Disruption in Retail and Manufacturing Drives Recruitment Demand
Retail manufacturing is booming as we head into the critical holiday shopping season, primarily because of factors driving robust consumer sales — low unemployment, low inflation, and more disposable income due to rising house prices and a strong stock market.
As retail companies evolve their e-commerce operations, they're focusing more on last-minute delivery, reducing delivery times and making various strides to balance the need to compete with market leaders against the increased costs of e-commerce (e.g., higher returns and more complex inventory). At the same time, distribution/warehousing components are being challenged by higher labor and freight costs. Maintaining this rate of productivity, however, depends on how the industry responds to recruitment challenges.
With the unemployment rate hovering around historic lows and consumer sales increasing, how can manufacturers recruit and retain the talent they need while also managing labor costs?
Historic Labor Shortages
The economy is experiencing a rare circumstance: jobs are being added without a corresponding increase in workers to fill them. For consideration, the manufacturing industry’s unemployment rate decreased 62 percent while the number of jobs added increased 10 percent between 2010 and 2018.
Competing for Workers
In this candidate-driven market, offering competitive wages is a given, but it needs to be supported by a comprehensive workforce strategy that helps quantify the return on investment. Whenever possible, access third-party data such as local market analyses, per capita density reports, market-rate wage data and regional competitors’ pay scales to ensure you’re not under- or overpaying.
Recruiting from a shallow labor pool also involves competing against industries that vie for the same workers, such as retail and restaurants. Manufacturers are challenged to recruit when workers can go down the street to a fast-food restaurant and make more money in what they may perceive as an easier or more flexible work environment. In some markets, workers are quitting without having another job lined up because they know they can get hired elsewhere immediately.
To combat these issues, manufacturers need to present a strong employee value proposition that emphasizes manufacturing’s competitive advantages, such as a regular, full-time work schedule; a shorter path to advancement; and better long-term opportunities.
Once you’ve attracted those workers, you still have work to do — fostering retention begins on day one.
New workers who feel they've been trained thoroughly to do their jobs, not surprisingly, usually acclimate more quickly and voice higher job satisfaction. This is especially important given that the highest attrition generally happens within the first 30 days of employment. Employers should incorporate frequent touchpoints during onboarding and initial training to answer questions and address any issues.
In fact, open communication and feedback continues to be a major driver of worker retention even after the first few weeks. Workers want to have an accurate picture of how they’re viewed in the workplace.
Establishing open channels of communication can go a long way toward helping top performers feel valued — and more resistant to external offers.
Consider what monetary and non-monetary incentives you can provide:
- tenure-related bonuses every few months in the first two years;
- bonuses tied to performance milestones; and
- peer recognition awards and acknowledgements.
Often the same elements that drive employee satisfaction also retain talent in the longer term because employees see opportunity in the future as well as the present.
There’s no question that the hiring landscape is as challenging now as it’s ever been. Creating and implementing a proactive, comprehensive strategy to recruit and retain quality workers today can continue to provide your company with workforce advantages well into the future.
Michael Fitzgerald is the director of strategic sales and operations for retail and chemical manufacturing at Aerotek, a recruitment and staffing agency worldwide.
Related story: Ways to Attract Skilled Talent in Today’s Tight Labor Market