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Labor Shortage 2022: Do’s and don’ts

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With the new year just around the corner, it’s a good time to pause and review the past twelve months. The labor shortage reached a critical point in 2021, affecting countless businesses across numerous industries. We were here throughout it all, listening to our customers’ struggles – understanding them, helping them through the crisis. In September, we conducted a joint labor market study with our partner North Country Business Products in order to better understand how businesses have been affected by the labor shortage, and especially what strategies seem to work best in overcoming the challenges. The next question is: how do we carry those lessons learned about the labor shortage into 2022?

For this post, I compiled some practical advice from the TimeForge team, based on what we learned from our customers and partners in 2021. Each team member presented at least one thing employers should be doing right now in light of the labor shortage, and one thing employers should avoid. We hope it helps.

5 things employers should do in 2022 in light of the labor shortage

Here’s what we think employers should be doing right now and in 2022:

1. Do ask for employee referrals

Audrey Hogan, our Chief Operating Officer, points out that employee referrals have been an effective strategy for struggling businesses.

“According to the study we conducted with North Country, employers should be focusing on getting employee referrals, which means investing (heavily and with intention) in their company culture,” she says. “But it’s not as simple as buying a new foosball table for the break room. Employers should focus on making their company the best place to work. They should assess what is actually meaningful to their most valued employees and make sure they deliver that.”

Scheduling one-on-ones with employees in the new year might be a good place to start. If a company has employees who will rave about the workplace, they can ask for referrals with confidence. If they don’t, it means their company culture could probably use some improvement, first.

2. Do invest in current employees first

Mike Hetisimer, our Implementations Manager, agrees that employee satisfaction is crucial. Particularly when it comes to the satisfaction and retention of current staff. “Priority number one for employers in 2022 should be to keep existing employees happy and pay them a competitive wage,” he says. Specifically, “employers should do this before hiring new staff at those better rates.” Otherwise, they risk losing their most experienced and valuable team members over compensation issues.

3. Do take steps to appeal to a younger workforce

Isla Gibson-Butcher, our Solution Manager, says employers should take steps to appeal to today’s younger workforce. The concerns of Gen-Y and Gen-Z differ from previous generations, and those differences are important when drafting recruitment pitches and job postings. “For example, millennials seek good benefits,” she says. “In the ongoing pandemic, they want the peace of mind health insurance can bring when their main job requirement is customer service to large volumes of the general public.”

As for the growing Gen-Z: they want to know that their employers care about diversity and societal issues. Something employers should keep in mind as they aim to improve their workplace culture in light of the labor shortage in 2022.

4. Do streamline your hiring process

Don Salisbury, our Software Architect, says employers should take the time to evaluate and modernize their hiring process. “Make it easier, faster, and more flexible,” he says. Employers can’t afford to lose out due to inefficient workflows and outdated methods.

For example, an applicant tracking system can save time and ensure that job candidates don’t fall through the cracks. If the system automatically pushes open positions to popular sites like Indeed, that’s even better. (TimeForge does.)

5. Do focus on employee retention

Erik van Gilder, our Chief Technology Officer, says employers should continue to focus on employee retention in 2022. For example, he suggests that employers:

  1. Pay higher wages if possible (in line with Mike’s advice above).
  2. Schedule in a flexible manner and in advance. Employees need to be able to plan for other responsibilities, including school, kids, senior care, and home life. If a job is inflexible, they’ll simply go somewhere else.
  3. Train employees for growth and help them reach their potential. (And hire for “bench strength” when possible.)
  4. Treat employees with respect, which includes respecting their time.

Now, let’s look at 5 things employers should not be doing in 2022.

5 things employers should avoid doing in 2022 in light of the labor shortage

Here’s what we think employers should avoid/stop doing right now and in 2022:

1. Don’t invest in hiring bonuses

“Employers in retail and restaurants should not, except in special circumstances, be investing in hiring bonuses in 2022,” says Audrey. “With applicants failing to show on day 1, the employer is likely just throwing money out the door.” The obvious exception is of course referral bonuses.

2. Don’t pay new hires more than existing staff

“A quick way to lose employees is to hire new workers on at higher rates than what existing staff are making,” says Mike. Employers who do this are essentially shooting themselves in the foot because employees inevitably find out about the difference. “Raise the payrates for your existing staff first before you hire on new workers at those rates.”

3. Don’t ignore the needs and concerns of your younger workforce

Younger already employees make up a large portion of today’s workforce. By ignoring their concerns now, employers set themselves up for failure later, says Isla. Instead, companies should start thinking of ways to evolve their culture to better incorporate the things Gen-Y and Gen-Z care about.

4. Don’t ignore company culture

Similar to Isla’s suggestion above, Don advises employers not to ignore company culture. It’s simply far too important for recruitment, engagement, and retention. “Keeping employees engaged will help create longevity in your workforce,” he says. But it’s also more than that. A company with a bad rep on sites like Glassdoor.com and on social media will have that much harder of a time filling open roles.

5. Don’t retain toxic employees

While Erik says employee retention should still be a priority in 2022, employers shouldn’t be afraid to let go of staff that aren’t a good fit with the company culture. Even in light of the labor shortage. “One toxic employee can undo all the retention efforts directed at other employees,” he explains.

Takeaways for dealing with the labor shortage in 2022

To sum things up, employers should invest in their current employees and in improving their company culture, keeping in mind what a younger workforce looks for in employment. They should then seek employee referrals to capitalize on the positive company culture they’ve built. Finally, employers should streamline their hiring process to make it easier to onboard new staff but shouldn’t forget about ongoing employee retention.

Things employers should not do include paying out hiring bonuses (except for referral bonuses) and paying new hires more than existing staff. Employers should also avoid hanging on to employees with a poor attitude, as they can be toxic to the team and can undermine the company’s retention efforts.

Culture is king in 2022. A company’s rep as an employer can greatly boost or hamper its recruitment and retention efforts. In an age when job review sites and social media posts are common, and when competition for new hires is tight, it pays to invest in company culture.

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