Worker shortages spur hiring incentives, low layoffs
Layoffs and involuntary terminations have reached a new low, as firms try to retain employees and hire new ones. They're also turning to some unique cash incentives.
Spherion Staffing LLC, which fills a wide range of jobs including clerical, customer service, IT and industrial positions, said it has more than 10,000 posts available at 200 locations nationwide. In response to worker shortages, it just announced a weekly contest through mid-September for existing employees with prizes such as MacBooks, GoPros and a grand prize of a Ford Mustang or $25,000 in cash. It's an incentive for hiring and retaining employees.
In 2019, before the COVID-19 pandemic, Atlanta-based Spherion hired nearly 40,000 employees. "This means in an average month, we might have about 3,300 jobs filled," said Doug DeLor, vice president of marketing at Spherion, in an emailed statement. "Compare that to July 2021, we have over 10,000 openings -- it all comes back to this unprecedented demand that we are seeing from the pandemic recovery."
Almost every industry is experiencing worker shortages, DeLor said. "The job market is so hot right now that there are many more openings than available workers who are applying for jobs," he said. "That's where we can help."
Rick CobbExecutive vice president of new markets, Keystone Partners
In May, the number of job openings in the U.S. was at 9.2 million, with little change from the prior month, the U.S. Bureau of Labor Statistics (BLS) reported last week. According to Federal Reserve data, layoffs and involuntary terminations reached a century low in May at 1.37 million.
"No one is laying anybody off because they can't find anybody to replace them," said Rick Cobb, executive vice president of new markets at Keystone Partners, a career management and leadership development firm in Boston.
Hiring and retention incentives
Instead, some employers are using incentives to address worker shortages as well as retain employees. This month, Papa John's International Inc., a restaurant chain in Louisville, Ky., announced $2.5 million in incentives for "new hiring, referral and appreciation" bonuses. Amica Mutual Insurance Co. in Lincoln, R.I., is advertising a $2,500 signing bonus for customer service representatives.
Indeed, an employment website, said for the seven days ending June 18, 4.1% of its job postings advertised hiring incentives -- double the 1.8% share of firms offering incentives in the seven days ending July 1, 2020.
Regardless of the incentives, the quit rate remains high, at 2.5% in May, declining from 2.7% in April, according to the BLS.
"There is a known correlation between the opportunity to work and resignation rate," said Ian Cook, vice president of people analytics at Visier Inc., a people and workforce analytics firm in Vancouver, B.C.
The lack of insecurity of some jobs brought on by the arrival of COVID-19 became a lesson to think differently about the future, Cook said. But there is also pent-up demand for changing employers. "People who weren't ready to move to a new job during COVID are ready to move now," he said.
Business reopenings, such as sports and entertainment venues, are driving firms to hire hundreds of people. This type of hiring "is happening at scale across the labor market," Cook said.
Patrick Thibodeau covers HCM and ERP technologies. He's worked for more than two decades as an enterprise IT reporter.