Hiring Lessons of the Great Resignation

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Headlines proclaiming that American workers are quitting their jobs in record numbers have employers worried about how to best staff their organizations. However, in his article titled “Should Employers Rethink What They’re Offering Workers?,” Professor Peter Cappelli, Director of the Center for Human Resources at Wharton Business School provides a different point of view. His analysis offers an important lesson in not overreacting to the news but considering what you could be doing better in your own hiring process.

There are a number of factors impacting job openings. At the onset of the pandemic and mandatory shelter-in-place orders, many employers were forced to lay off employees. This was particularly true in the hospitality and retail industries. With vaccine availability and mandates reduced, employers began to hire again but with stops and starts because they had to address other factors including how to create a safe work environment, employees’ expressed desire to continue working remotely, and unexpected complications like the Omicron variant.

While employers waited to determine the appropriate next steps, laid off employees sought other employment so when things started to reopen, those same employees were no longer available for work. This created a temporary imbalance in supply and demand, which may be factoring into workers being more selective about job opportunities than they might otherwise be. Overall, however, the job market has not changed as much as it may seem from media reports.

Professor Cappelli looked at the number of people resigning noting first that we only started keeping these records 20 years ago and most of that period was dominated by recession. Therefore, the average rate of turnover over a lengthy period is difficult to determine. However, even with existing data, he states, “The idea that people are quitting all over the place is not true.”

In analyzing the turnover data by month, Professor Cappelli found that in July 2021, when the Great Resignation discussions started, the turnover rate was 2.7% per month. In July 2019, it was 2.4%. Currently, it’s up to 3% which is not a large increase over 2019. So what’s influencing the impression that what we’re experiencing is an exception?

What we see reported in the news is skewed. We hear about businesses unable to find workers, but much of this is occurring with restaurant workers, warehouse workers, truck drivers, hotel workers, etc. These are relatively unskilled positions. When you look at positions in finance or construction, the rate of employees quitting hasn’t changed. Professor Cappelli posits that there is no evidence to support the theory that people are quitting and sitting around.

Takeaways for Your Business

Regardless of whether you are experiencing increased turnover or having trouble filling positions, the job market continues to evolve and COVID is another part of that. In my experience, many employers are facing changing employee expectations and/or stiffer competition to recruit the best people, among other issues. If you are hiring in this challenging environment, here are tips to increase your ability to bring in the right person for the position:

  1. Don’t settle. While you may be in a rush to hire, don’t bring someone in for the sake of having a body in the seat. Turnover is harmful to morale and the client experience so take the necessary time to bring in the right person.
  2. Speak to your organization’s unique value proposition in the job ad. Describe why the work you do is impactful, how it makes a difference in the lives of others, how you support employees, the opportunities for growth and development that are available and other issues relevant to applicants. Your job ad is your one opportunity to make a first impression. If it doesn’t resonate with job seekers, they won’t apply.
  3. Avoid ghosting. Yes, it’s a thing. For years, employers haven’t been consistent at following up with candidates, especially those not chosen for a position. Instead, they just stopped communicating and job seekers are now doing the same. Sometimes they don’t show up for an interview or even their first day of employment. Be transparent about when and how you will be communicating so the candidate knows what to expect. Stay in touch after the offer is made so you are building a relationship before the person even starts working with you.
  4. Formalize the interview process; don’t wing it. You must plan for the interview. This means reading the resume, formulating your interview questions, and more. Without a formal process you may not be evaluating candidates in a consistent manner and that makes selecting the right person more difficult.
  5. Speed is key. You are competing with other employers for talent and we’ve seen a return to on-the-spot job offers and signing bonuses. While this won’t last forever, for now, employers can no longer utilize an extended interview process that includes multiple interviews. Determine who needs to be part of the interview so you can move through the process in a more succinct and timely fashion.

If developing better ways to recruit new talent is your focus, reach out to us to see how we can help. As a certified Talent Optimization Consultant, I can help you assess candidates to ensure they are the best fit. Contact me at asarver@elliebluhr.com.