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Labor Shortage 2024: Do’s and don’ts

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With the new year just around the corner, it’s a good time to reflect on the past 12 months and how far we’ve come as an industry.

From 2022 to 2023, rising food, labor, and rental costs plagued many businesses. Employers also had to contend with the lingering effects of the Great Resignation, which only made matters worse.

We were here throughout it all, listening to our customers’ struggles – understanding them and helping them through their challenges. We have since taken those lessons learned and updated them with our advice for dealing with the labor shortage in 2024.

Because, unfortunately, the labor shortage is far from over.

Below are 10 practical tips from the TimeForge team based on our experiences in the field over the past twelve months.

Although much of our advice remains the same as in 2022, we’ve expanded on some of the ways restaurants and retailers can improve company culture and differentiate themselves in the labor market.

In particular, we lay out new ways employers can attract and retain reliable workers in the months ahead.

5 things employers should do in 2024 in light of the labor shortage

Investing in labor pays off

Here’s what we think employers should be doing right now and in 2024:

1. Do focus on culture and ask for referrals

Audrey Hogan, our Chief Operating Officer, points out that employee referrals continue to be an effective strategy for struggling businesses.

“According to a 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. That hasn’t changed.

“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 or using SurveyConnect to conduct feedback surveys with employees in the new year is 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 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.

Investing in employees also means investing in their training and promoting from within the company before hiring from outside, if at all possible.

Nothing breeds resentment and dissatisfaction among staff more than bringing in a stranger to do a job they’ve been working toward for months. Not only that, but you’ll spend more time training an outsider and getting them up to speed.

So be sure to cross-train employees for multiple roles and help them grow into the ones that most interest them.

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 health benefits,” she says. “In this post-pandemic world, 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 2024.

Finally, it’s important to keep your LinkedIn and other social profiles up-to-date. They’re not just for advertising to customers. Potential employees will also use these pages to scope out your company and decide whether they should bother to apply.

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 and Careerjet, that’s even better. (TimeForge does.)

We also recommend investing in tools like our hyper-local recruiting. Research shows that employees want to work closer to home, which not only saves on fuel but also reduces commute times.

Hyper-local recruiting empowers workers to find businesses in their area. For example, students will look for jobs along their route to/from university and parents will look for jobs close to their kids’ schools.

By simply having your jobs listed in the right place, you can help these candidates find you (instead of your competitors). And if hired, they’ll be more likely to stay because it’ll be much more convenient than traveling across town.

5. Do focus on employee retention

Erik van Gilder, our Chief Technology Officer, says employers should continue to focus on employee retention in the months ahead.

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. Working parents and students need to be able to plan for other responsibilities, including classes, exams, 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.

We know businesses don’t like to be told to raise wages, especially when costs are so high and budgets are tight. If higher wages aren’t possible right now, that’s okay. Employers do have other options.

For example, earned wage access is a strong differentiator in today’s hiring market and can help greatly with employee retention. This is because many hourly workers live paycheck to paycheck.

Instead of having to wait for pay day, workers can access their earned wages when they need them most, which helps them avoid high-interest credit cards and predatory payday loans. They don’t have to wait a week to get that flat tire fixed or to replace their car battery when they have on-demand access to wages they’ve earned.

Now, let’s look at 5 things employers should not be doing in 2024.

5 things employers should avoid doing in 2024 in light of the labor shortage

a photo of two managers calculating labor expenses

Here’s what we think employers should avoid/stop doing right now and in 2024:

1. Don’t invest in hiring bonuses

“Employers in retail and restaurants should not, except in special circumstances, be investing in hiring bonuses in 2024,” says Audrey.

“With applicants failing to show on day 1 or 2, the employer is likely just throwing money out the door.”

(The obvious exception is of course referral bonuses, which have actually been helpful for many businesses.)

Instead, employers should be rewarding employees for good behavior they want to see every single day, such as consistently arriving on time or making it X number of days without any absences.

Small perks and bonuses can go a long way toward making employees feel valued and increasing their loyalty toward your business.

And if you can’t invest in perks right now, that’s okay. What you can do is invest a few minutes of your time each week to personally say thank you to employees who have been reliable.

Also, do your best to accommodate their availability requests when they have them – they’ll remember that you made that effort.

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. This tip was true in 2022, and it’s still true today.

Employers who engage in this practice are essentially shooting themselves in the foot because employees inevitably find out about the difference.

“Raise the pay rates for your existing staff first before you hire new workers at those rates,” he says.

And by the same token, try to avoid hiring from outside the company if you can.

It’s worth reiterating this point because outside hires not only cost more and take longer to train (and time is money), but they can agitate your existing workforce.

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.

We understand this will probably take some time. The company will need to align on its core values and communicate those in a way that grabs the attention of younger hires.

The point is – start now. Don’t put it off, because if you do, your competitors will surely benefit.

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 and happy 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.

From hiring interview to termination, employers should do their best to maintain a favorable impression, even if the employee turns out to be a poor fit or moves on to a different job.

5. Don’t retain toxic employees

While Erik says employee retention should still be a priority in 2024, employers shouldn’t be afraid to let go of team members that aren’t a good fit with the company culture or who are dragging other team members down.

Yes, even in light of the labor shortage.

“One toxic employee can undo all the retention efforts directed at other employees,” he explains.

For example, an employee who consistently arrives late or fails to show up for work despite repeated warnings can create a lot of resentment among team members who pull their weight – and have to pick up that other employee’s slack.

Just remember tip #4. Even when terminating the employee, you should do your best to treat them professionally. It’s not always that they mean to be toxic; they might have a lot going on outside of work or may not be in the best health.

Make sure to reference the employee handbook and demonstrate clearly how the employee failed in their responsibilities. If it makes sense to do so, let them know that they can re-apply in the future when they’re in a better position to perform their work duties.

By keeping it professional and cordial, you can help mitigate any damage that might otherwise come from a resentful employee who doesn’t mind taking a hammer to your company’s reputation.

Takeaways for dealing with the labor shortage in 2024

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.

Remember: culture is still king in 2024.

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.

If you’d like help with any of the tools or processes we mentioned in this article, don’t hesitate to reach out or sign up for a demo of our software. We’d be happy to show you how you can improve employee retention and efficiency in 2024 and beyond.

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