Our economy is on fire from coast to coast in 2017, but virtually all of our clients are facing a major problem; how to attract and retain amazing talent so they can meet the demand for their products and services.
With unemployment at its lowest level in two decades there’s a major shortage of skilled human resources.
So what can be done to combat this perfect storm that has created the tightest American labor market in history?
Our clients are employing three tactics to address this problem. Two are short term measures, and one is a longer term strategy.
We know employee benefits are one of the biggest drivers for attracting and retaining exemplary people. However, one size doesn’t fit all.
We had a client in Texas who calculated they were spending an average of $2,000 per year in healthcare benefits per employee, but a good portion of their workforce didn’t use the company plan.
In an effort to reduce their attrition rate they decided to make the $2,000 available to employees in an a la carte fashion. They could choose to use it for healthcare, or put it towards their 401k or IRA, or paid time off, or an end of year cash bonus.
They discovered many of their people weren’t using the company healthcare plan because they had a spouse with better coverage. Those people were previously under-compensated compared to their peers, and they were also the largest group of people who moved on to other companies. It wasn’t an equitable situation.
Since implementing an a-la- carte benefits program their attrition rate has been cut in half.
We’ve expanded this type of benefits program for our clients across the country including Central Florida. Their results have mirrored our client in Texas who pioneered this idea.
They’re also using their benefits programs to attract new talent. It’s a huge value add over the old take-it- or-leave it benefits that most companies offer.
A second short term approach we’ve seen employed is courting older workers, and retired people who have desirable skills and a wealth of experience. As a bonus, many of these people will work for less because they just want to be engaged.
IBM, Ford and Barclays started actively recruiting older Americans in 2016 and have remarkable success enhancing their work forces in a very short period of time. This is being reflected in their productivity levels and bottom line.
The third strategy, which is a longer term play, has been to reach out to high school students and let them know there are high paying jobs waiting for them without incurring massive college debt.
Two of our clients in Central Florida have programs available to young people where they can sign a five-year contract, start at over $20 an hour, get a free education to become skilled trades, and at the end of the five years make over $35 an hour. They also end up with zero debt, top tier 401k plans, excellent healthcare and high-end skills such as being a tool and die maker, machinist, welder etc.
I have a friend who’s a very high profile doctor in Orlando. He graduated with over $200k in student loans. He’s incredibly intelligent, and stated that he’s kept his skill set up to speed by watching YouTube videos made by his peers, at zero cost. He went on to predict that our college system is on the verge of a major correction, and pointed out several studies that suggest upwards of 50% of American colleges will be out of business within 10-15 years.
Necessity is the mother of invention. Going forward, I predict we’ll see much better employee benefits, less workforce discrimination against older workers, and a paradigm shift in post-grad options for high school students.
My crystal ball also says these three things will play a major role in powering the next period of American exceptionalism.
Exciting times ahead!