Will labor shortage last all your days in HR? Experts say, ‘Possibly’!

We don’t want to scare our HR pros too much, but you should know: The labor shortage you feel now will most likely be a pain point for a long time.

The better news: We have expert- and research-driven strategies to retain great employees and recruit more of the kinds of candidates you want.

The labor shortage facts

But first, let’s look at the labor shortage, what it stems from, and why it continues.

When COVID-19 started its spread and workplaces shut down, millions of people stopped working, voluntarily and involuntarily. Most went back in the past two years, but about 10% might not ever walk into work again.

So there are about 3.5 million workforce dropouts. That’s the difference between the number of workers in March and how many there would be if the labor force stayed on its pre-pandemic growth rate, according to a group of researchers from Stanford University, Instituto Tecnológico Autónomo de México and the University of Chicago.

Generally, this group doesn’t plan to return to most pre-COVID activities, including work, shopping and dining. More specifically, the dropouts tend to be women, lack a college education and worked in low-paying positions.

The phenomenon is dubbed “long social distancing” and “this drag on labor force participation shows no sign of abating over the past year, suggesting it could depress labor force size for a long time,” the researchers say.

But, the long social distancers aren’t the only population dropping out (although they’re likely the only one to stay out as long as you’re in HR). Many made the decision to stay out because they wanted or have to care for dependents. Others decided to retire early. Some chose to pursue passions over careers.

Whatever the reasons, to HR pros, it’s simply a shortage of talent for available positions. That leaves double-duty for HR: Retain great employees and hire ideal candidates.

Here are three retention and three hiring strategies:

Retain: Fix the culture

MIT researchers are adamant: The Great Resignation has been mostly fueled by toxic workplace cultures. They found corporate culture is 10 times more likely to contribute to employee quits than a company’s compensation.

Specifically, the top five leading predictors of attrition in the height of The Great Resignation:

• Toxic corporate culture
• Job insecurity and reorganization
• High levels of innovation
• Failure to recognize employee performance, and
• Poor response to COVID-19.

“Our analysis found that the leading elements contributing to toxic cultures include failure to promote diversity, equity and inclusion (DEI); workers feeling disrespected; and unethical behavior,” the researchers say.

HR leaders can’t fix culture overnight. They can’t fix it alone, either. But knowing the major contributors – and owning up to allowing those to exist in the workplace – can help leaders ignite change.

Start with targeted surveys. Ask employees to assess the current conditions of DEI, respect and ethics in your workplace.

Retain: Create more lateral moves

If bad culture kills employee loyalty, inhouse career opportunities secures it. The MIT researchers found offering lateral career moves is two-and-a-half times more predictive of retention than compensation.

Sure, career movement may come with some compensation adjustment, but researchers say the opportunity alone to expand skills, knowledge and authority are enticing enough to retain employees.

This is especially important to HR leaders and front line managers because you likely have untapped opportunities to make happy those employees who aren’t interested in climbing the corporate ladder.

So promote job openings directly to employees first and with gusto. Many workers simply want a change of pace or the chance to try something new. Those moves are even more enticing when they comes with the stability of staying with their employer.

Retain: Make work predictable

We aren’t going to address the proverbial elephant in the room called “remote work” beyond this: If you can offer it to white collar workers, do it. It has a huge impact on employee loyalty.

Beyond that, for anyone who can’t work remotely, create predictable work schedules. Having a predictable schedule is six times more powerful in predicting employee retention among blue collar workers, MIT researchers found.

When people know what to expect for work, they can plan and enjoy their personal time better. And that makes their workplace more appealing.

Recruit: Lower bar, widen net

We know: You have job descriptions, role definitions, goal expectations and beyond. You and your hiring managers can’t just lower the standards.

Or can you? To get the right candidates, you might want to lower the bar to widen your recruiting net.

Here’s why that approach can help. Nearly a third of candidates are frustrated because they can’t find job openings they’re qualified for, according to research from Job-Hunt.

Imagine if more job seekers who have adaptable skills, aptitude to learn and desire to succeed saw themselves filling your less constrictive role.

So to recruit better, you might lower education experience in favor of practical experience. Or you can list skills required, rather than years in the industry. Another swap-out: Focus on outcomes expected for the role and less on the degrees, certifications or tenured knowledge.

Recruit: Tighten up the process

More than 60% of candidates quit the application process because it’s too lengthy or complicated, according to research from CareerBuilder.

And while some employers think they’re weeding out lazy or unqualified applicants by creating a deeper process, they’re not. Instead, employers are also eliminating good candidates who just might be short on time or are so efficient they don’t want to go to work for a company that doesn’t have an efficient processes.

Instead:

• Eliminate redundancy. Either have candidates upload résumé or ask for manual input – not both.
• Get the link. If you want to see their body of work, request URLs rather than have candidates submit more documents, and
• Speak the questions. Save long, detailed questions and answers for in-person interviews.

Recruit: Communicate

In some cases, HR is the problem behind a company’s recruiting woes. Half of candidates in the Job-Hunt survey said the No. 1 frustration with trying to find a job is not hearing back from employers.

They feel ghosted. And that’s no way to treat anyone willing to work.

Consider this, too: Two-thirds of candidates will wait two weeks to hear back from a company before they move on to another opportunity, the CareerBuilder researchers found. Surely, you wouldn’t wait two weeks to respond to an employee inquiry. So you don’t want to do that to a potential employee either.

Two critical points here:

1. Automate responses to emails to keep candidates in the loop. Almost every recruiting software and job app makes this possible. The key is that you (or your vendor) ensure the messages reach candidates. Create notifications for when messages arrive and alerts for when they don’t.
2. Update status. Keep applicants updated (weekly, at least) on their status, even if they’ve been removed from consideration. You might want to reconfirm their contact information so you can keep them in your talent pipeline of qualified candidates (assuming they’re OK with that, too).