- Amid a massive labor shortage, companies have boosted wages to try to attract and retain workers.
- However, HR experts say that more must be done to stay competitive in the labor market beyond just increasing pay.
- That could include enhancing career development programs, tuition and skill training reimbursement, and removing traditional barriers like degree requirements.
Hiring has perhaps never been harder for employers.
As pandemic restrictions eased amid the accessibility of Covid vaccines and businesses started bouncing back, many employers faced workforce shortages. Workers who may have lost their jobs during the peak of the pandemic were now highly desired.
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In June, there were more than 10 million job openings in the U.S., the most ever recorded by the Bureau of Labor Statistics. In comparison, only 8.7 million people were still unemployed in July, according to the BLS.
The competition to recruit new workers as well as retain existing ones is now fierce. That pressure is doubly felt in industries like retail and dining and hospitality, sectors hit hard by the pandemic but now seeing customers come back.
To try to counteract that, companies of all sizes are trying to attract workers with increased pay.
McDonald's, Chipotle and Walgreens Boots Alliance are just some of the companies that have boosted worker pay. Some others, like Papa John's, have taken those pay increases a step further and have offered referral bonuses and "appreciation bonuses" for existing workers.
However, just increasing pay alone won't be enough for businesses to compete for workers in this challenging environment, according to a panel of senior HR executives who spoke during a CNBC Workforce Executive Council LinkedIn livestream that focused on recruiting, retaining and returning to the workplace.
"It's a pretty dynamic time in the marketplace right now, and you're seeing some pretty big trends and changes so you need to start with ensuring you are offering competitive wages," said DJ Casto, executive vice president and chief human resources officer at Synchrony. "But you also have got to create the right kind of ecosystem to support your employees."
Boosting wages and career ambitions
While Casto said that Synchrony recently increased its wages for entry-level workers to $20, the company also wanted to "tell the story that we're here to help support your career ambitions."
"We wanted to offer family-sustaining jobs, but then also this pathway for you to be able to invest in yourself and reach whatever your career ambition is," Casto said. "The wage is important, but so is the ability for people to reach their career ambitions."
That meant reimagining the company's tuition reimbursement program, as "four-year degrees are not the answer for a lot of individuals," Casto said. Synchrony will now be offering workers what Casto called "boot camp reimbursements for certain skill sets," such as training programs that might be done over several months as opposed to several years.
"These are things that you can acquire that really allow people to get training that translates to their ability to grow their career and their personal wealth — that ability to reach their personal and professional ambitions," Casto said.
Preparing for the next job, even at another company
As more employers boost tuition reimbursement and other skill training efforts, RealTruck human resources executive director Tanya Harris said companies should embrace that it might be preparing those workers for a job somewhere else.
"We do really well as a smaller company supporting personal development," Harris said. "We also understand that people take their skills and they go work for another company, so we even use it as a marketing tool in terms of not only will we pay you competitively, but you're going to be able to get a skillset that you'll be able to use with us but outside of us."
That is highlighted in the company's recruiting message, which can often catch potential employees off-guard, Harris said.
"We are transparent and try to help people understand that it's not just about your development today, but it's what that looks like for you long term," Harris said. "That may not be with us, and I think when we go out and recruit and say that people are surprised that we understand that they can build a good resume and skills that can take them places."
Focusing on worker's skills, not their degrees
A tight labor market should make companies reflect on their hiring practices, making sure that that potential quality employees are not being overlooked because of things like degree requirements.
Nickle LaMoreaux, IBM senior vice president and chief human resources officer, said as more companies have looked to fill technology and digital-focused roles, even in traditionally non-technology-focused industries, there is already a shortage of potential workers.
That led IBM to eliminate the degree requirement for over 50% of its jobs, LaMoreaux said, as the company is taking a "skills-only approach to recruiting and hiring."
"It doesn't matter how you got the skill, or where you got it from, as long as you have it," LaMoreaux said.
The company has also looked to focus on the skill set of its existing workers, putting more emphasis on training, skilling and retraining.
"We are helping them move to a job of the future," LaMoreaux said. "Skills first is not just for recruitment purposes; it is also for retention purposes."
Embracing the new way of working
As many workers prepare to go back to offices in some capacity in the coming months, companies need to focus on making sure this new way of working truly works for all, Casto said.
"There are concerns with our employees: proximity bias, and will individuals who choose to go back to traditional spaces like they did pre-pandemic, are they going to be considered for more talent movement because they're close to their leader? For leadership development programs, how do we think about coaching a leader in regards to engaging a workforce that is hybrid? How do you think about performance management and your reward system differently?" Casto said. "Companies need to put as much focus and energy on this ecosystem that needs to be created to make this new way of working work for everyone."
LaMoreaux said that making sure there was not an "uneven playing field" was crucial, perhaps making it where teams came together on a specific day and worked from home the other days so that it felt like more of a collective, or humanizing things like someone not being "camera ready" while at home and not being punished for it.
"I think it's about leading with empathy as we think about the future of work," LaMoreaux said.
On Thursday, November 12, CNBC is hosting its first annual Workforce Executive Council summit for influential CHROs and Chief Diversity Officers from 1-4 p.m. ET. Apply to the WEC to attend at www.cnbccouncils.com/wec.