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The Search for America’s Missing Workers

Help Wanted! Immediate Openings! Signing Bonuses! All Shifts Available! The signs are everywhere; signs of what economists are calling “the Great Resignation”, or alternatively, “the Great Reconsideration.” What it comes down to is that, post COVID, there are over ten million unfilled jobs, and there is now a concern that these unfilled jobs could negatively impact the coming holiday season and even threaten our country’s economic recovery.

In August of 2021 the Bureau of Labor Statistics (BLS) reported that over 4.3 million American workers resigned from their jobs, a monthly number higher than ever previously recorded. But this was only a continuation of a trend seen over the past 18 months. Through September of 2021, almost 30 million workers have resigned their positions this year alone, close to a 30% annualized turnover of our entire workforce.

There seems to be no business or industry that has avoided the impacts of these resignations. Our many ports of entry are clogged with literally hundreds of container ships waiting to be unloaded at docks that are bursting at the seams with undelivered goods due to a critical shortage of dock workers and truck drivers to move the goods from the ports to retailers and wholesalers.

Retailers have tried to adjust, but partially empty shelves and long lines at fewer open check stands clearly show that their efforts are still not enough. The upcoming holiday season has been predicted as one of the best ever with a projected 9% sales gain, and retailers large and small have told the Bureau of Labor Statistics (BLS) that they plan to hire as many as 700,000 additional seasonal associates. The critical question is…will they be able to find them?

empty store shelves

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Many political pundits and others have pointed towards COVID related government assistance efforts as the reason for the unfilled openings. It is certainly a reason, as JP Morgan reported that the bottom quartile of earners has seen bank balances increase by almost 70% (but still average only about $1,000), but it is not the only reason.

According to the BLS, Professionals from ages 30 to 45 have had the largest increase in turnover (over a 20% increase), while those ages 20 to 25 and 60 to 70+ have actually had decreased resignation percentages. Surveys of those mid-career professionals leaving their positions cite several reasons for their decisions. These include a desire to maintain the remote work options they experienced during the COVID shutdowns, options that some employers have now eliminated. Other reasons stated were pent up job frustration and “burn out” due to high workloads. Women in the retail workforce have been especially impacted due to increasing family pressures caused by reduced school schedules, and a lack of, or increasing costs of childcare.

Healthcare has been the among the hardest hit industries, with front-line medical professionals, especially nurses, “burned out” by literally 18 to 24 months of combatting the epidemic. Over 60% of hospitals report severe nursing shortages, which have resulted in some hospitals cutting back elective surgeries or even closing entire departments (i.e., maternity). Others have attempted to address the shortages by hiring “traveling nurses” at wages up to $100 per hour combined with signing bonuses of $10,000 or more. These efforts have in some cases exacerbated the problem as dedicated medical personnel who have remained on the job without increases have resigned for better opportunities, after working side-by-side with poorly oriented “temporary” personnel earning vastly higher payrates.

So, what can companies do to address, and hopefully minimize the negative impacts of “the great resignation”?

We lay out 10 considerations for your HR strategy below:

  1. First of all, recognize that this is not just a temporary issue. There has always been a “War for Talent”, but what we are now facing is a “Revolution of Expectations.”  Companies need to take a close look at everything they do that impacts their associates.  This is not just wages and benefits, you need to review working conditions, company policies/procedures, and especially how your managers, from front-line to boardroom approach and address their associates.  It has often been said, “people don’t just leave companies, they mostly leave bad bosses.”
  2. Quantify and identify the key issues. Does your company do exit interviews?  If you don’t, you should, especially if you have a turnover problem.  These interviews have to be “personalized,” an on-line exit survey does not do the job.  My past experience with exit interviews has uncovered issues including; bad bosses, pay inequities, toxic work environments, poorly communicated (and designed) company policies, and a myriad number of issues that often could be easily addressed.  If you do the interviews, go one step farther…be prepared to make the necessary changes.
  3. Make sure everyone understands the costs. Turnover and empty positions have costs…often large costs.  Do your executives fully understand and recognize these costs?  Do they realize that in order to reduce these costs they might have to make investments in their talent?  The top performing companies have “done the math” and are saving money by investing in their workforces with additional training, special recognition programs, and other benefits.
  4. Realize that your best workforce is the one you have today. Companies need to “re-recruit” their workers every single day.  It is far too late to react once an associate offers their resignation.  At that point anything you do is “too little, too late” and often reinforces the associate’s decision to leave.  If you have a quality employee, do what you can to let them know you recognize and appreciate their efforts.  Managers have a lot of leeway when it comes to non-tangible rewards, so be generous.  In addition, be prepared to do battle for your best employees.  The efforts you make will pay significant dividends.
  5. Always be recruiting! As a retail HR professional, I was constantly on the lookout for talent. Did I get good service at a restaurant?  I passed out a card.  Met a promising individual at a college job fair?  I followed up with emails and even phone calls.  Impressed with someone I met socially?  I inquired about their career goals and aspirations.  Get your team doing the same.  Many of my best hires came when I wasn’t looking for them.
  6. Understand the “new” workforce. Many companies are utilizing temporary or “gig” workers and leveraging the reach of on-line recruiting platforms such as  Amazon now hires out “quick-ship” opportunities for small items to Uber and Lyft drivers to supplement their rideshare income.
  7. Recognize that work has changed, it is no longer 1950 (or even 1990). Can you allow professional associates the option of remote work?  If so, you should explore ways to make it happen.  You might be surprised at how far a little compromise will go when it comes to retaining quality help.  Examine your processes and procedures to remove or revise items that are outdated.
  8. Use technology to improve the associate work experience. Does your organization have an efficient and effective scheduling tool that allows associates to easily trade or pick up available shifts?  Do you have robust internal communication tools that keep associates informed of ongoing changes?  These types of tools improve associate connection, satisfaction, and retention.
  9. Review and be prepared to address any policy and procedure that is negatively impacting your people. Ongoing Associate Engagement surveys can often provide direction towards the issues that matter to your associates.  Again, be prepared to make changes based on the results.  Portillo’s, the Chicago fast-casual dining company, recently rolled out “Daily Pay” providing their associates the opportunity to access their pay on a daily basis to help make ends meet.  This was only a small part of an extensive associate-facing cultural transformation as they look to expand operations nation-wide.
  10. Finally, understand that many associates are looking for more than just a paycheck and benefits. Many, especially those younger Gen Z and Millennial workers are seeking companies with social purpose and direction.  If you have a mission, put it out there for everyone to see and support.  If your mission is unstated or something akin to “Sell something and make money”, it might be time to rethink the reasons your company exists and what your mission, vision, and values are saying to your team.

The bottom line is that worker turnover should be a major concern for every company.  It will affect your sales, your bottom line, your company reputation, and ultimately your company’s successful survival.  It is an issue that should not be just delegated to your HR department.  It should be a central concern to every member of your management team.  If you make reducing associate turnover one of your major priorities, your organization will have a much better chance of weathering the difficult years ahead.

McMillanDoolittle can help with all aspects of your team – we have a proprietary talent development framework that aligns organization and culture with strategy to build a world-class experience for your people and results in a world-class experience for your customers.  Please reach out to us to set up a call to discuss how we can assist your organization in resolving its most difficult problems.

Gary Duncan

Gary has over 40 years of experience as a Human Resources Executive in the retail and supply chain functions of major unionized and non-union employers. His experience enables him to combine his Human Resources knowledge with a strong understanding of the operational requirements for employers and clients.

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