What if I were to tell you that there’s a simple change you can make that could help you hire people faster, and encourage them to stay working for you longer?
It would be timely advice, I think. Because if there’s one thing business owners have shared with me recently, it’s that recruiting and retention are top challenges in 2021.
Let’s go to the numbers: In July, a record 4 million Americans walked away from their jobs. In August, the stats only went up: 4.3 million workers quit, according to the Department of Labor.
While the Great Walk Away primarily took place among lower-wage workers, and especially those working in customer-facing jobs like retail, travel, and restaurants, the truth is that any employer who wants to be the exception to the recruiting and retention difficulty rule right now, will consider changes.
I’m going to assume that you already are willing to pay market rates or higher, and that you’re perhaps doing the math on how to increase pay. That’s smart and timely. But, perhaps it’s time to think about more creative additional options.
Maybe it’s time to rethink processes or structural assumptions so that you really stand out.
Here’s one: What about paying people every day, instead of making them wait for a scheduled paycheck?
Or at least, giving them advanced access to their accrued pay when needed, before it would otherwise be dispersed.
This is a solution that might not appear obvious to many business owners, simply because if you’ve built a business, then you probably have had two other experiences.
- First, you might have gone through tough times when you’ve had cash flow issues, but you resolved them through creativity and maybe even sacrifice. You figured it out, often largely on your own.
- Second, you’re probably at the point where you’ve built some level of financial security. It would be the rare employer who has a significant number of employees, but who also could be knocked sideways by, say, an unexpected $300 car repair bill.
For many of those more than 8 million employees who left their jobs in July and August, however, they’re in exactly that situation. One recent survey from PwC suggests that at least 42 percent of American workers live paycheck to paycheck.
While economists might look at those numbers and conclude it’s irrational for employees to walk away in that case, if you talk with lower-wage workers, you might find a few themes:
- Fear of Covid.
- Childcare costs that can make employment almost revenue-neutral for them.
- A sense that no matter how dire their financial needs might be during the pandemic, working a low-wage job isn’t likely to help that much. It’s like the equivalent of throwing a drowning person both ends of a rope.
“More employees have considered filing for bankruptcy protection than ever before in the 10-year history of our survey and concerns about housing foreclosures have also increased,” according to the 2021 employee wellness survey from PwC.
Now, so far we’ve focused on employers with workers at the lower end of the wage scale–and it’s true that they’re the ones who are most likely to have to fill short-term cash gaps with something like a payday loan, at insane interest rates.
But, employees at all income levels simply like having access to their money.
“Everybody typically thinks it’s just for people making $8 an hour,” said Jeanniey Walden, chief marketing officer at DailyPay, a financial technology company that enables employees to control when they get paid. But their data shows that 15 percent of salaried workers whose employers sign up for the DailyPay platform wind up using it.
They’re using it to cover short-term needs, yes, but also to do things like pay off credit cards to increase their credit scores, or even invest in crypto.
Now, let’s be frank: The things that truly differentiate employers have to do with culture, respect, and sense of purpose. Those are the longer-term goals, and by definition, they’re harder to change overnight.
But, cultural change can be made up of a lot of little decisions like this, indicating a willingness to be responsive, think creatively, and try to make changes that might make life easier for employees on a daily basis.
If you think it might work for your business, there’s probably no time like the present to give it a try.