the amount. When July was all said and done, employers created an impressive 528,000 jobs, while the unemployment rate decreased to 3.5 percent.
While the Great Resignation continues to cool, job seekers remain in the driver's seat for the time being. According to our own internal data, that's most true in sectors like tech, manufacturing and logistics, and office and administration where job seeker applications are also on the rise.
That's encouraging from a hiring activity standpoint. However, with over 500,000 jobs being added to a job market already saturated with opportunities and a declining, but still-high quits rate, employers will have to work hard to attract and retain talent. Here's what to do.
focus on flexibility and career development
While employers raised wages to start the year, inflation has started to negate gains for job seekers, meaning new strategies will need to be employed in order to attract and retain talent.
Flexibility has been on the rise since the start of the pandemic, but surveys show that employers still have room to continue providing this important benefit. Just 26 percent of employees said they saw an increase in flexibility in terms of working hours over the past 12 months. Considering that a full 83 percent of employees believe flexibility in working hours is important, employers can help their cause by providing it at a greater scale.
Career development and training are also important talent retention levers employers can pull in a climate where wage increases may no longer be sufficient. Seventy-five percent of U.S. workers said employer-provided reskilling and upskilling opportunities were very important to them. For sectors with severe skills gaps like manufacturing and logistics, providing existing workers with opportunities to upskill unlocks pathways to advancement, while allowing employers to ensure key roles are always filled. Additionally survey findings uncovered other areas employers should consider in order to deliver on new job seeker expectations around career development:
- Career coaching: Half of all employees said they'd like to speak to a career coach, with the top topics being how to increase pay, find a better work-life balance and advance their career with their current employers.
- Well-rounded training: Hard-skill development is important, especially for manufacturing and logistics roles,, but well-rounded training should not be overlooked: Forty-six percent of employees told us that soft-skill development was a top priority.
- Sustainability takes center stage: Many employees want to work for companies that share their values, and that's reflected in the kind of training they desire, too. Twenty-four percent of employees, for instance, placed sustainability training in their top three priorities.
The rise of remote and hybrid work has created training challenges for employers, and it's important to ensure that your off-site teams have access to training and development opportunities too. Organizations should clearly define and articulate KPIs for both on- and off-site trainees in addition to setting clear and equal milestones to ensure everyone has the opportunity to succeed.
younger workers: a new retention risk
While retention should be a workforce-wide initiative, data has shown that younger workers present a particularly high attrition risk for employers. Our Workmonitor 2022 report found that younger workers were more likely to leave their jobs than older employees, and employers have been acting fast to prevent them from leaving.
- Forty-one percent of younger workers got a pay raise in the past year, compared to just 28 percent of those over 55.
- Forty percent received new training or development opportunities, compared to 13 percent of older workers.
- Thirty-six percent saw enhanced benefits (annual leave allocation, healthcare, pension, etc.) compared with just nine percent of the oldest age group.
As employers continue to provide benefits like these, extra care must be taken to monitor this key workforce cohort to prevent turnover from getting out of hand.
the bottom line
The hiring market is strong, with job growth more than doubling the initially grim forecasts. Hiring activity is heating up as job seekers start throwing their hats in the ring to seize new opportunities. However, with so many opportunities being created, employers must pay special attention to retention to keep their workforces intact.
Providing flexibility and career development opportunities to workers are two ways to do that, especially for those most at risk of leaving, like younger workers.
For more actionable retention tips and insights you can use this month, visit Randstad's Business Insights page.