What does it take to recruit and keep employees in a tight market?

Global labor shortages have left companies around the world and in sectors struggling to fill vacancies. Over the past two years, supply has been hit by the Great Resignation, as workers leave their jobs in large numbers and lack migration because of travel restrictions.

But what are companies around the world doing to fill the labor gap? Common responses include increased pay and increased investment in technology that allows employees to spend more time getting work done.

Japan is grappling with a old population and low birth rates before the pandemic. Its population is the oldest in the world, with 29% age 65 years or older. There are gaps across sectors, with particular pressure on nursing as the national workforce shrinks and more people need care. The Department of Health said in July that nearly 690,000 additional nurses will be required by 2040 to meet growing demand. But nearly 60% of nursing homes say there is already a shortage, according to a survey conducted by an industry advisory group.

Sompo Holdings, an insurance group that entered Japan’s care sector in 2015, hopes digitization will help. In 2020, they invested $500 million in Palantir, a Colorado-based data analytics corporation, with the idea of ​​maximizing its technology to build a platform with collected data. from Sompo’s more than 280 nursing homes across Japan.

Ken Endo, president of Sompo Care, the nursing unit, believes the technology will reduce paperwork, allowing staff to spend more time taking care of residents. In Japanese society, the responsibility of caring traditionally rests with the family. According to Endo, this has resulted in low wages and a lack of training in the healthcare sector.

A Waste Management Agency employee collects a trash can on the street in Oakland, California
U.S. sanitation group Waste Management has begun rolling out partially automated garbage trucks that don’t require drivers to empty themselves © San Francisco Chronicle / Getty

Sompo responded by establishing training centers and programs. Combined with salary increases, this has helped attract and retain talent. Employee turnover, formerly over 20%, is now 11%, with many college graduates joining the company every year.

The American waste management corporation has also turned to technology in the context of the country having to give up a lot. About 4.5m The US Department of Labor reported earlier this month. That’s the highest “quit rate” since it began tracking in 2001. The data shows that the majority left their jobs after receiving better offers.

Waste Management says it has begun rolling out partially automated garbage trucks that don’t require drivers to empty the bins themselves. “We no longer compete in the waste industry just because [truck] Tamla Oates-Forney, the company’s chief human resources officer, said the company is competing for staff with companies like Amazon and Walmart.

Long-term pressure

U.S. business leaders say they don’t see the pressure to ease in the near-term, as the existing workforce ages, immigration remains low and millions of Americans leave the workforce. During the pandemic there is no sign of a return. Many workers’ new found willingness Leaving their jobs is a stumbling block for employers, who say high turnover makes it impossible for them to maintain consistent staffing levels.

The effectiveness of recruitment bonuses and Advertisement tricks such as car and cash offers that American employers relied on earlier during the pandemic have run out, forcing companies to reevaluate who can do their jobs.

Communications consulting firm Hotwire has begun recruiting account executives with no tech experience for its US offices, even though that area is the company’s core market. “We can’t take the same approach that we used to,” said Heather Kernahan, chief executive officer.

Food processing company JBS is trying to appeal to employees who are no longer interested in long-term warehouse jobs by offering education and housing benefits as they work toward other careers. The company has launched a program that sponsors college training for employees or their dependents, even if their education leads them to a career outside of JBS within as little as two years. .

“I think that for some of our hourly production workers, despite their best efforts, the job is just a job,” said Chris Gaddis, head of human resources at JBS USA. work for them.

Record vacancies

Great Britain had a record 1.2 million job positions in the three months to November 2021, and more than half of businesses reporting labor shortages said they were unable to meet demand.

According to the Employment Research Institute, a consultancy, the UK labor market is at tightest in at least 50 years. The pandemic has converged with the UK’s departure from the EU, further compounding the shortage. However, Russell Beck at Imagine Think Do, a people strategy consultant, says the pandemic has “amplified an already broken trend”.

One analysis by the London School of Economics on how UK businesses are dealing with shortages said around a third have raised wages and around 20% are investing in new technology.

Simon Roberts, chief executive of UK supermarket group J Sainsbury’s, says that due to “challenging operational moments over the past 18 months, we have had to be really nimble and adaptive”.

To address the shortage of HGV drivers, for example, he said the retailer has “taken radical steps to ensure that we have enough capacity to move products”. These efforts include higher wages and provision of maintenance payments. Sainsbury’s has also increased employee pay across all Sainsbury and Argos stores. Other companies, such as Aldi, a supermarket, and Pret-a-Manger, a sandwich chain, have also raised wages.

Shortages are also being met with increases in wages in specialist areas such as banking and law. The The legal profession is also turning to temporary staffafter the M&A boom increased the workload – transactions worth more than $5.8 billion worldwide in 2021, an increase of 64% year-on-year – and higher attrition rates due to factors such as burnout.

However, Beck, who is also a speaker for Vistage, a leadership network, added that a raise is only a short-term solution because its effects quickly wear off. “Money is like lip balm,” he said. “Our lips are chapped, it feels a bit sore, I need some lip balm. But it will wear out and so I need a little more.”

He added that if someone resigns and the employer opposes the offer of a raise, “all the stats show that 80% of people are still leaving within six months”.

Edward James, owner of an upscale hair salon of the same name on his premises in Westminster
Edward James, who owns three hair salons in south-west London, is spending more on training and development © Charlie Bibby/FT

Edward James, who owns three hair salons in south-west London, employs 75 staff and wants to focus on employee retention. He is spending more on training and development. “It is all very well to pay people higher wages,” he said, “but we need to upskill people.”

After Brexit, he has seen a drop in European applicants, adding that the industry is notoriously bad for “staff burning” and the number of hairdressing trainees has plummeted.

He also cannot sponsor staff from other countries because hairdressing in the UK is not considered “high-skilled” work, which is in contrast to countries such as New Zealand and Australia, where by Hairstyling license is a legal requirement.

His salons are all well staffed now, and James says he makes sure he spends time in all three locations: “I know everyone who works for me,” he says. . Salon practitioners attend courses at local colleges, receiving more on-the-job training due to the “big difference” in standards between colleges.

Facing the skills shortage challenges “will be really hard” for small and medium-sized businesses, Beck said.

Eric Chevée, vice president of France’s Confédération des Petites et Moyennes Entre Enterprises (Confederation of Small and Medium Enterprises) agrees, saying that in France, two-thirds of SMEs are having difficulty hiring.

The pandemic has exacerbated existing labor shortages in sectors across Europe such as IT, construction and healthcare. Hotels and restaurants in France lost some 237,000 employees between February 2020 and 2021, according to the French Labor Ministry’s Bureau of Research, Research and Statistics.

Create balance

Salary increases and other benefits are offered to attract and retain hotel service employees. Julia Rousseau, founder of recruitment consulting firm Ethique RH, said: “There is a need to adjust working hours, increase wages and make students want to join hospitality schools.

Rousseau believes that spending time away from work during the shutdown causes many workers with uncomfortable working hours to start questioning their habits. She has helped transform many lives of chefs and cooks, and among those who stay in the industry, many are drawn to “dark kitchens” where food is cooked for delivery in predictable numbers of orders. before can.

In Paris, more and more upscale restaurants close on Saturdays and Sundays. Others are reducing work hours or are using different teams for lunch and evening shifts.

Michelin-starred chef Guy Savoy closed his eponymous restaurant for two and a half days a week before the pandemic, to allow his staff to rest and believe in the practice, plus the salary he gives and the strength of his brand, has helped him keep them.

“It makes more sense to end an extra day and keep the same team,” he said. However, he also admitted that not all businesses can meet this. A more permanent solution? “The education system needs to emphasize that crafts are just as important as academic professions.”

Additional reporting by Jonathan Eley and Domitille Alain.

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