How to Hire When You Can’t Afford to Pay Top Dollar

If there's one thing we’d all like to stop talking about, it’s the Great Resignation. We’re all feeling it, especially business owners and team leaders who are trying to scale their businesses to meet rising demand and finding no shortage of problems, be it turnover, supply chain bottlenecks, or uncomfortably high inflation. Any company that relies on customer service (so pretty much everyone) is cringing over longer waits, teams stretched thin to the point of breaking, shortened hours of operation, and so on.

We can expect retailers and brands this holiday season to experience the impact of the Great Resignation. As though this isn’t enough, for the past year, supply chain issues have also been top of mind. Today, nearly 85 percent of U.S. retailers agree that supply chain issues will further disrupt shoppers. Along with supply chain issues, there will be a shortage of staff in stores. The biggest reason? In part because of the pandemic, people are either living paycheck to paycheck, living off of one income per family, or are out of work.

Companies looking to hire new talent need to incite workers, and providing the ability to be paid earlier on their earned wages will make all the difference. This concept applies primarily to retail/seasonal workers, those being paid hourly. These employees must have access to their wages when they can; their jobs aren't permanent, and living paycheck to paycheck in this economy isn't plausible.

Below are a few ideas on how retailers can succeed this holiday season, including tactics to recruit and retain talent, and the importance of providing earned wages earlier than payday. Most important is the realization that if you’re competing for hourly workers, you’re not always going to win on compensation.

In May, Amazon.com announced that it needed to hire 75,000 hourly workers quickly. To get them in the door; Amazon offered to pay $1,000 signing bonuses for some roles. Big-box retailers, such as Walmart, Target, and Costco, followed suit, promising to raise wages. This summer, McDonald’s hired 10,000 additional hourly workers and promised to  boost wages to $15/hour by 2024. That’s an excellent strategy for global brands, but what about the 88 percent of American businesses that employ 50 people or fewer? If you can’t compete on price, how do you compete?

Another obstacle? Employees are hesitant to return to work. A survey of 312 store managers, owners and executives found that a majority — 64 percent — expect to see a year-over-year decline in employment this holiday season. At the same time, another one in four predicted staffing shortages and unplanned absences that could potentially result in daily understaffing.

There Are Some Things Workers Want More (or as much as) Than Money

The Voice of the Blue Collar Worker, now in its 14^th year, is the most extensive survey of blue-collar workers — this year, it surveyed 15,000 workers. The survey found that hourly workers want a lot of the same stuff that salaried workers do. They want training such as upskilling and reskilling — anything that gives a career momentum, that makes a job feel like a bridge to a better future. They want flexible scheduling and the ability to swap shifts easily. They’re seeking a positive, respectful company culture and a company that shares their values. They want their voice to be heard. They’re loyal to great managers, and they want access to their wages more than just twice a month. They’re seeking earned wage access (EWA or on-demand pay).

EWA is a Simple Technology With a Big Benefit

You can’t snap your fingers and build a dynamic, employee-centric company culture. That’s a long-term project and one well worth taking on (and the only way regular businesses will compete against goliaths that can throw money at recruiting and retention). What you can do now to differentiate your business and steal talent from your direct competition is give workers access to their wages early.

Today, more than 125 million U.S. adults’ live paycheck-to-paycheck. Forty percent can’t handle an unexpected $400 expense without credit (Federal Reserve). Here’s where you come in. EWA gives employees the ability to access the money they’ve earned before their scheduled payday. It’s a relatively new way to pay that no one was talking about two years ago. However, it’s an approach that's wildly gaining in popularity, which makes now the perfect time to lean into it. The pandemic exposed a tremendous amount of personal financial anxiety. Anything a retailer can do to help calm an employee's frayed nerves will go a long way not only in attracting seasonal and ongoing talent, but also in keeping them loyal.

Money May Get Them in the Door, But it Won’t Keep Them

We're living in a time when it’s not always about money. Sure, if you can pay more, you’ll win a few battles for talent, but you may not win the war. Instead, the winners will be organizations that can deliver on the total employee experience: best-in-class scheduling software, paid time off, leave options, equitable and inclusive work environments, cost-effective fringe benefits, and early access to pay. It’s a lot to digest, restructure and reorganize, but it’s not impossible. The outcomes drive greater return on investment and success. So, what will you be focusing on in 2022?

Raul Villar is the CEO of Paycor, a human capital management platform.