There has been a lot of talk about inflation since the passage of the recent stimulus measures injected trillions of dollars into the economy. Workers are demanding higher wages and can do so due to the sharp increase in demand as the economy recovers and with a record number of Americans sitting on the sidelines. Enhanced unemployment was a boon and saving grace for many hourly American workers and families, and with its abatement, many have demanded wages closer to what they received while unemployed earlier in 2021. These demands might not be met if the labor market were not as tight, but with many Americans choosing not to work for a variety of concerns surrounding COVID-19, such as familial responsibilities as schools remain closed or health concerns, the labor market has continued to tighten even as demand increases.
This wage inflation has not been apparent yet for salaried roles but has had a huge impact on the hourly workforce. At Upshift, a company that connects businesses with workers via technology, we compared wages paid to our employees in hospitality roles in July/August 2020 and July/August 2021. We saw an almost 50% year-over-year increase in the average wage for hourly roles as reopening employers compete for a smaller pool of available labor.
This level of inflation presents a unique challenge for employers of hourly employees, but there are a few methods of mitigating these wage increases and finding other ways of attracting and retaining talent if raising pay rates isn’t an option. While having market-matching or outdoing pay rates is essential (especially for private clubs, which need high-quality staff), there are a few other ways that you can solve for the current talent shortage:
Reducing screening requirements. Many companies have screening requirements that have not changed with the times for hourly workers. It is still common for some employers to require a drug screen, reference check and education/employment verification for both their new full or part-time employees and temporary workers. These requirements generally provide little value other than ticking boxes but can reduce the flow of talent significantly.
Take pre-employment drug screening for example. Upshift has found that when companies require drug screening, it significantly reduces the number of applicants they receive. This is not because those applicants who don’t apply are utilizing drugs, but often because a drug screen takes a few hours, including travel to the screening facility and home, and then you must wait for the results before starting the position. When most employers don’t require this, why would you work for the one that does when jobs are plentiful?
Additionally, most drug screens are largely ineffective as they’re only able to detect certain drugs and only if they were used within 48 hours or less of the test. This is easy to game, even without the use of workarounds readily available online. With many positions offering immediate starts and with today’s labor market, few are willing to wait. Eliminating this tedious and ineffective screening measure could boost your pool of talent exponentially without affecting safety as you can still test randomly or based on suspicion after hiring someone.
Increase flexibility. The second method of increasing talent flow, besides raising pay, is increasing flexibility. There is a small pool of people in today’s labor market who are available to work 40 hours per week on short notice, as most people who can and want to work 40 hours per week already have a job. To tap into the latent workforce, employers need to offer flexible hours.
This means allowing people to work full hours on only a few days a week, as well as allowing people to work half-shifts and other creative methods of scheduling. By increasing flexibility, you can access a labor pool not available to those who don’t offer the same level of flexibility, and many people are willing to trade a pay rate increase for a position that works better for their schedule.
Transparency. You should be clear in your job postings what you offer. Call out your pay rate, hours and benefits directly—those are the most important things to employees. Many employers don’t tell someone what they will make, the hours they will work or their benefits until they give them a formal offer, which is not ideal. You should also stay away from offers that can be perceived as insincere, like offering a signing bonus that is received after 90 days. This may get people in the door for an interview, but they won’t stay after they get their bonus unless the rest of the package is competitive.
Trial Periods. Allow applicants to work in their new positions for a few days or a week at a time before committing to a set number of hours. When you allow for this, you can access more of the available labor pool as you can get people who already have jobs to work for you on a flexible basis. If you’re unsure of how to offer trial periods in a way that’s sustainable and scalable for your club, one way to create this offering is by partnering with an on-demand staffing platform. What inevitably happens—if you have a great working environment—is that many of those who came in thinking they would only work a few days end up getting hired full-time after they realize they love working for you.
Partner with a Digital Staffing Platform. Staffing platforms generally have a pool of high-quality talent who would not onboard with a traditional temporary agency or apply to a position directly for a variety of reasons. Staffing platforms are bringing in a wider and more robust pool of talent because they can offer choice and flexibility.
Platforms like Upshift (my company) have tens of thousands of workers available to work on short notice who have already been vetted—and you can see their working history. Hiring through a platform allows you to skip the investment in resume screening and interviews and instead just see how someone does when they are on-site working. When speaking to hiring managers we found that the real predictor of success was how someone did once they started the job, which indicates that the interviews and resume screens are not always a good use of hiring managers’ time.
Choose the Right Staffing Platform
Technology options are overwhelming and choosing an option that is right for your club can sometimes seem like guess work. When choosing a staffing platform, consider the evolution of the market and select one that fits the changing workplace. Transparency, flexibility and accessibility are not only key elements that are important to employees, but also employers. Your platform should allow you to search for talent, understand your costs, tailor your needs to maximize your budget, and communicate the benefits of working with your business all in real time.
The platform should also offer true automation—not simply a portal for manual work. Look for solutions that offer digitally native interfaces that always work for you. These platforms give employers the ability to create shifts that fit clubs’ needs and budgets and also alter them as your demand changes. Employers can see who will be coming to work, their work history, their rating from other employers, and even their email and phone number. This can all be accomplished on the mobile or desktop app without having to wait to hear back from your account manager or representative. The technology you choose should be an actual solution that delivers results and creates value for your business.
See other staffing apps in this Club Director article: https://nationalclub.org/2019/01/10/staffing-apps/.
What’s Next?
Businesses without well-defined employment strategies are bowing to inflationary market pressures and simply raising rates to a point that is not sustainable. However, tactics like the ones mentioned above will provide a roadmap for attracting and retaining talent. It is no longer feasible in many cases for employers to rely on direct hires alone, or simply treat agency labor solutions as temporary. Businesses need a mix of direct hiring and strategic labor partnerships to mitigate the impact of economic and social conditions.
Successful employers will target technology solutions that provide them with the flexibility, function and freedom to operate transparently and in real time to meet their financial goals. Solutions that combine talent, technology and transparency will help ensure that businesses can thrive regardless of the economic conditions.
Steve Anevski is CEO of Upshift, a company that connects people with businesses in need of extra staff. He can be reached at [email protected] or visit upshift.work.