A year ago, the Covid-19 pandemic changed the way markets were driven and its devastating effects are still to be curbed. At a glance, it seemed to have affected the economies of scale temporarily but soon it was realized to have traced out faults that required complete system overhauling.
As the economies started to reopen and businesses began to run on tracks again, a sudden crunch of workforce started to diminish the efforts. According to the latest data available from the Bureau of Labor and Statistics, 20.2 million workers left their employers from May to September. The Attrition rate in US tech giants reached a massive 33% during Q1, 2021. This has resulted in huge monetary losses for the tech giants. It has been estimated that the cost to the employer of replacing a departing employee is on average 122% of that employee’s annual salary in terms of finding and training a replacement.
A survey reported 73% of 380 employers in North America facing thrice the difficulty attracting employees as to the previous year. And 70% expect this difficulty to persist into 2022. Thus, there is a large incentive for businesses to adapt to the new labor market conditions and develop innovative approaches to keeping workers happy and in their jobs. It’s also important that they tailor the types of financial, social, and developmental incentives and opportunities they provide to individual employees’ preferences.
HOW IT BEGAN:
In recent years, the service sector accounted for about 86% of all employment in the U.S. and 79% of all economic growth. Since the bulk of employment in service-based businesses merely requires generalized professional abilities in computing and communication, individuals can shift between organizations relatively easily because demand is constantly high. The rising demand has raised the standards of occupational deliverables provided to the employees resulting in the growth of expectations among them.
Owing to the influence and infiltration possible by the information technology and recruitment portals opportunities for the employees have escalated exponentially from across the world. This has resulted due to the growing prevalence of remote working, discarding off the need for employees to relocate for a new job. Not only has this brought ease for the job seekers but also has opened gates to a whole pool of new talent for employers. Thus, the cost of transition between employers has been reduced for employees putting them at advantage and making them more selective while seeking jobs.
In the pre-pandemic era, the corporates in the advanced economies had developed a well-organized network of global partners throughout, looking after their outsourcing processes. The system seemed to function well until the pandemic unveiled the flaws. A major section of such corporates has faced tremendous losses due to a sudden and expected payroll system failure of the offshoring partners. Repeated lockdowns and Industrial shutdowns globally, weakened these organizations. A faulty payroll and compliance structure resulted in, delayed salaries, deductions, and in many cases sudden lay-offs. This not only affected the employees but also imposed a large sum of monetary damage on employers in recruiting and training a new team.
WHAT CAN BE DONE?
- Hiring The Right Team
- Collaboration With a Minority Business Enterprise
- Contingent Staffing
- Robust Payroll System
The right team can not only deliver the expected results but also is much fluent to administer. As per a survey by Gallup, 66% of employees in the US admitted to not being suitable for the job role provided to them, which is one of the major causes of their dissatisfaction with their job. A right and appropriate team with all its members befitting their role will not only deliver the best results but will also improve employee retention by a huge margin
A survey found that employees of organizations that are highly committed to and supportive of diversity, experience more inclusion and are 80% more likely to agree of being working in a high-performing organization.
Collaborating with Minority Business Enterprises plays an important role in strengthening brand recognition which results in attracting and recruiting diverse candidates. Higher diversity and inclusion did not just increase employee engagement but also widen the array of opportunities for the candidates seeking such recognized organizations.
The most prominent and proven method when it comes to filling up the shortage of workforce has always been contingent staffing. These solutions are extremely cost-effective and easy to monitor with minimal intervention. Since the upheaval of remote working as one of the major priorities amongst employees, temporary and project-based staffing solutions have gained demand. It provides easy access to the talent pool from across the world and usually allows the advantage of remote working to the employees.
It’s no mystery that delayed and deducted salaries due to sudden shutdowns in various parts of the world led to a massive trend of resignation in North America. The lack of a robust outsourcing partner with the employer of record facility turned out to be the cause. An Employer of record will not only manage the payroll but also find a skilled workforce and deal with country-specific tax laws and local compliance matters.
These measures will not only help in increasing significant employee retention but will also enhance the brand recognition of the organizations.
Based on an estimate, 85% of employers identified diversity as a priority for their organization, yet 46% of employers do not have programs in place to attract and recruit diverse candidates. ShoreWise Consulting being a registered Diversity vendor in US and Canada provides supplier diversity services and solutions to solve your supplier diversity challenges that can help you achieve your operational objectives.
Since 2012, ShoreWise Consulting has been delivering complete outsourcing solutions to its clients. With our presence across 13+ countries, we help in establishing a dedicated team of high-quality professionals, skilled and trained to deliver the best in stipulated time. To ease the progress and process of expansion, we manage the employee background checks and onboarding, global payroll processing, and compliance with local regulations and taxes so that your focus on growth is never hampered.
As the U.S. labor market is diversifying in terms of ethnicity, gender, and age, employers that cannot provide greater flexibility and variety in their working environment will struggle to attract and retain workers.
The quit rate is likely to stay elevated for some time to come. The sooner employers accept that and adapt, the better they’ll be at managing the new normal.
The Great Reshuffle is in full swing, with 25% more job changes globally than we saw in pre-pandemic times. The labor market remains tight, and the world is waiting to learn more about the impact of the Omicron variant. We’re not out of “these uncertain times” just yet. But as 2021 comes to a close, here’s hoping we can all enjoy more opportunities to succeed in our aspirations.