Although most unemployment benefits instituted by the 2020 CARES act have expired, employers are still struggling to attract and retain talent – or simply get applicants in the candidate pool. The reality is, we are in the midst of an employees’ rather than an employers’ job market.
This is a global labor shortage. One recent survey found most people (76%) in the United States and several other large economies – including China, the U.K., Brazil, India, Germany and Japan – have higher expectations for a prospective employer now than they did three years ago.
All workers, want competitive pay, health insurance, paid-time-off (even unlimited PTO) and many more traditional benefits. Increasingly, however, employees and applicants want their employer to provide more, and companies are going to great lengths to meet employee expectations to fill their open headcounts in this competitive market for talent.
Let’s review some of the reasons behind the labor shortage and what creative actions companies are taking to retain staff while trying to entice new employees to come on board.
In search of more than just a job
The U.S. Bureau of Labor Statistics reports 4 million Americans quit their jobs in July 2021. Resignations, which peaked in April, have remained higher than normal for several months, with a record-breaking 10.9 million open jobs at the end of July.
Millions of people had to leave their jobs to take care of their children when daycares and schools closed temporarily.
Additionally, after hunkering down – or being furloughed or laid-off – in 2020, many people have rethought what work means to them. How am I valued? How do I want to spend my time? Where do I want to work? What better position awaits? After leaving my job, for whatever reason, in 2020, why go back to the same industry where I’m undervalued and underpaid?
Or for those in the hospitality industry who kept their jobs, work simply became stressful – not enough employees, customers refusing to wear masks, contracting COVID-19, and then taking unpaid leave to get through the illness.
With this a very real backdrop, Smart companies looking to remain competitive are implementing new ways to retain the people they have and gain workers during this tidal wave of resignations.
Employers bolster pay and benefits to extend reach
For example, CVS is boosting hourly pay and eliminating requirements such as a high school diploma or GED for entry-level positions. The drug store chain also plans to end its grade-point-average minimums for recruiting at universities.
Walmart is enticing warehouse workers by giving weekly bonuses, up to $200-plus a week for some of its full-time employees, which it hopes will increase staffing to meet the peak holiday demand. Another big-box retailer, Target, will offer full- and part-time employees a debt-free college education perk and will provide a $200 bonus payable to each of its approximately 340,000 hourly workers.
Others are offering voluntary benefits that include employee discount programs, identity theft protection and even pet insurance. Further, benefits that address workers’ financial well-being, such as earned wage access (EWA), are increasing in importance.
EWA gives unlimited PTO a run for its money
It’s no wonder tools and programs to help ease workers’ financial worries are gaining ground as 84% of Americans said the pandemic caused personal financial stress. As such, 50% of respondents to the same poll said it’s important that employers offer financial wellness benefits.
For instance, a financial literacy program can help employees better manage their money, enabling them to have the knowledge to save for the future. Financial literacy education helps people gain the skills needed to budget and manage their money and even get out of debt.
Similarly, earned wage access (sometimes referred to as “on-demand pay”) supports more vulnerable populations by strengthening workers’ financial security. EWA is quickly becoming the new unlimited PTO –a perk that seemed obtainable by only a few just years ago has become much more widely available.
Since the onset of the pandemic, EWA, which enables employees to receive real-time earnings before a regular pay date, has increased in popularity. The solution supports workers under economic strain by allowing them to pay their bills and purchase necessities without waiting two weeks for the next paycheck. Further, it provides financial flexibility and helps workers avoid expensive, predatory solutions that include payday loans – which often have triple-digit interest rates.
Gain a competitive edge – unleash the power of voluntary benefits
For many companies, finding and keeping quality workers today is downright difficult. Like customer loyalty, employee loyalty is incredibly important for the viability of a business.
Today’s employees want more than just a job and a paycheck. They want to know the work they do is important, that their efforts are appreciated and increasingly, they are looking for employers or prospective ones to provide voluntary benefits.
The pandemic brought financial strain and the need for programs such as financial literacy education and flexibility in how people are paid are becoming essential to reach the workforce. Although EWA has been available for several years, it’s becoming the benefit employees are asking for and companies are increasingly responding.
Offering EWA to vulnerable and other populations strengthens workers’ financial security, while enhancing a companies’ bottom line. To gain a competitive advantage in today’s ultra-tight job market, perhaps it’s time to implement your own EWA program. Your employees will be glad you did.