The needs of American businesses have largely outgrown the labor force. With recession fears looming, unemployment remains at a "pandemic low" and the quit rate has surged to an all-time high. Hiring will be a challenge for business leaders indefinitely, regardless of what the economy does.
With the job market tipped in favor of the employee, every worker is looking to "upgrade," whether they are in pursuit of a better title, a higher salary, or a more optimal work schedule. Across the board, working individuals are seeking improved pay and benefits, greater flexibility, and better work dynamics. At Vistage, we've gone from saying the Great Resignation to the Big Upgrade, as people aren't simply quitting, they're upgrading.
Above all else, we know that competitive salary is employers' top strategy for attracting top talent. However, since recent Vistage research revealed 78 percent of small to midsize businesses are increasing salaries, more pay in and of itself is not enough--not to mention, continually topping salary is not a sustainable long-term strategy. Therefore, SMB leaders are tasked with reimagining their hiring process. Following are four tried-and-true ways, beyond salary, leaders can refine their approach to hiring.
1. Hiring starts with retention
Retention remains the single most important metric for business leaders, as well as the area that they have the most control over. In a labor shortage, losing high-performing, productive employees who already fit into an organization's culture is truly devastating. Finding a replacement requires time, money, and resources. Every time an employee "upgrades" to a new job, organizations must hire someone who is looking to be "upgraded." That often means finding someone with less experience and fewer skills, for a higher price tag. Increasing retention can begin with adjusting internal salary bands and creating a fair, equitable, and transparent culture around pay. This ensures existing talent is valued equally to new hires and allows employees to "upgrade" without having to look elsewhere.
2. Treat employees like customers
Businesses have long perfected customer acquisition and retention. By looking at employees as customers, organizations can attract talent, rather than recruiting on a case-by-case basis. This requires investing in training for best-in-class "customer-support" and "sales" teams (frontline bosses and hiring managers). It also means implementing marketing tactics at every step of the employee life cycle, from first interaction to making an offer to eliminating post-purchase dissonance and reinforcing culture, and even after someone ultimately decides to leave the organization. All messaging should consistently demonstrate and highlight an organization's defining features, advantages, and benefits, and celebrate exemplary work and organizational role models. By looking at current employees as "renewals," leaders can sharpen their retention efforts and ensure employees feel valued. On the flip side, nurturing campaigns can keep a pulse on top talent who do choose to leave--like a CRM--to keep the company top of mind in case they may one day opt to return (or recommend like-minded peers).
3. Redefine traditional
To keep a competitive edge, business leaders must embrace the new reality of what the workplace looks like. For some industries, the old model, MF95, of all staff being in the office Monday to Friday from 9 to 5, is long gone. Instead, today's leaders are tasked with providing flexibility and choice, while still maintaining responsibility and accountability. By opening direct channels for communications and empowering frontline managers to make decisions that work best for their specific departments' and direct reports' needs, within a certain set of guidelines and objectives, organizations can begin to determine the right mix for their specific needs. This goes back to the principle of treating employees like customers: Leaders spend a lot of time and energy understanding customers' behaviors and will improve retention if they put equal weight on employees' evolving needs and desires.
4. Culture remains king
There is a growing trend of "boomerang employees." In fact, Vistage's recent research found that 29 percent of small to midsize businesses have rehired former employees. When asked why they believe former employees want to return to their company, many CEOs cited their company culture as the primary driver. Culture remains a crucial component of the hiring and retention process and, importantly, employees' ability to feel connected to their work. People want to feel like they contribute to a greater cause and see value in the tasks they do each day. Employees may feel compelled to take a position at a big-name company with an unlimited budget, but it's much harder to see the direct effects of individual work in a big corporation. Smaller organizations can leverage their unique culture (and win) when salary matching is not an option. Because of its importance, culture should be evident from day one, and the onboarding process should be carefully honed to ensure a positive kickoff that sets employees up for success. Additionally, the old saying "People don't quit jobs, they quit bosses" still rings true. Frontline bosses are responsible for bringing an organization's culture to life on a daily basis. CEOs who invest in the development of team managers can rest soundly knowing culture is being disseminated to individual employees in the field.
Over the course of the pandemic, CEOs learned the importance of having top talent on staff during difficult times. Those who rethink their hiring strategy will be best poised to tackle challenges for years to come, including a potential economic downturn. By realizing this is the Big Upgrade, and not just the Great Resignation, business leaders can position their organizations as an upgrade for prospective and current employees alike and uncover a lasting solution to hiring challenges.