Dive Brief:
- More than eight out of 10 U.S. companies find hiring and retaining professional and office workers extremely difficult and a bigger challenge than employing manual service workers, the Conference Board found in a survey.
- Professional and office workers “are now significantly harder to both find and retain than just one year ago,” the Conference Board said Thursday, noting that 84% of companies surveyed “are struggling to find talent” compared with 60% in April 2021. Eight out of 10 (81%) of companies face difficulty hiring manual service workers.
- “Over the last few years we’ve seen headline after headline focus on dwindling supply of manual and trade services workers,” according to Robin Erickson, vice president for human capital at the Conference Board. The survey “reveals that office and professional workers have become a scarcer commodity.”
Dive Insight:
CFOs and their C-suite colleagues, facing the tightest labor market in years, have sought to hire and retain staff by raising pay, expanding benefits and approving remote work for a record proportion of their employees.
Business and government raised employee compensation 4.5% during the first quarter compared with the same period in 2021, a higher increase than the 4% annual growth during the fourth quarter, the Labor Department said on April 29. Meanwhile, the cost of benefits rose 1.8% during the first quarter, faster than any quarter since 2004.
Demand for workers far outstrips supply. Organizations reported 11.3 million job openings in February but only 6.3 million Americans sought work, the Labor Department said.
Churning in the labor market is intense. The quits rate, or the number of workers who left their jobs as a percent of total employment, returned to a record 3% in March, matching the November and December level, which is the highest rate since 2000, according to the Labor Department.
While boosting pay and benefits, companies are also giving employees more flexibility in deciding where they work, the Conference Board said. Nearly half of organizations (49%) are willing to hire “fully virtual employees,” compared with just 8% before the pandemic.
Nine out of 10 organizations allow hybrid work and six out of 10 give employees the option to work remotely all the time, while only 4% require full-time, on-site work for everyone, the Conference Board said.
Remote work can apparently help the bottom line — six out of 10 (62%) of companies whose employees work primarily outside the office said productivity has increased since the start of the pandemic, the Conference Board said.
“To remain competitive, companies should further leverage hybrid and remote-office work arrangements,” Erickson said.
Employees also quit because of low pay, no opportunities for advancement and a feeling of disrespect at work, according to Pew Research Center.
“Those who quit and are now employed elsewhere are more likely than not to say their current job has better pay, more opportunities for advancement and more work-life balance and flexibility,” Pew said in a report.
Workers also cited a lack of scheduling flexibility, inadequate benefits and a desire to move to a different area, Pew said.
Nearly one out of every three workers (31%) who left jobs last year said they did so because of disruption from the coronavirus, Pew said. Child care challenges prompted a high percentage of departures by workers with children younger than 18 living at home.
Neglect of some employee needs may help explain why the Conference Board found that the proportion of companies struggling to retain office workers soared to 64% last month from 28% the year before.
Also, the proportion of employees “identified as being burned out” rocketed to 77% from 42% in September 2020, the Conference Board said.
Also, one out of four of the 175 survey respondents said that trust between leaders and employees has ebbed. All respondents were U.S. human resource executives, the Conference Board said.
