Research Confirms It’s Time to Rethink How We Hire

The public sector, including county governments, finds itself at a turning point in the pandemic-induced evolving labor market. Here, we discuss new research and suggestions on how to successful recruit in the current environment.

While Maryland’s overall unemployment rate has reached its lowest point since before the COVID-19 pandemic, counties are still universally struggling to hire in the increasingly complex and competitive market.

According to new research from McKinsey & Company, these challenges are felt across fields and across the country:

Competition for talent remains fierce. For certain categories of workers, the barriers to switching employers have dropped dramatically. In the United States alone, there were 11.3 million open jobs at the end of May—up substantially from 9.3 million open jobs in April 2021.1 Even as employers scramble to fill these positions, the voluntary quit rate is 25 percent higher than prepandemic levels.2 At the current and projected pace of hiring, quitting, and job creation, openings likely won’t return to normal levels for some time.

Interestingly, McKinsey & Company noted that the majority of workers who left their jobs during the Great Resignation are not returning to the same industry.

McKinsey & Company

 

Also of interest are the factors influencing employees’ decisions around attrition and job searching, including topics top-of-mind during the COVID-19 pandemic, like workplace flexibility and “adequacy of support for health and well being.”

McKinsey & Company

To best respond to this historic moment, McKinsey & Company suggests that employers should broaden their hiring searches to include new and diverse talent pools. In doing so, employers need to know more about the employees they are wooing.

The McKinsey & Company report explains:

What we are seeing is a fundamental mismatch between companies’ demand for talent and the number of workers willing to supply it. Employers continue to rely on traditional levers to attract and retain people, including compensation, titles, and advancement opportunities. Those factors are important, particularly for a large reservoir of workers we call “traditionalists.” However, the COVID-19 pandemic has led more and more people to reevaluate what they want from a job—and from life—which is creating a large pool of active and potential workers who are shunning the traditionalist path.

As a result, there is now a structural gap in the labor supply because there simply aren’t enough traditional employees to fill all the openings. Even when employers successfully woo these workers from rivals, they are just reshuffling talent and contributing to wage escalation while failing to solve the underlying structural imbalance.

To close the gap, employers should try to win back nontraditional workers. But how?

According to the report, there are several kinds of employees, traditional and nontraditional:

The traditionalists: The star of the classic labor pool won’t be enough to fill all the jobs: “Traditionalists are career-oriented people who care about work–life balance but are willing to make trade-offs for the sake of their jobs. They are motivated to work full-time for large companies in return for a competitive compensation package and perks, a good job title, status at the company, and career advancement.”

Traditionalists often leave jobs because “they see no room for professional or personal growth, believe that there is better money to be made elsewhere, and think that leaders don’t care enough about them—tried-and-true reasons for disgruntlement, to be sure, but ones that are now being acted upon broadly.”

Many traditionalists who left employment under the Great Resignation have indicated that they an be wooed back under the right conditions, but those conditions might come at a high price.

Employers should consider non traditionalists to fill openings

The non traditionalists are broken into various categories:

  • The do-it-yourselfers: Anything for Autonomy. This category of worker “values workplace flexibility, meaningful work, and compensation as the top motivators for potentially returning to the traditional workforce. They tend to be 25 to 45 years old and run the gamut from self-employed to full-time employed in nontraditional roles to gig and part-time workers.”
    • According to McKinsey & Company, “Attracting this cohort may be difficult, because organizations must show that what they offer is better than what these workers have created for themselves. Companies can provide the freedom that these workers crave and a sense of purpose, as well as a compensation package beyond what they have on their own.”
    • Strategies to do so might include: modularized work — “defining discrete meaningful tasks that can be accomplished independently” and
      embracing flexibility from the outset — “even by asking job candidates how many interviews they would prefer to have and whether they would rather do them remotely or in person.”
  • The caregivers and others: At home but wanting more. This category of worker is “motivated by compensation but have another constellation of priorities for returning to their jobs: workplace flexibility, support for employee health and well-being, and career development. … The predominant age group is between 18 and 44, with more women than men, many who are parents or other caregivers. A lot of the people in this group needed more flexibility and support than traditional employment offered and left to care for children, parents, or themselves.”
    • Strategies for attracting this group include increased flexibility around parental and family leave. Notably, “workplaces that are inflexible and that don’t provide a pathway to advancement aren’t worth the sacrifice of going back to work while continuing their caregiving duties.”
  • The idealists: Students and younger part-timers. Notably, this category of worker “emphasizes flexibility, career development and advancement potential, meaningful work, and a community of reliable and supportive people, with compensation far lower on the list.”
    • Strategies for attracting this group include increased flexibility, but also demonstrating “a willingness to invest in this group’s development and create a strong organizational culture that emphasizes meaning and purpose.” This group values diversity and inclusion, for example.
  • The relaxers: Career doesn’t come first anymore. This category of workers includes a “mix of retirees, those not looking for work, and those who might return to traditional work under the right circumstances.”
    • According to McKinsey & Company, employers are not recruiting this company as diligently as they should be right now, and, “Employers who had positive relationships with employees they lost should consider reaching out to them to see if they can find the right balance to win those people back.”

Read the full report from McKinsey & Company.

At the 2022 MACo Summer Conference general sessions, “Help Wanted Part 1: Getting Over the Hiring Slump” and “Help Wanted Part 2: Recipe for Retention,” esteemed panels of leaders and policy experts will explore the current challenges in Marylander’s evolving workforce and new and innovative approaches to hiring and retention.

The 2022 MACo Summer Conference will be held at the Roland Powell Convention Center in Ocean City, MD from August 17-22. This year’s theme is “Taking Care of Business.” More information can be found on our conference website.

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