Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. An important part of running any business enterprise is recruiting and retaining talented staff. Doing so often requires competition for qualified individuals. The following contributed post is thus entitled, Low Unemployment Levels: How Can Your Business Compete For Staff?
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For business owners, the unemployment rate of a country is perhaps the strangest of all the economic indicators. On the one hand, a low unemployment rate is undeniably good news; more people are in work, thus more people are paying taxes and – importantly for businesses – that means there are more people who will be spending money on goods and services.
On the other hand, a low unemployment rate can be rather troubling for businesses.
Why can low unemployment be a problem for businesses?
Essentially, the more people that are in work, the harder it is to recruit and retain staff.
If unemployment is high, staff recruitment is relatively simple; there is a large pool of – often highly qualified – potential employees to choose from. Furthermore, existing staff are also more likely to stay in their existing job, as they are aware there is more competition for other roles.
However, if unemployment is low, the pool of potential employees diminishes. Worse yet, businesses can find that their existing staff are more likely to leave, as competing businesses begin to offer tempting deals to attract highly qualified, experienced workers.
As a result of the above, low unemployment levels are something of a double-edged sword: it’s good news, as there are more consumers looking to purchase goods and services, but the bad news is that companies may lose, or struggle to recruit, staff – which, in the worst case scenario, could mean that businesses cannot take advantage of the beneficial boost in consumer spending.
What are the current trends for unemployment levels?
Unfortunately – or, in some ways, fortunately – analysis shows that unemployment is low across the globe; not quite at pre-financial crisis levels, but the trend is definitely in a downwards direction.
What does this mean for businesses?
Essentially, low global unemployment levels mean that businesses now find themselves having to actively compete to both hire and retain the right staff for their company. What’s more, this competition is a truly global competition; so even if business owners wanted to try to hire overseas workers due to low unemployment at home, they are still likely to struggle.
How can businesses compete for staff in the current environment?
If you are a business owner, this question is by far the most crucial – and so below, we’ve sought to answer it, by providing a list of five tips that can help you both hire and retain staff even when unemployment levels are low.
#1 – Provide written employment contracts
Written employment contracts have fallen out of fashion in recent years, with employers preferring “at will” contracts that are more flexible – the employee can quit whenever they choose, and the employer can dismiss the employee at any time, provided their reason for doing so is not illegal.
However, written employment contracts are definitely beneficial for employees, as they offer robust job security. Prospective employees will be attracted to any job posting that provides a long-term, formal written contract, while existing employees will be less likely to leave a job with a written contract, especially if other employers will only offer “at will” contracts. As a result, written contracts mean that everyone benefits: your staff enjoy security, and your business’s ability to hire and retain staff increases.
#2 – Shorten probationary periods for new employees
Probationary periods are tough for new employees, causing a kind of ‘suspended animation’ – they might have a long-term job, but they also might not. This uncertainty is generally disliked, especially for probationary periods that stretch for up to six months.
Realistically, a three-month probationary period provides plenty of time to assess an employee’s skills and ensure they are suitable for the job. Alternatively, if a role is particularly complex and you need longer to evaluate your new employee, opt for a shorter probationary period as mentioned, but then only initially offer an “at will” contract for a longer period. You can then offer a full written contract after a set period, informing any new candidates of this arrangement during interviews.
#3 – Offer retirement benefits
Fuelled by multiple stories in the media about how much of the modern workforce tends to be unprepared for retirement, many people have made retirement benefits a specific focus when considering their career options.
To keep pace with workers who factor their post-career life into their present-day working concerns, it’s best to look for a specialist company that is experienced in providing group retirement planning and similar services, then formulate a customized plan that is suitable for both your business and your employees. Furthermore, when your plan is in place, advertise this fact in your job recruitment adverts and on your website to catch the eye of prospective employees.
#4 – Allow remote working
Over the past ten years, remote working has moved from a rather odd concept that few businesses implemented to a mainstream norm. There are two reasons in particular for this change: technology advancements have made remote working more viable, and secondly, employees simply like having the opportunity to work from home rather than having to commute to an office every day.
It is also worth noting that, in addition to attracting and retaining employees, remote working is actually beneficial for businesses, too – so there really is every reason to consider making a change.
#5 – Break away from the weekday/weekend structure
A conventional working pattern is five days “on” and then two days – usually Saturday and Sunday – off. Unfortunately, this working pattern may be well-established, but it’s far from beloved – which means you could seize the opportunity to do something different.
For example, you could consider switching to a four-day week, wherein employees work for 10 hours Monday to Thursday and then enjoy a three-day weekend. Alternatively, you could move to a rotating pattern; for example, employees work for seven days in a row, then have seven days off. A huge number of employees will embrace these innovative working patterns, and your business doesn’t need to suffer: employees will still, across the course of a year, work the same number of hours – just arranged a little differently than has been seen as “normal”.
Low unemployment levels can be detrimental for businesses due to their impact on the ability to hire and retain staff. However, with the measures above, you should be able to ensure your business enjoys only the positives of low unemployment; a rise in workload and custom, which in turn results in higher profitability overall.