Facing Historic Hiring Struggles, Companies Need To Rethink Recruiting

Across industries and business sizes, companies are facing immense challenges with recruiting and hiring workers right now. According to GetApp’s Recruiting Strategy Survey*, a majority of U.S. employees with recruiting responsibilities tell us they currently have more job openings than usual, and that those openings are taking longer to fill. The situation is bad enough that 56% of those surveyed fear they have job openings at their company that they’ll never be able to fill.

To understand why so many companies are struggling with hiring right now, and how you can fix your company’s recruiting strategy and get back on track, we collected survey responses from 300 recruiters in the U.S.

What we learned is that scapegoat excuses such as unemployment benefits don’t tell the whole story of the labor shortage, that the COVID-19 pandemic has had a lasting effect on job seekers’ needs and priorities, and that you’ll need to completely rethink your recruiting strategy to compete for talent.

Though the U.S. economy has made a substantial bounce back after the devastating effects of the COVID-19 pandemic last year, recent data from the Department of Labor reveals that there are a million more job openings than people looking for work. Even as companies raise pay at the fastest rate in nearly 40 years, roles remain empty.

As a result, businesses are feeling a real pull on their bottom line. Recruiters in our survey say challenges with recruiting and hiring this year are leading to delays in the delivery of their products, cancelled projects, reduced operating hours, and even a decline in product quality.

In the short term, restaurants, hospitals, tech companies, and more are trying to plug in the gaps as best they can. In addition to the 16% of recruiters that say their company is outsourcing certain roles, 27% say they are focusing more on hiring contingent workers this year, including contractors and freelancers.

But the labor shortage is also causing companies to consider radical solutions that would significantly alter their operations. As a result of ongoing hiring struggles, 69% of recruiters in our survey say their organization has already, is planning to, or is considering eliminating roles altogether and replacing their function using automation and technology.

So what is causing this labor shortage that is forcing companies to consider such drastic measures? And why aren’t traditional solutions, such as raising wages, solving the problem? 

A common source of blame has been more generous unemployment benefits, prompted by the signing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The logic is that if people are getting more money to not work, they’ll be less enticed to find a job. But studies from both the federal government and Yale University have debunked this theory, finding that the $300 a week that unemployed workers are receiving through September 6, 2021 has had a marginal effect on labor supply at best.

The reality is there are four bigger issues that explain why many workers are leaving their jobs this year, and companies aren’t able to backfill them: 

• “The Great Resignation”: Citing reasons such as burnout, a need for flexibility, and the desire to pursue a different career, a record 4 million people quit their job in April 2021. A study by Microsoft found that 40% of employees are considering quitting this year.

• A growing mismatch between jobs and job seekers: 48% of job seekers are frustrated with not being able to find the right jobs for their needs. 41% believe there aren’t enough openings in their preferred profession. 

• A fear of COVID-19 is still out there: One in five unemployed people with a college degree and one in four without one cite COVID fears as the top reason why they’re not urgently searching for a job.

• Childcare responsibilities are taking priority: 20% of lower-wage workers are staying home due to care responsibilities.

If you’re a frustrated recruiter right now, the good news is that some of these issues will resolve themselves on their own soon. Unemployment benefits will end. The COVID-19 situation will improve. Schools will reopen permanently for in-class learning.

The bad news is that some of these issues aren’t going anywhere. That means, in order to compete for talent today and in the future, you’ll need to alter your recruiting strategy to address the changing priorities and obstacles of job seekers.

The COVID-19 pandemic has changed how businesses operate permanently, and that’s no less true in recruiting. The job seekers going into the pandemic are not the same ones coming out of it. Even the jobs themselves have changed. 

As a result, you need to overhaul your recruiting strategy to match the new reality. Let’s take a peek at our survey responses and a few other data sources, and look at five ways you should alter your recruiting strategy to attract today’s talent.

1. Lower or remove unnecessary job requirements

Despite being one of the easiest and most cost-effective ways to get more job applicants, only 16% of organizations have lowered or removed job application requirements this year, according to our survey. 32% haven’t even considered it.

When there are plenty of qualified job seekers to choose from, you can afford to be stringent with your application requirements. In a labor shortage? Not so much. If you find yourself struggling to get enough applicants for a specific role, now is the time to review your job listing requirements to see if any are creating any unnecessary barriers.

One such requirement that’s being scrutinized heavily right now is college degrees. With two-thirds of U.S. workers lacking a bachelor’s degree, and plenty of more affordable options available for people to obtain important knowledge or skills (e.g., mentorships, boot camps, certification programs), companies are rethinking the need for a degree for certain roles. Tesla, Google, and Netflix are just some of the high-profile employers that have dropped four-year degree requirements in recent years.

Simply lowering experience requirements and streamlining skills needs can make a difference as well.

2. Offer benefits that alleviate job seekers’ pain points

In order to compete for a limited number of job seekers, you need to reevaluate the perks and benefits you offer as a company to ensure they not only meet job seekers’ expectations, but stand out from your competition. Benefits shouldn’t be frivolous though; they need to provide real relief for current pain points to entice people to the organization.

Here are three under-the-radar benefits you should consider to help your company stand out in the current labor market:

Commuter benefits

Before the COVID-19 pandemic, employees were spending a record amount of time on the road to get to work. They were also spending a lot of money on their commute—between $2,000 and $5,000 in transportation costs annually that disproportionately affected lower income households. 

So if your organization plans to have employees commute to an office or other workspace long-term, a commuter stipend that employees can use on public transit or ride-sharing services can be a recruiting game-changer. It lowers gas and car maintenance costs, potentially frees up a vehicle for a spouse or other household member, and gives workers some time on their commute to relax or get work done.

While only 21% of companies offered commuter benefits this year, according to our survey, recruiters at companies that offered commuter benefits rated recruiting as 20% less difficult on average compared to those at companies that didn’t offer commuter benefits.

Child care benefits

The COVID-19 pandemic has compounded the pressure on working parents, according to a study by Pew Research Center:

• 52% of employed parents with children 12 or younger said in January 2021 that it has been difficult to handle child care responsibilities during the pandemic—up from 38% who said this in March 2020.

• Among parents who are working remotely all or most of the time and have children younger than 18, nearly two-thirds (65%) say they have at least some child care responsibilities when working from home, including 26% who say they have a lot.

Another survey by Northeastern University found that 26% of women who are unemployed during the pandemic are due to a lack of child care. 

Like it or not, child care is a critical business issue. Any relief that your employer can offer in this area—a child care stipend, enrollment in daycare, even a more flexible schedule for parents to take care of children—can make a big difference in job seeker attraction and worker satisfaction long-term.

Despite being offered by less than a quarter of businesses in 2021 in our survey (21%), we found that recruiters at businesses who did offer child care benefits rated recruiting as 13% less difficult on average compared to those at companies that didn’t offer them.

Pet insurance

According to the American Pet Products Association, 12.6 million U.S. households have gotten a new pet since the beginning of the COVID-19 pandemic. A welcome companion during the lonely days of remote work, these new members of the family nonetheless represent a growing source of stress and costs for U.S. workers. A survey by LendEDU illustrates this clearly: 45% of pet owners are spending the same or more on their pet’s health care than their own, with 20% actually going into debt caring for their pet.

By offering pet insurance to your employees, you can attract new pet parents and give them financial peace of mind in the event of an emergency vet visit. Though less than half (47%) of employers offer pet insurance currently, 69% plan to offer this benefit by 2022 or later. Implement this soon to get a competitive recruiting advantage.

3. Give people ownership over where they work

The COVID-19 pandemic has given a lot of workers a taste of what it’s like to work from home, and now there’s no turning back. Companies hoping workers will happily return to an office at some point are in for a rude awakening. In our June report on hybrid work, a majority of small business employees (53%) told us they are moderately or extremely likely to consider looking for a new job if they aren’t allowed to work from home at least part of the time.

Source: Despite the Challenges, Small Businesses Are Embracing Hybrid Work

For some roles and industries, there’s no way for employees to be able to work offsite. But wherever possible, you should offer some ownership to employees over where they can get work done moving forward. If you don’t, expect to lose a lot of great candidates to competitors.

Though only 36% of companies in our survey have allowed employees to work from home this year, recruiters at those businesses rate recruiting as 12% less difficult on average compared to those at companies that don’t let employees work from home.

But why stop there? By hiring employees that are fully remote, you not only give job seekers full flexibility over where they work, but you also immediately widen your recruiting net from the immediate area around your company headquarters to anywhere in the country, if not the world. 

With 65% of remote workers saying they want to remain fully remote after the pandemic, you should consider expanding your company’s remote work program after COVID-19 (instead of reducing it) to reach a lot more candidates and improve hiring outcomes. From our survey, we find that less than a quarter (22%) of organizations have hired fully remote employees this year. Recruiters at those companies say recruiting is 10% easier on average compared to those at companies that don’t hire fully remote employees.

4. Target candidates from underserved labor markets

Although the lack of qualified job seekers seems like an unavoidable dilemma, it really has more nuance when you dig under the surface. Even in a labor shortage, there are untapped sources of job seekers that can prove to be incredibly valuable if you know where to look and who to target. 

One such source: older workers. A study looking at 2020’s economic downturn found that, while people of all ages suffered unemployment issues due to the pandemic, those aged 55 or older lost their jobs sooner and were rehired slower than their younger counterparts. Facing age discrimination, these older workers remain underemployed; and with many delaying retirement due to financial concerns, the Bureau of Labor Statistics (BLS) projects that workers 65 or older will be the fastest-growing segment of the workforce through 2024. Despite this, only 21% of recruiters in our survey say they’ve focused more on recruiting older workers in 2021.

To effectively reach these candidates, consider the following: 

• Remove ageist language and images from job listings

• Offer benefits that appeal to older workers

• Utilize resources such as The American Society on Ageing’s Career Advantage job board

Another group that is being overlooked is workers with disabilities. Though a vast majority of those with disabilities are not in the labor force, BLS data from 2020 found that those that are able to work were more likely to be unemployed than those without a disability, even when controlling for age and education. Between March and August of last year, one in five workers with disabilities were laid off compared to only one in seven in the general population.

Our survey data supports that companies aren’t doing enough to reach these candidates: Only 21% of recruiters say they have focused more on recruiting workers with disabilities in 2021 compared to previous years. With a majority of accommodations for workers with disabilities costing nothing, and the rest costing $500 or less, this is a no-brainer group to give your recruiting attention.

Lastly, you should reevaluate your recruiting strategy regarding job seekers with criminal records. While 26 states and Washington D.C. have passed laws barring employers from asking applicants if they have a criminal record, many still allow it; and if you’re immediately dismissing candidates who have a criminal background, you could be missing out on great employees. 

A 2018 study found that, despite stigmas against workers with criminal backgrounds, these employees tend to stay at jobs longer and quit less often than other workers.

5. Leverage software to improve the candidate experience

Despite being an important tool that can improve recruiting processes and the candidate experience overall, only 27% of recruiters in our survey say they have an applicant tracking system (ATS):

The candidate experience—the ups and downs that job seekers have as they go through your company’s recruiting process—is a critical factor in securing top talent. 69% of job seekers who have a bad candidate experience with a company say that not only would they reject a job offer, but they would rarely or never apply to that company again.

Using ad-hoc tools can create a frustrating digital experience for job seekers. Who hasn’t quit out of a job application midway through because they got tired of having to enter the same information multiple times? At the bare minimum, you need to have a good ATS to smooth over common candidate pain points:

• An ATS can help you customize the job application workflow, give applicants multiple options for applying, and cater the process to multiple devices (computers, smartphones, etc.).

• As applications come in, you can use your ATS to schedule interviews and track the status of applicants in their pipeline—ensuring no candidate is kept in the dark on where they stand.

• Interview scorecards and offer letter automation can ensure interviewers are on the same page, candidates are graded on the same criteria, and offer letters are sent immediately when a hiring decision has been made.

Recruiters can customize their workflows to provide their optimal candidate experience in JazzHR (Source)

As bleak as the hiring situation seems right now, there are reasons to be hopeful. As we’ve shown, some job seeker obstacles will disappear as the COVID situation improves. More people will start looking for work when they’re not worried about their health or taking care of a child.

But more importantly, there are several things you can do today to better attract and recruit today’s job seekers. Whether it’s lowering job requirements, letting people work from home, taking a closer look at job seekers with disabilities, or implementing an ATS, there are still plenty of ways for businesses across sizes and industries to adjust their recruiting strategy to better compete for talent. Take control of the things you can control now so you can overcome current labor shortages and benefit in the long run.