The war for talent continues to plague businesses into summer 2021. Just one year ago in April and May, we saw unemployment rates in excess of 20 percent. Today the national unemployment rate is 6 percent (March 2021). Even with the high levels of unemployment, and more than one year after the pandemic began, many employers continue to report labor shortages and hiring difficulties. The extension of state and federal unemployment benefits continues to hinder employers’ ability to staff seasonal workforces.
Weekly state unemployment benefits run anywhere from $275 a week in Alabama to $790 a week in Washington. Now add in the federal unemployment benefit of $300 per week, and you have individuals earning between $575 and $1,090 a week. This is the equivalent of $14.38 to $27.25 per hour. Although this benefit is less than the federal unemployment benefit of $600 a week provided last summer, it is still a significant amount for people to walk away from, leaving employers struggling to find workers.
Recruiting in today’s environment is tough. Thus, it’s time to get creative and compete for talent through the following approaches:
Understanding the impact of the federal unemployment benefit of $300 for seasonal hires
Intensifying your recruitment activities
Implementing a “significant” employee referral bonus
Offering additional pay for hard-to-fill positions
Enhancing employee benefits
Focusing on what differentiates your business from your competitors
Seasonal Hires and the Federal Unemployment Benefit of $300
One approach to attracting applicants is to let them know that, because of the seasonal nature of the work, they may still be eligible to receive a small portion of their state unemployment benefit. What is important to note is that individuals who earn less than their maximum weekly benefit through the state will continue to receive the $300 federal unemployment supplement. At this point, people are not willing to give up a weekly supplement of $300 for a seasonal position. Finding ways to inform applicants that they may remain eligible for a portion of their state unemployment and all the federal unemployment benefits while taking on seasonal work is a key strategy to hiring your seasonal help.
Intensify Your Recruitment Activities
One thing I strongly recommend is identifying one employee who is responsible for overseeing and managing your entire recruitment process. Having one point of contact will ensure timely follow-up and communication with applicants. As we all know, the early bird catches the worm.
One thing that we have seen in this economy is the first job offered is typically the one accepted. It is all about the response time. That is why it is so important to have one person managing the process. This is not to say this person should be the only one involved in recruiting. Interviews and hiring decisions may still be made by management; however, there should be one person managing the process, reviewing applications, following up with applicants, and maintaining timely communications with individuals in the pipeline.
Another approach is to provide applicants with a snapshot of what the pay looks like for the position for which they are applying. It is important to illustrate what the potential earnings might look like so that you’re communicating the total pay potential. Besides hourly rates or piece rates, show other incentives you’re offering, such as mileage reimbursement, on-the-job training, logo gear, free breakfasts or lunches, incentives, and other on-the-spot bonuses. Make it visual. Do the math for people; make it easy to understand so that applicants can compare your snapshot of total pay to their current earnings. Apples to apples.
Employee Referral Bonuses
Employee referrals remain your best recruitment source. Overall, 61 percent of employees have referred at least one employee and sometimes more. Employees typically refer people who will do a good job and reflect positively on themselves. Did you know that employee referrals are four times more likely to be hired?
The Society for Human Resources recently shared research stating 45 percent of employees sourced from employee referrals stay with an employer for four-plus years, versus two-plus years for employees sourced through other recruitment channels.
Employee referrals are huge opportunities for employers. Competing for labor with an employee referral bonus of significance is key. I recommend a significant bonus because a $50 or $100 bonus is not enough to incentivize people to delve into the recesses of their minds to find candidates to refer. If you want to incentivize your employees to spend time thinking about possible referrals, make it worth their time by offering an employer referral of $250 or more. There are several companies in the industry that are currently offering up to $500 for employee referrals.
You may gasp at $500, but remember how much it costs to hire employees. It is not just about the cost of job postings or the cost of background checks. The main component to your cost per hire is the cost of your employees’ time. Think about the time your team spends posting positions, reviewing applications, calling applicants, scheduling interviews, meeting with applicants, and conducting follow-up. When you add the cost of the time that your team spends on the recruitment process, more often than not it will exceed $500.
You need not pay out the employee referral all at once; however, ensure that employees receive a timely payment upfront to continue to incentivize them to refer more employees. For example, if you offer a $500 employee referral, you might consider a payment schedule such as $100 after the employee’s first month of work, $150 after the employee’s second month of work, with the remaining $250 at the end of the season.
One last note on employee referrals: you do not need to pay the same referral fee for all positions. At a time like this, when demand is high and supply is low, you may want to pay more for those hard-to-find and hard-to-fill positions.
Offering Additional Pay
Offering additional pay as an incentive is becoming common these days to attract and retain seasonal workforces. Listed below are key inducements I see companies offering in an attempt to staff appropriately.
Offer a hiring or sign-on bonus
These bonuses are making a comeback as a competitive practice. Offering someone $500 to take a job may just be the incentive they need to sign on the dotted line. You can and should focus your hiring or sign-on bonuses on employee retention. One approach is to take the $500 and divide it by the number of weeks in the season and provide the employee with additional pay each pay period. For example, if you’re hiring a housekeeper for a 10-week season and offer them a sign-on bonus of $500, you could pay it out at $50 a week. You could also treat it like the employee referral and pay someone a portion upfront, another portion at mid-season, and a final payment at the end of the season.
Increase seasonal wages with temporary adjustments
Remain competitive with piece rates and hourly rates. When a position is in high demand, you might want to offer a temporary premium rate for specific days, shifts, or other hard-to-fill times. Offering shift premiums is a way to incentivize people to show up to work on key back-to-back days. For example: offering a shift premium of $3 per hour equates to $24 a day for someone working an eight-hour day. Right now, it is all about the money when it comes to attracting seasonal hires.
Some companies in the industry have found success by offering an incentive for each property cleaned. For example, for each property cleaned, employees get an additional amount ranging from $10– $25. It is important to communicate that the additional incentive is dependent upon certain criteria such as cleanliness scores, guest reviews, or other metrics you have in place.
Consider retention bonuses
When you think about a sign-on bonus, its intent is to incentivize someone to sign on with your company. You may also want to offer a retention bonus to employees who stay with you through the entire season. A retention bonus is a great way to retain workers. You could base the bonus on a monthly amount, such as $100 per month, or you could pay a set amount such as $300 at the end of the season. As with the other bonuses and incentives, it is important to tie the bonus to metrics to ensure that the new employees are meeting and exceeding your performance metrics.
Raise wages for hard-to-fill positions
It’s simply supply and demand: the more demand for the positions, the higher the rate of pay. You may want to consider adjusting your pay rates to meet market demands. For positions in high demand, such as housekeepers, inspectors, laundry cleaners, maintenance techs, and other skilled laborers, you can pay a premium. If you end up providing a premium for a position, I would do it as additional pay. For example, if you were hiring an inspector at $13 per hour and wanted to pay them $15 per hour, I suggest keeping the pay rate at $13 per hour and providing additional pay at $2 per hour. This way the pay rate remains consistent throughout your company, and you can increase or decrease the premium as supply and demand changes.
Enhance Your Benefits
Another sure way to attract and retain talent is to enhance and communicate your benefit offerings.
Today, one of the most important benefits to workers is flexibility with their schedules. Some people may only want to work one day a week instead of three days a week. Find ways to accommodate more flexible work schedules.
Paying your seasonal employees weekly is a competitive advantage. If you’re paying biweekly, consider increasing your pay frequency to weekly or setting up a weekly payroll for seasonal employees.
When recruiting for seasonal talent, think about transportation. There’s a population out there who may not have a driver’s license or a vehicle to get to and from work. Or there may be a workforce available 100 miles away. Think about how you might provide transportation to bring people to you. Hiring a driver, renting a shuttle bus, or whatever it takes may still outweigh being short-staffed through the season.
Housing is the biggest conundrum for employers today in travel destinations. Finding ways to house employees is another competitive advantage. Some companies are expanding their laundry facilities with a second floor to provide discounted lodging. Others are taking homes off the market to provide housing to workers. Companies close to universities and colleges are seeking space in dormitories to house seasonal workers. Other companies are providing a stipend for housing assistance to retain employees in the area.
Employee assistance programs (EAPs) have become popular over the last 15 months. An EAP is a voluntary, confidential program that provides your employees (and management) with access to counselors for personal or work-related concerns, such as stress, financial issues, legal issues, and family problems. Since COVID-19, these are the kinds of things that your managers are dealing with on a day-to-day basis outside their normal job responsibilities. Offering an EAP for your employees will reduce some of the personal or work-related concerns that your managers may not be fully equipped to deal with.
Focus on What Differentiates Your Company
Focus on what differentiates you from the company down the street so you can clearly articulate your advantages to applicants. Think about your culture, the different opportunities (e.g., year-round, full time) and the training you provide, flexibility with schedules, and incentives and employee bonuses. What is it that you do differently than your competition that attracts people to come to work for you? Figure this out, then communicate it through your job postings, job descriptions, and snapshots of pay (total pay illustrations) at every step during the applicant’s interview process.
Finally, remember random acts of kindness go a long way with your employees. Providing food to go, logo gear, and on-the-spot recognition with gift cards will go a long way toward engaging and retaining your seasonal workforce.