Secrets to Finding and Paying Top Talent in Our Post-COVID World
While business activity is returning to some semblance of normalcy post-pandemic, finding and retaining top candidates is proving difficult. Check out the conversation that Dawson & Dawson, Inc. CEO, Kathy Dawson, CSP had with leadership, culture, and compensation expert Laura Conover, in which we discuss what senior leadership needs to know and do to thrive in this unprecedented job market. Thank you Michael Ashley who coordinated the conversation and was our host in the video presentation.
Click on the LinkedIn Article to read more AND… Check out the VIDEO to listen to the conversation.
Here’s the Q&A copy:
Q: How would you describe the executive recruiting market in California as of Q2 2021?
Kathy: I would describe it as unparalleled. Right now, unemployment is 8.3 percent in Northern California and 6.4 percent in Southern California. (Traditionally, 2.5 to 3.0 percent of people are “unemployable,” so really what we have is just about 3.0 to 5.0 percent of the workforce that is employable, and everybody is trying to recruit them.) It’s definitely a candidate’s market. If you’re an employer, you’ll want to hire someone quickly so you’re not left out. You’re going to run out of talent for sure.
Laura: I agree. I’ve been doing compensation work for 30-plus years, I’ve had my own firm for 27 years, and I’ve never seen anything like this. In addition to what Kathy just said, here’s another statistic to consider: Last year, about 40 percent of Americans changed either employers or managers. There’s this massive game of musical chairs going on. Employers and recruiters have to work like mad to keep up with it.
Kathy: The media is calling it The Great Reshuffling. The COVID lockdowns forced people to re-evaluate their lives and their priorities. A lot of people realized they were on this hamster wheel going nowhere, and they discovered they had options.
In many industries, people saw they could work from home—and that home could be anywhere, which is why so many are now leaving California. They can enjoy a great lifestyle for a lot less somewhere else. If they can work remotely, then why wouldn’t they? Or they’re switching careers entirely, looking for something that gives their lives meaning and allows them to spend more time with their families. I have one client who has moved to Belize. Another is living in a hotel in Dana Point because she wants to be near the beach. My father, who will turn 91 this November, sees what’s going on and says it’s the best thing he’s ever seen. This is a change Americans needed to make.
Q: We know the pandemic devastated many industries and threw tens of millions of people out of work. This being the case, why is it that employers are finding it so difficult to find good employees?
Laura: Well, in addition to what we just discussed, a lot of people just aren’t interested in going back to their old jobs. Three other factors are at play. The first is lack of available childcare. This is preventing many women from returning to the workforce. In fact, the number of females currently working has dropped to where it was in the 1980s. That’s huge.
Reason #2 is that many people are still afraid of getting COVID. For many, returning to a crowded office when the pandemic is far from over just doesn’t seem like a smart thing to do. And the third reason is the generous unemployment benefits scheduled to remain available until September. For some people, there’s not the pressure there once was to hurry up and get a low-paying service job. At least not right now.
Kathy: I’m getting the same questions from my clients: If so many people were thrown out of work, where did they all go? Like Laura said, some are benefitting from extended unemployment benefits, which can represent twice what they were previously making.
To these people, I say, start looking for work now before benefits run out in September and suddenly the market is flooded with applicants. (Note: High unemployment benefits are only an issue when it comes to workers on the lower end of the pay scale. Executives aren’t being incentivized to stay home because they can make $300 a week.)
To employers, I advise doing seven specific things to attract candidates. First, offer competitive pay. Do not low-ball people you want to hire or someone else will offer them $20,000 more right off the bat. Second, provide unique benefits as a way to get people engaged. At Dawson & Dawson we do a lot of nonprofit work, and our team absolutely loves that.
Third, focus on diversity. Don’t keep going back to the same well. There are many different types of people who can get the work done. Fourth, leverage social media. Don’t just rely on ads and word-of-mouth. Fifth, embrace remote working. I know a lot of employers still resist making this a permanent thing, but it’s here to stay. And employees are going to demand it.
Sixth, offer continuous learning. Who doesn’t want to learn, right? Finally, partner with someone like Laura or me because we’re experts and we’d love to help.
Q: How can companies prepare themselves to work efficiently in the post-COVID world?
Laura: First, determine what kind of work structure works best for your organization. All on-site? All-remote? A hybrid? If it’s a hybrid, in what proportions? Next, determine which roles best suit each work style. Some jobs may need to be 100 percent on-site, some may be 100 percent remote, while others may require people come into the office two or three days a week.
Third, consider how to maximize communication. You can’t over-communicate with your people. How are staff supposed to get in touch with each other and share ideas? Without the traditional “water cooler” space for people to hang out and casually swap ideas, you may need to create some other, perhaps tech-supported way for people to get together beyond scheduled ZOOM meetings.
The key thing to remember is every company culture is different, and one size does not fit all. In fact, this is a great time to define exactly what your company culture is—or should be—and how best to get everyone who works for you on board. A great culture doesn’t just arise by accident. You need a set of formal policies and procedures to create one. You have to be intentional about the kind of culture you desire and how you’re going to build and support it in light of these new work structures.
Kathy: To attract and keep quality people, you also have to keep investing in them. You have to offer rewarding things to do, provide them with valuable training, and provide a strong sense of purpose. You can’t just take, take, take. If you do that, they will go somewhere else.
Q: How will hiring off-site workers affect compensation?
Laura: That’s a complex question. Traditionally, compensation scales factor in the nature of the work, the availability of labor within a specific market, and the local cost of living. We have data that tells us the cost of labor varies between states—say, California versus Iowa—and even between regions within the same state— say, Los Angeles County versus San Bernardino County—not to mention, even between neighborhoods—say, Brentwood vs. South Central vs. Hollywood vs. Sherman Oaks.
Now it’s gotten even murkier. What if your business is headquartered in Century City but you have people working remotely from Encino and Orange County and even Phoenix? You also have to factor in the demand for certain kinds of talent, particularly in the tech field. There are pockets of talent where supply is low if demand is high. If you have a nationwide workforce and pay everyone at the national average, you’re not going to attract top talent in major markets, where the cost of living is higher.
On the other hand, if you pay everyone according to the cost-of-living index where your headquarters happens to be located, say, Los Angeles or San Francisco, then you’re likely to limit your profitability.
Q: It’s complicated, yes?
Laura: It’s very complicated. Which is why even smaller companies may now need the help of a compensation specialist.
Q: In the year ahead, who’s going to have the upper hand, the employer or the employees? And is the current dynamic likely to change in September when high unemployment benefits are set to expire?
Kathy: It’s going to be a strong candidate market for the near future. No matter what employers pay, the talent pool will remain tight, and that’s not going to change in September. Because of COVID, people began to understand there’s more than one way to do business. Their minds have been opened, and there’s no going back.
Another thing limiting the labor pool is that, because of COVID many young people were driven to start their own businesses. So they’re not available to work for someone else. (We always experience an explosion of new small businesses in times of crisis.) We saw it in 2008 and again in 2020. Even back in 1929. When the economy changes, it forces people to change with it. Unemployment can be a super-motivating force.