Future of Work News

Labor Shortage Challenges Operational Stability, Workers Want More

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The COVID-19 pandemic not only shook the world medically but also economically as well. One of the lasting aftereffects is a continued labor shortage across many industries – a combination of business closures, staffing reductions, and the Great Resignation. Its effects are seen by the public eye. Fast food restaurants are not “fast” anymore because of the burden placed on a smaller team of workers, and retail stores may only have one cash register open because the staffing resources simply aren’t available to reduce wait times by opening more.

Even today, as much of the world feels it is truly and finally coming out of the pandemic, companies of all sizes and across business sectors feel the impacts of the staffing shortage as they struggle to attract and retain talent. In fact, nearly three-fourths of American businesses have been/are affected, according to Provident Bank’s 2022 National Labor/Staffing Shortage Survey.

One of the biggest effects for many companies has been cutting back operating hours, which inherently reduces revenue potential.  Others have been unable to fill crucial roles in the wake of high employee turnover rates. These factors add additional stressors to their operations, beyond the normal course of running a business.

That raises the question as to why employees continue to leave even in a post-pandemic world. Well, as times changed, so did employee demands. Employees leave their jobs because of low salaries, the inability to work remotely, non-competitive benefits, childcare issues and burnout, just to name a few of the most prevalent reasons.

Some companies are adjusting their models, recognizing that change is necessary. More than a third of companies have revised their perks and/or benefits to retain employees and/or attract talent. The most common additions included tuition assistance, enhanced paid time off and childcare reimbursement. More popular added benefits included additional paid sick and holiday leave, 401k matching and sign-on bonuses.

Even with the sign-on bonuses to help attract new talent, 69% of businesses have had candidates decline opportunities because of better offers. As a result, a majority of that group had to raise salary offerings by up to 20% just to stay competitive.

Looking at these stats alone prove that employees have more control over their job situations than ever. That’s not a bad thing. Employees should be more proactive and be able to enjoy the benefits they seek. They may be wellness stipends, casual dress code, extended maternity/paternity leave, remote/hybrid work, or others.  Regardless of the specific perks and benefits, companies that listen to their employees needs and focus more on the employee experience do see improvements.

“Organizations that are placing the employee experience at the center of their business strategy are benefitting from improved retention rates and the ability to attract talent during the current job market,” said Anthony Labozzetta, president and CEO, Provident Bank.
 




Edited by Erik Linask

Future of Work Contributor

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