"Stop Complaining About Not Hiring Faster and Better, If You Are Not Willing To Pay More and Better" - 02/23/22 Edition
Stephen Says Column
We are desperate to hire new salespeople and to fill many other openings throughout the company. I am the CEO of a privately owned, fairly large furniture manufacturer. We have a good HR department and we even have our own internal recruiters. If HR feels they cannot handle the recruiting needs internally they have a budget to hire outside recruiters - employment companies like yours and others. I thought we were doing everything right, but “openings” are lingering for six months or more! I need your advice.
Most of the sales positions we are hiring are because of growth – that’s the good news - but there is a percentage of sales and sales management positions open where we are replacing people who were poached away and, in some cases, people we terminated. And that’s a whole other issue that I won’t get into now, keeping under-performing people past their expiration date because we are so desperate to have someone, anyone, to get a certain job done or cover a specific geographic territory. Aside from sales jobs, we have even more openings in the factory and at headquarters. It is beyond anything we have had before, due in part because of Covid and due in part to the an underlying change in job-seekers attitude; the employee is the seller, the employer is the buyer, and it’s a seller’s market.
We’re also facing the challenges of rampant absenteeism due to Covid along with supply chain issues for furniture component parts we get both within the US and off-shore. No, I’m not talking about exotic computer chips, I’m talking about basic stuff like drawer slides, wood components and finishing materials. All this has doubled our lead times which will soon have an effect on our bottom line. I’d be more worried, except every one of our competitors is having the same problems and delays.
It is not always that employees are sick with Covid, but their kids may have been exposed at school or a spouse may have Covid and then our employee is home quarantining with them all resulting in people not being able to come to work. In field sales and in our showrooms – those “customer facing” jobs – some people are just quitting due to Covid fatigue. All this affects our production capabilities, so we are down personnel everywhere, and it increases my need to hire.
We are a big company and I think we pay as good as our competitors and our benefits are as good as most, but we have a hard time getting candidates to say “Yes” to an offer. HR has hiring requestions open for more then six months. Before I completely shake up my HR department, I thought should I ask how common this is, and is there something I am missing?
Help Desperately Wanted!
Dear Help Wanted,
We hear these questions from our clients and from business owners at all levels. It happens at dealers and manufacturers alike.
There is something you can do - everyone can do - to speed up hiring. It will cost you now, but in the long term grow your business, and help you retain employees. It’s very simple for companies of all sizes to run with these initiatives.
Outsmart your competitors by offering a “sign-on” bonus and covering all of your employees’ medical expenses. And that is just a start. Increase the days and flexibility of your vacation/sick days and PTO (Paid Time Off) plan. Inflation is up over 7% so your base salaries should be up double that!
Stop using words like “incentive” and give your employees, both new hires and existing, better base salaries. (I tell our clients: BBS!) How do you expect to attract quality people if you are not offering better wages and benefits than your competitors? Never mind offering free lunch and snacks to your employees, give them free medical and dental and eyeglass care. That is what employees tell us they want most. With most of TVG’s European clients the medical for the employee is free, why not American companies? The employee appreciates it as an unbelievable benefit and, if they have a family they want covered, they understand they will have to pay part of that cost as a payroll deduction. And here’s an edge that I’m sure your people are aware of but it can’t hurt to remind them: medical benefits paid for by the employer are not taxable. Consider that for many people, free medical is better that a raise.
And a little more about the sign-on bonus. If you really want someone, isn’t it worth it? It is a one time payment, it’s not the same as a salary increase. Worried, there’s a risk that you lose the bonus money it if the person leaves? Pay the “sign on” bonus at the end of the first year but write it in to the offer! A sign-on bonus is a cheap tactic to attract a new employee to say “YES” so go for it, Mr. Big Shot! You cannot keep saying you pay well if you really do not. You do not want to be paying and offering the same benefits as your competitors, you want to be better! Bold hiring moves attract the best people. Talk is cheap. Stop talking and start paying. And I give this same advice to our dealer clients, where it is very tough to recruit. Why? Because you all pay the same way. Break out and be creative. Offer more and chances are you will be able to hire fast and better.
Every day someone calls this company and tells me they want to hire us but they need to hire FAST (in all Caps!). They tell me how great their company is, great products, great company culture, and how much potential commission someone can make.
I explain to Mr. Manufacturer or Mr. Dealer (or Ms.) that candidates are not enticed to new jobs by future incentives, they’re worried about the here and now, and the way to get them is to give them a better medical plan, a better PTO schedule, and raise the base salary beyond inflation.
So, you want to hire FAST? Buck the system. Shake up your HR department if they are not telling you what I am. Don’t be the same as your competitors. Hiring FAST can be done, but it will cost you.