Now that things are back to normal, or so they say, let’s take a look at the employment market in this post-pandemic world, as well as what is next.
Earlier in the spring, things started getting back to normal, and the biggest thing that we all realized, besides the supply-line issues, is that now we were faced with this: a huge labor shortage. So, why was this? The pandemic was over, so now what happened to all of these people? One answer is that they found out they could get by just fine with staying home, so they did.
The other reason is, once things started to open back up, there was a huge feeding frenzy with companies seeing a spike in the resumption of business and commerce. A lot of these were the very companies that either furloughed or laid off their employees. These employees either found other jobs, or chose not to go back to work at all. Office workers that were able to work from home and afterwards were not willing to go back to the office. Many office and service based businesses now had to adapt to this new normal.
Competition increased for employees, so demand was up and supply was down, so the price went up. With this, we had to pay more for new hires, as well as increasing wages for our current staff to keep them, not to mention the increase in cost of living (inflation).
There have been a lot of stories of employees leaving their job for more money elsewhere. While poaching others was always frowned upon, this also became a standard practice in this new normal. With many companies having their best employees lured away for more money elsewhere. So, now what? As of writing this article at the beginning of September, I think the labor market will shift from an employee market to an employer market and here is why: In general, all businesses have seen their sales and revenue increase dramatically post-pandemic, to levels that we have never seen. But, did this give us a false sense of security? With inflation also, we have also seen a big increase in sales, but if you factor and adjust for inflation and look at the same period last year, you may find that sales were actually the same, not more.
The economy has been over-heated and it will slow down in the coming months. Companies will also see and feel this as things level off, the ones that are now over-staffed will shed payroll and also be more cautious to hire. This is why I say that the labor market will flip, and we are seeing this starting now. Things should level off and get back to normal (pre-pandemic) levels. With this being said, as hiring has been a struggle as of late, it should and will get better.
On a personal note, as an owner there are two things that I hate. One is hiring, and two is firing. Over the years I have had my share of bad hires, but have been able to build and keep a great crew. Employees are a company’s greatest asset and also it’s biggest expense. What needs to be realized here is the cost of training a new employee and how turnover, besides being so costly, is a killer. This is why being selective is important. If you want to get good people, this is what you need: you need to have a good culture, pay what the job is worth, give them the tools, training, and whatever else is needed to be successful. They also need to feel relevant and appreciated. Everyone wants to have a purpose, and especially with the younger crowd, they want to feel like they are making a difference. Benefits are also important, i.e. health insurance, vacation, retirement plans, and bonuses.
If you want to attract the best, you need to be the best. While money is important, it is not everything. Where to find them: Just as with advertising, the best method is and always will be word of mouth. Your best source of new hires comes from other employees (referrals). If your employees are happy, they will tell others. They will also only refer good people to work with them. This makes your decision to hire much easier. They have basically been vetted out by the one that sent them your way. Others also see this as well. Good companies attract the better people. Bad companies attract the bad apples or the ones that others don’t want. Do you want to have the pick of the litter, or do you want to be the guy that climbs in the dumpster looking for a steak sandwich?
When you hire, you should hire with the expectation that they will be with you for a long time. While currently, younger people tend to change jobs frequently and it’s not like it was in years gone by, I think this will also change. You get what you pay for. Good employees make the company money, while bad ones cost the company money. Remember, cheap ain’t good, and good ain’t cheap.
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ARA Secretary · Northlake Auto Recyclers — Hammond, IN
Hollingshead has been in the professional automotive recycling industry for 45 years, including 34 years as President/Owner of Northlake Auto Recyclers, one of the industry’s leading facilities. Hollingshead prides himself on taking a hands-on approach in the business, employing the use of checks and balances for quality control to ensure customers only receive the highest quality parts. Northlake was one of the first automotive recycling facilities in the state of Indiana to receive from the Indiana Department of Environmental Management the Indiana Clean Yard – Gold Level Certification in 2009. Northlake was certified as one of the Indiana Certified Automotive Recycler Exemplary Standards (INCARES) program’s inaugural medalists and was the highest scoring facility in Indiana in 2014, 2015, 2016, 2017, and tied for first place in 2018. Northlake was also the recipient of the 2016 ARA Certified Automotive Recycler of the Year award, having been nominated by his peers in the industry.