At the time of this publication, the current unemployment rate is the lowest it has been in 50 years, at 3.6%. For the past 105 months, the U.S. economy has created jobs. At first take this is excellent news for the workforce and the economy; however, it is also creating challenges with recruiting and retaining top talent. Economic expansion and boosted wages have left employers actively pursuing and, in some cases, competing for talent.
When unemployment is low, jobs are readily available, which means your employees have options. Should they feel any dissatisfaction, there are many other options available and if you want to retain top talent, you need to provide incentives for employees to stay. 401K, healthcare, flexible work schedules and ample vacation time is no longer enough. In the retention game, you need to motivate and challenge your employees.
Rapid Economic Growth
Before we discuss the out-of-box-benefits that companies need to consider, let’s back up and highlight the economic landscape in some major markets around the country. In Seattle, where Colliers has a significant presence, Amazon has dominated the employment landscape, and with this surge in the job market, some steep salary spikes have ensued. This has led to a dramatic increase in rent. The median rent jumped by three times as much as the national figure over the last decade alone. Traffic from urban sprawl, accelerated gentrification of older neighborhoods and increased homelessness have been some negative aspects of the rapid economic growth in Seattle.
Seattle is not the only major city facing this challenge. Many large corporations are finding themselves scrambling in cities such as Washington, D.C., San Francisco and Houston. In Houston, the 2019 graduating class has job opportunities for virtually every major. And while the widespread demand equals more opportunity, job seekers are learning that experience is becoming more important than ever. This, too, can cause a problem, as employers don’t want to attract employees for a short stint only to have them move on to the next best thing. And with most organizations competing for talent, brief job stays no longer holds the negative stigma on a resume that it once did.
The explosive job market in California’s Bay Area is unprecedented — in May 2019, the state added 19,400 jobs, of which 10,300 were in the Bay Area alone. Lack of housing is an issue, but the draw to work at tech giants like Facebook, Google and Apple are not persuading people from relocating. In Washington, D.C., the job market isn’t growing as rapidly as other cities, but it is diversifying. The federal government is not hiring as much as it has in the past, which has created opportunities for non-government companies. With Amazon building its Q2 in Arlington, VA, the D.C. Metro region finds itself struggling to retain employees.
Benefits Outside of the Box
Glassdoor’s 2015 Employment Confidence Survey showed that four out of five people surveyed would choose additional benefits over a pay raise. Much has changed in the past four years, but the fact remains that with rapid expansion in large markets, employees are seeking out-of-the-box benefits. The out-of-the-box benefits include unlimited PTO, lunchtime meal vouchers, salary reimbursement incentives to commute by bicycle, and negotiated discounts on everyday expenses at nearby stores, to name a few.
How do you attract and retain top talent in a challenging market?
- Create a Successful Onboarding Strategy
Onboarding, or integrating an employee to your organization, is akin to making a first impression. If this goes well, you can have a loyal employee for years to come. If it’s not done properly, it could be an irreversible mistake that leads an employee to search for a new job. Onboarding the employee not only with details on their job and duties, but also with the organization’s culture. This transition should be a hands-on experience with all stakeholders showing employees they are and will be valued team members, not just handled by the HR department. According to HR Executive.com, organizations with successful onboarding programs extend the process well beyond the first day, and stretch it over weeks and sometimes months.
- Grow Leaders
Job advancement is important, not only to show that there is upward mobility in the organization, but also because it shows an investment in the individual. By investing in leadership development, talent is empowered, which is repaid many times over. Leadership programs engage employees which in turn prevents boredom. These programs also help unlock your employees full potential.
- Offer Creative Benefits
Not every company can be like Google and offer onsite laundry services, massage chairs or curated lunches crafted by chefs, but you can offer something unique to your organization. Tap into the culture of your company and extract what employees were drawn to. REI is a prime example of a company whose corporate culture is reflected in their employee culture. From their support (both financial and volunteering efforts) of our National Parks System, to their employee ‘parties’ which consist of woodland hikes to pick up debris and clean up, these intangible benefits are appealing. Personalized employee perks are becoming popular — a sort of earned points system that can be redeemed for a variety of benefits. Gym memberships, free or discounted childcare services and free food all rank high on lists of creative benefits.
- Walk the Talk
Once talent is on board, it’s important to retain. Instilling organizational loyalty by means of delivering what is promised cannot be understated. Developing cultural loyalty is how Dell remains at the top of their retention game. By knowing what truly matters to its people, Dell is consciously shaping its culture and leadership in ways that engage people and give them reasons to stay aboard. If social responsibility is important to your company, creating ample opportunities for employees to be involved furthers pride and loyalty.
Whether you’re looking to attract new talent, or retain high-performing employees, a challenging market can help amp up your internal and external recruiting efforts. By providing valuable perks and innovative benefits, your organizational culture will reflect the value placed on employees, which will continue to attract top talent regardless of the job market.
About the Author:
Tory Glossip is a Managing Director of Colliers Real Estate Management Services in Seattle. She runs a team of dedicated, expert management professionals and believes that good talent comes from those who have a genuine interest in improving their management skills and a thirst for evolving and improving their performance.