It’s no secret: In 2022, employers are going to need to scramble to stay on top of the shifting labor market. Record-level job turnover, robust job creation, low unemployment rates, skill shortages, and an evolving concept of work and the workplace mean that many employers are struggling to fill open roles.
Since compensation packages have long been one of the most important factors in attracting and retaining top talent, many companies plan to offer on-going salary adjustments throughout 2022 as a way to stay competitive.
Experts are predicting an average pay budget increase of 4.2% in 2022, but that’s an across-the-board average. The compensation consulting firm Pearl Meyer found from a survey that, of those planning to increase pay budgets, half are actually planning an increase of 5.2% and 25% are planning for increases of more than 6%. And, it should be pointed out that, “These compensation budgets also do not include ‘off cycle’ pay increases that employers have already made throughout the year.”
But 2022 is just beginning and these numbers are simply projections. It’s quite possible that, as the months and the Great Resignation churn on, pay rates will increase more than forecast as companies struggle to attract talent.
This trend can be worrisome for startups and smaller companies without the budgets to constantly assess and adjust salaries. But it’s important to keep in mind that workers’ priorities have shifted in the wake of the pandemic. People are reassessing what work means to them. While pay rates will always be important, some employees are willing to give up higher pay in exchange for incentives that are important to them, including a healthy work/life balance, a company culture that aligns with their personal values, and, in particular, flexible work arrangements. In fact, USA Today reports on a survey that found that almost 50% of American workers would take up to a 5% pay cut in order to work remotely at least part time.
This shift in workers’ priorities will be key to attracting and retaining talent in 2022. If you don’t have the budget to offer on-going salary adjustments, or if you’re looking for low-cost perks to offer in addition to salary increases, there are several strategies and incentives that are worth considering.
Put Your Best Foot Forward Online
When it comes to making big decisions – like whether to accept a new job – Americans typically do their own research, and the bulk of that research is done online. For that reason, it’s critical that your online presence is compelling and informative, accurately telling the story of your company.
In the past, a business’ web page served a similar purpose to a yellow page ad: it provided bare bones information and ways to get in touch. Companies trusted that anyone interested would reach out for more information.
Over time, websites have become more sophisticated. As pointed out in a guide about website design, today’s websites “use visually-appealing pages and optimized performance to increase your conversion rate, generate leads, and ultimately improve your bottom line.” And they do that by:
- Using compelling design to make a terrific first impression;
- Ensuring ease of use and navigation;
- Presenting all relevant information through engaging copy and well-chosen photos;
- Accurately portraying your company’s value and culture in an appealing manner; and
- Providing social proof and subject matter expertise to increase your credibility.
A well-designed website makes your company stand out from the competition, which is critical in today’s job market.
In addition to your website, your company’s social media accounts should be informative and engaging and should accurately reflect your company culture. Whether your workplace is laidback and fun or more formalized, your socials are a way to attract candidates to whom your culture and values appeal. Kayla Kozan suggests that you use your socials to “share amusing anecdotes, praise valued employees and communicate the values that are important to your business.”
It may cost a small sum to update your website and keep your social media accounts fresh and active, but the payoff could be substantial.
Automate Your Hiring Processes
Companies everywhere are turning increasingly to technology and automation to streamline their hiring processes. This shift is especially valuable for small businesses. Creating job postings, sorting through applications, scheduling and holding interviews, negotiating offers, and navigating the onboarding process all take significant amounts of time. With the right technology and automation tools, not only can time spent on HR-related duties be freed up for other priorities but, by using data, the technology might actually select a candidate who fits your needs more closely.
As with an update to your online presence, automating your hiring process is an investment. Although there is a cost, it will be outweighed by savings elsewhere and particularly by the benefits of attracting a hire who is a good fit and who is committed to a long-term working relationship with your company. Experts differ on their estimates, but a bad hire can cost anywhere from 30% of their first year earnings to $240,000.
Robert Half argues in a blog piece that taking too long to hire is one of the biggest mistakes that employers can make, particularly in today’s job market. With so many opportunities available, candidates are apt to move on quickly if an employer appears disinterested. Half quotes a survey that shows that “62% of professionals said they lose interest in a job if they don’t hear back from the employer within two weeks — or 10 business days — after the initial interview. That number rises to 77% if there is no status update within three weeks.”
Expediting the interview process is one of the most cost-effective strategies that you can adopt. In order to meet candidate expectations and get your roles filled as quickly as possible, consider:
- Fine-tuning your job posting to make sure that it is current and accurate;
- Pre-screening candidates with pre-recorded one-way or asynchronous video interviews;
- Using online scheduling tools;
- Holding the interviews online, since virtual interviews can often be scheduled in more quickly than in-person ones; and
- Extending a job offer ASAP.
In 2022’s highly competitive job market, it’s important to work quickly through the interview process so that you don’t lose top talent to more agile competitors.
Offer Cost-Effective and Low-Cost Perks
As discussed earlier, many people re-evaluated their priorities in the midst of the pandemic. And, in doing so, their attitudes towards work changed. More than ever before, people are looking at other factors beyond salary when choosing to stay with their current employer or look for a new one. In particular, people are considering whether:
- Flexible work arrangements are available (both in terms of physical location and daily work hours);
- A healthy work/life balance will be achievable;
- Meaningful mental health supports are made available; and
- The company’s culture and values align with their own personal beliefs.
Most of the perks that workers are seeking in 2022 are cost effective, low cost, or may even save money. For example, while there may be some initial outlay required to provide an employee with the equipment and materials they need to work from home, it’s quite possible that your office square footage can be reduced significantly with a hot desking or hoteling system for those times when employees do need to be in the office.
As well, while it may seem as though mental health supports need to be added to benefits packages, there are actually a number of no-cost strategies that support mental wellbeing in the workplace. For example, strong, positive social connections at work are key to employee happiness. And, it goes without saying that feeling valued and appreciated has a positive impact on mental health. A simple verbal acknowledgement of a job well done can do much to promote mental wellbeing.
Create A Talent Pipeline
All recruiters know the value of a strong talent pool or pipeline. But in 2022, it’s going to be more important than ever to maintain that pipeline through engagement. And, engaging talent in non-traditional ways may yield valuable results.
Creating and maintaining a talent pipeline is a terrific way to save both time and money in the recruitment process. Instead of creating a job posting and sifting through resumes each time a role opens, you can instead tap into your pipeline for candidates who you already know will be an excellent fit.
Consider Hiring Contract Workers
In their quest for a healthier work/life balance, flexible work arrangements, and meaningful work, many people are turning to contract work (popularly called “gig work”).
Some employers may be initially hesitant about tapping into the ever-growing pool of contract workers. (By mid-2021, there were over 57 million contract workers in the United States, with several million more considering joining their ranks.) There may be worries about the competency of contract workers and about the long-term effects of not building an internal pool of talented, committed employees. But those worries are largely unfounded. Contract workers tend to be highly experienced because those are the ones who have the most to sell and will have the easiest time finding work. And, of course, gig workers don’t require the same amount of overhead as full-time employees.
The cost savings of dipping into the pool of contract workers can be significant, both during the hiring process and while the project is in progress. If you haven’t already considered hiring contract workers, 2022 is a terrific time to start.
Work With A Recruitment Partner
Working with a recruitment agency to fill open roles might not seem like a cost-effective option. After all, the fee for a single hire is usually about 10-25 percent of that hire’s annual salary.
However, the expertise that that agency provides (not to mention the talent pool that most agencies curate and maintain) is often well worth the cost. They typically handle many of the tasks associated with the hiring process, including creating and posting the job ad, sourcing candidates, pre-screening applicants, and assisting with the interviews.
As well, the cost of a bad hire is significant. As stated earlier, although it’s difficult to pinpoint an estimate, a bad hire can cost anywhere from 30% of that hire’s first year earnings to $240,000.
With their expertise and their existing talent pool, a recruitment agency can help you quickly find the best fit for your open roles. While the initial cost may be significant, the savings down the road may be significant as well. Taking the time to find the right recruitment partner for you may end up being one of your best strategies for hiring top talent on a small budget.