A year ago, we were predicting people should get ready for “The Great Rehire,” a hiring boom unlike any we have seen before. That time is here. While no one could have written the story quite like the one of the past 15 months, the pandemic created a few scenarios that have resulted in this rush to hire.
One of the repercussions was the giant hole in the job market caused by high levels of unemployment. Unemployment rose higher in three months of COVID-19 than it did in the two years of the Great Recession, reaching as high 16% by the U.S. government’s estimates (Pew Research). Some believe that number to be much higher and more closely in line with the 25% of the Great Depression.
In contrast to the hardships and unemployment caused by Covid closures and restrictions, there is another group on the opposite end of the spectrum. Amidst concern for the future and left without options for money draining activities such as vacations, or even dining, Americans were saving their money. This has resulted in approximately $1.6 trillion of pent-up spending, according to the Commerce Department. Worldwide, consumers saved an extra $2.9 trillion during the pandemic (Bloomberg Economics).
The Boom in Spending and Hiring
As people feel confident that we are moving past the pandemic and business is returning to normal, there is – and will continue to be – a surge in spending. In response, companies are desperate to hire to meet the demands of a market actively spending and poised to spend more. According to the Bureau of Labor Statistic’s report, there were nearly 9.8 million open jobs in May, almost matching the same number of Americans who are unemployed.
We are also seeing all kinds of signs that people have belief in the opening job market. The rate at which workers quit their jobs, a sign of confidence in the labor market, also rose to a record high in April, and the rate at which workers were laid off fell to a record low, the Labor Department said (The Wall Street Journal).
New Job Opportunities
For employees, this booming market offers opportunities to capitalize on open jobs and new career possibilities. Employees have been changed by the pandemic and are taking a long hard look at their careers. This has resulted in a shuffling of employment with some employees considering a job switch. Many of the highest in demand are not those who are unemployed, but those who are passive candidates. This puts pressure on companies and managers to make sure they have secured their best talent and are providing the value needed to their employees. It also means that companies do not want to miss out on an opportunity to upgrade their talent if it needs improvement.
What to Expect in the Near-Term
As the job market continues to surge forward, expect the following:
Difficulty Finding Good People
There is a heavy demand for people, especially high performers. Our recent XPG Recruit poll showed that more than 50% of companies are finding it difficult to find good talent. Expect that trend to continue and tighten further.
An Increase in Incentives to Switch Jobs
In another recent poll, we found that 90% of companies are willing to offer concessions to encourage employees to make the jump to their company. The most common incentives we see are compensation guarantees, signing bonuses, legal assistance for non-competes and even restructures.
A Focus on Retention Strategies
While companies have embraced flexibility and remote work, the new employee mindset has resulted in companies rethinking how they provide value to employees. Employees are looking for greater connection and alignment and an understanding of how to achieve their own personal goals. Companies are trying to match those. Check out Trends in Retention for more information.
If you are a successful employee who is willing to make a change, you are in the driver’s seat. Demonstrating your value by quantifying your success and telling your story will create even higher demand for you as a candidate. This is an opportunity to seek out or define what you want from a career from a job market looking to please.
Invest in Talent
All of this leads back to my mantra for companies: INVEST IN TALENT. Understand and know your top talent, secure and retain that talent and fill in the gaps with the best talent available. A solid people strategy lets you depend on your strongest human resources in the present and positions you to capitalize on the hiring boom to add top people to your team.
I have talked in previous posts about the value top talent provides to your team beyond production and service. Those benefits are amplified in a changing workplace and growing market:
Helps Attract and Retain Top Talent
Good people want to work with good people. If you have retained good talent on your team throughout the pandemic, they will be beacons to others looking for jobs. With the rush for talent during the next few months, the best talent will seek others like them.
If you have good people on your team, they build and solidify your culture which becomes your hiring brand. Especially in today’s digital environment, word travels fast about the culture of your organization. 50% of candidates say they wouldn’t work for a company with a bad reputation – even for a pay increase. (Betterteam Blog 2017). With the new worker mentality, culture and company value have taken an even more important role.
Increases Training and Development
Good talent offers opportunities for growth. If you have a strong people strategy in place, you have employees that you can develop into bigger roles. Additionally, you have people in place to offer modeling for new hires. Success is demonstrated to others. Being productive and successful doesn’t simply contribute to your bottom line, it adds energy to the entire team.
Makes Companies Nimble
Having a strong people strategy makes your organization more nimble and able to adjust to challenges of the currently evolving workforce. It gives you license to be creative and try new things because you have the talent to accommodate changes.
About the Author
Rich Thompson, CEO of XPG Recruit, is an expert on staffing, human resources, training and leadership development. To get your copy of the XPG Recruit Ebook The Great Rehire, simply request it here or send an email to info@XPGRecruit.com For consulting to increase engagement and/or retention, check out the services of our sister company, Xtra Point Group.