As U.S. economic growth continues, business for many industries is returning to pre-pandemic levels. But labor shortages driven by the pandemic are a growing challenge for companies looking to meet rising customer demand. Today, there are approximately 4.6 million workers missing from the U.S. labor force due to employer shutdowns or cutbacks driven by COVID-19, according to the Bureau of Labor Statistics.
The good news is that businesses can likely expect an increase in available workers, as those sidelined by COVID-19 begin to re-emerge. In NH, the seasonally adjusted unemployment estimate was 2.9% in June, down from the year prior (10.3% in June 2020), according to NH Employment Security. Data from the Bureau of Labor Statistics shows key economic indicators for NH, including the labor force participation rate and unemployment rate, are near pre-pandemic levels, with similar trends being observed in other New England and Mid-Atlantic states.
Staffing shortages are expected to be a persistent challenge. Now is the time to plan for this new world of work, which includes hybrid schedules, wage growth, training, and other critical priorities like workplace safety and Diversity, Equity & Inclusion (DE&I).
Following are five steps companies can take to rebuild their workforces and maximize success:
1. Listen to The Needs of Your Talent
The pandemic has permanently shifted how employees prefer to work and which benefits they find most important.
According to a Morning Consult survey, 39% of workers, and 49% of Millennial and Gen Z employees, would consider quitting if their employers aren’t flexible about remote work. Likewise, workers are demanding more from their employers and the facilities they work in with respect to worker safety, health and well-being.
Employers should engage employees at all levels in return-to-work policies and decisions, so plans are rooted in their preferences. Key areas to consider include more flexible working policies, enhanced benefits for working parents and caregivers, extended paid leave and safeguards to ensure work-life balance. Hold ongoing listening sessions, including surveys and 1:1 conversations, to keep a pulse on employee concerns. Proactively and transparently communicate all decisions and be prepared to adjust policies as needs and circumstances chance.
2. Prioritize Skills Assessments and Trainings
Band of America Global Research estimates that about 700,000 workers left the labor force due to a skills mismatch.
Combined with record disruption driven by the pandemic, reskilling and upskilling the workforce is paramount.
To start, employers should assess how an employee’s job may have changed during the pandemic. Then, invest in ongoing training for employees to boost learning and address expertise gaps. Perhaps it’s a new training in AI or robotics for workers seeing fast disruption in their field, like manufacturing, or a rotational program that enables corporate employees to learn about other areas of the firm.
3. Keep Pace with Wage Growth
A smaller pool of workers combined with strong labor demand is fueling wage growth, and the greatest wage lifts are being seen in roles that experienced the highest demand during the pandemic. Average annual salaries stood at $50,150 in April 2021, up from a low of $47,400 last year, according to Revelio Labs.
In today’s war for talent, employers must provide competitive wages that are in line with a growing economy. Important steps include checking industry benchmarks regularly, reviewing benefits and salary growth plans, and performing company-wide audits to uncover and address pay inequities.
4. Support Financial (and Overall) Wellness
According to Bank of America’s latest Workplace Benefits Report, 62% of employers feel “extreme responsibility” for employees’ financial wellness, up from 13% in 2013. Still, only 49% of employees say they feel financially well today, down from 61% two years ago. This comes as 2020 created new financial challenges for Americans.
In a post-pandemic environment, employers must reimagine employee financial wellness. To start, ensure any program goes beyond retirement, such as rebuilding savings, emergency funds and health care costs. Acknowledge that employee needs will differ. And think about wellness more holistically, recognizing the interconnected nature of financial, physical and mental wellness.
5. Champion Diversity, Equity & Inclusion
The pandemic and racial injustice movements have brought DE&I awareness to an all-time high. Employers agree that offering meaningful DE&I programs is critical to attract and retain talent. Studies have also shown that a more diverse workforce leads to better financial performance.
To attract a new generation of socially minded employees, employers need to “walk the talk” on DE&I with new and expanded initiatives, measurable goals and clear action. Key steps include empowering employees to be part of DE&I workplace programs and discussions; setting near- and long-term goals and communicating a roadmap to achieve them; and implementing DE&I into your company’s broader corporate strategy.
As the fight for talent continues, putting these practices in place will go far in helping companies ensure they have a talented, diverse and productive workforce that can propel them to success.
Ken Sheldon is senior vice president of global commercial banking and president of Bank of America NH. For more information, visit bankofamerica.com.
Current Issue - May 2024