Have you tried to purchase a vehicle lately? Maybe a home? or anything else for that matter? You might say we are living through what’s known as a seller’s market. Everything marked up and at a premium. When discussing the impact of the pandemic, we use words that describe a dark, gloomy, and all-around difficult time. But there are other side effects that the pandemic is having, which have less to do with your medical health.
I mentioned one of those side effects in my last article being the “Great Resignation” …the “high quit” rate of employees moving from job to job impacting the supply of available labor. Let’s also not forget the “Great Retirement”, with a booming stock market, many individuals qualified to retire, made the decision to exit the labor market before they previously anticipated.
The pandemic has created the tightest labor market in the United States in the past 20 years.
Forcing a shift of power to the employees due to a reduction in the labor supply. So, it’s not just goods that are in high demand and at a premium. There are more help wanted signs in windows than we have seen before. That is why employers must now compete for workers, rather than the other way around.
My message is simple, stop complaining about a labor shortage and make a better offer. If it works for the automotive industry, to markup the buying price of a vehicle 5-10 thousand dollars over MSRP, then isn’t the clear and simple solution to apply the same logic to the labor supply, or to the people employed by companies?
Nothing is that simple...In fact, the conversation only gets more complicated when you start the discussion of union vs non-union. Don’t get me wrong, union companies are not offering better working conditions and wages just because they want to. That is why you have a team that bargains and enforces the contract at every level. One thing I hope employers consider is that workers do not have an obligation to settle for the same inadequate jobs and substandard wages they had before the pandemic. The labor shortage is a game changer, employers must now compete, offering better pay, benefits, and working conditions if they want to remain competitive.
Creating better jobs with higher wages and benefits can stimulate the economy, enabling low- and middle-income families to spend and potentially create more jobs. If employers pay their employees more, the employees will be able to spend more, even in their own shops. Higher salaries are an investment, not only in solidifying a happier workforce, but the fact is there is more money available to come back to the employers. Again, we all food shop, don’t we?
At the bargaining table, we have seen employers across North America understand that it is time to invest in their employees and agree to higher wage proposals than we have seen in a very long time. That is the right thing to do, to attract and especially keep good employees. Dear employers, there is no secret formula, just basic common sense… if you aren’t getting people to come in and apply to work for you, you have to take an honest look at what you are offering. You need to make working for you more attractive to people. And if you want to keep the people you already have, long term, then you need to make their work experience more desirable. That’s it. You are contributing to the same work shortage that you are complaining about. Just pay them more. That is the answer to the Great Resignation and Retirement. You’re not convinced? Ok, let’s take a test. Find an employee that is very close to, and considering retirement, but you don’t want to, or cannot lose them yet. Offer them more money to stay a little longer. If they were on the fence about going or staying a bit longer, what will they most likely say after you offer them more money? There is your answer.
Dear employee, the answers you may be looking for are right before your eyes. Let’s get together and seek more out of the people running your company. The time is now. The market is hot. Don’t wait until the market cools down to sell your house, when right now you can get the best dollar for it. And don’t wait until the market cools down to ask for the highest dollar in your paycheck. It’s the very same principle. The ball has landed in our court, so let’s take the shot and let’s score a victory.