In normal market conditions, people who’ve been unemployed due to an economic slump are generally eager to take a job when the economy perks up. But times are far from normal in many places and industries. One of the most pressing concerns employers face today is labor quality and availability, according to findings from The CFO Survey for the first quarter of 2021. 

Here’s an overview of what’s happening in some areas and how employers can attract and retain qualified workers.

Reasons for the Shortage

Employers offer various explanations for the current labor shortage including:

• With federal funds added to state unemployment insurance benefits, some workers can earn more by staying on unemployment than they would earn by accepting low-paying jobs,
• Parents of children who are attending school remotely lack the childcare support to leave home to go to work,
• Some people are afraid of contracting COVID-19 at a worksite, and
• Some Baby Boomers have adopted a you-only-live-once attitude and decided to retire.

President Biden recently instructed the U.S. Department of Labor to work with states to restore requirements that unemployment benefits only be given to people who are actively seeking jobs and don’t turn down “suitable” job offers. In addition, some states have already taken action to eliminate the incentive to stay on unemployment benefits when viable job opportunities are available.

Government Assistance

The American Rescue Plan Act (ARPA) also offers relief to help parents return to the workforce. Specifically, the ARPA provides subsidies for childcare providers that could expand the availability of those services on an affordable basis to parents of homebound students.

On the state level, in a move that could be followed by other states, Montana recently announced a plan to pay a bonus to unemployed individuals “who rejoin the labor force and accept and maintain steady employment for at least one month,” according to Governor Greg Gianforte. Montana will use money granted to states under the ARPA to fund this effort; so, other states might follow Montana’s lead without dipping into their own coffers.

Creative Solutions

Even with government relief measures, you might still have trouble over the short run finding qualified workers to fill your job openings. Money talks, so you might consider offering:

• Signing bonuses,
• Stay-bonuses (awarded to employees who stick around for a prescribed period), and
• Above-market wages.

However, before increasing your compensation budget, it pays to check your employment value proposition (EVP). In a nutshell, EVP refers to everything that employees appreciate about working for your company.

A more comprehensive definition from HR technology company Smarp is “an ecosystem of support, recognition, and values that an employer provides to employees to achieve their highest level of work.”

Intangible Benefits

When evaluating your EVP, start by talking to your loyal and productive employees to find out what they value most about working for you. They’ll probably mention intangible “benefits” you don’t even recognize because they come naturally. Examples might include the following:

• Respect and concern for employees’ well-being,
• An upbeat corporate culture,
• Flexible work arrangements,
• Learning and training options, and
• Professional growth opportunities.

When employees believe you’ll do your best to provide jobs with more responsibility and pay whenever possible, they’ll do more to help your company grow and provide additional opportunities for advancement.

Traditional Benefit Offerings

Employees also value traditional benefits, such as health plans and 401(k) matching contributions. 

You also might consider offering “voluntary” benefits, including consumer goods purchasing services, life insurance, disability insurance, and pet insurance. Employees pay for these benefits, although they might be payroll-deducted. By negotiating with vendors, employers may be able to provide these programs to employees on a more economical basis than via traditional sales channels.

Optimizing Your EVP

When evaluating EVP, the goal is to make your company’s compensation package as attractive as possible — without breaking the bank. By surveying workers, you can help determine which monetary, intangible, and noncash components they value the most and identify gaps in your offerings. Sometimes, small changes can reap major payoffs when it comes to attracting and retaining workers in a tight labor market.

You can’t bolster your EVP overnight. But the sooner you discover the cost-effective benefits that your employees value, the sooner you may be able to assemble a skilled, motivated, and productive workforce to thrive as the economy moves forward.