What is needed to recruit and retain staff in the narrow market?

The global labor shortage has forced companies around the world and in various sectors to struggle to fill vacancies. Over the last two years, supply has been affected by the Great Resignation, as workers leave jobs in staggering numbers and lack of migration due to travel restrictions.

But what are companies around the world doing to fill the gaps in the workforce? Frequent responses include increased wages and increased investment in technology that allows staff to spend more time doing work.

Japan struggled with an aging population and low birth rates before the pandemic. Its population is the oldest in the world, with 29 percent aged 65 or over. There is a shortage in various sectors, with particular pressure on nurses as the national workforce shrinks and more and more people need care. The health ministry said in July that by 2040, nearly 690,000 additional nurses would be needed to meet growing demand. But nearly 60 percent of nursing homes say there is already a shortage, according to a study by an industry consulting group.

Sompo Holdings, an insurance group that entered Japan’s care sector in 2015, hopes digitalisation will help. In 2020, he invested $ 500 million in Palantir, a Colorado-based data analysis group, with the idea of ​​maximizing its technology to build a data platform collected from more than 280 Sompo nursing homes in Japan.

Ken Endo, president of Sompo Care, the nursing division, believes the technology will reduce paperwork, allowing staff to spend more time caring for residents. In Japanese society, the responsibility for care has traditionally fallen on families. This has led to low wages and a lack of a training system in the care sector, according to Endo, who is “surprised to see an industry that is so reluctant to train people.”

A waste management officer collects a trash can on a street in Oakland, California
The American sanitary group Waste Management has started to implement partially automated waste trucks that do not require drivers to empty the bins themselves © San Francisco Chronicle / Getty

Sompo responded by setting up training centers and programs. Combined with pay increases, this has helped attract and retain talent. The turnover of employees, once more than 20 percent, is now 11 percent, with more graduates joining the company each year.

The American sanitary group Waste Management also turned to technology amid the country’s great resignation. About 4.5 million American workers left their jobs in November alone, the labor department said earlier this month. This was the highest “exit rate” since it started in 2001. Data show that the majority left their jobs after receiving better offers.

Waste Management has said it has begun implementing partially automated waste trucks that do not require drivers to empty the bins themselves. “We are no longer competing only in the waste industry [truck] drivers, ”said Tamla Oates-Forney, its chief HR officer, noting that the company must compete for staff with people like Amazon and Walmart.

Long-term pressure

U.S. business leaders say they do not see a reduction in labor pressures in the short term as the existing workforce ages, immigration remains low, and millions of Americans who left the labor force during the pandemic show no signs of returning. The newly discovered willingness of many workers to leave their jobs is an obstacle for employers, who say that high turnover makes it impossible to maintain constant levels of staff.

The effectiveness of bonuses and hiring tricks such as car and cash offers that US employers relied on earlier in the pandemic has faded, forcing companies to re-evaluate who could do their job.

The communications consulting company Hotwire has begun recruiting account managers with no technology experience for its US offices, although this sector is the company’s main market. “We can’t take the same approach we used,” said Heather Kernahan, its chief executive.

The food company JBS is trying to attract employees who are no longer interested in long-term warehousing by offering educational and housing benefits while working for other careers. The company has launched a program that funds college training for employees or their dependents, even if their training leads them to a career outside of JBS in just two years.

“I think for many of our part-time workers, despite our efforts, the work is just work for them,” said Chris Gaddis, human resources manager at JBS USA.

Recording vacancies

The United Kingdom had a record 1.2 million vacancies in the three months to November 2021, and more than half of companies that reported a shortage of workers said they were unable to meet demand.

According to the Institute for Employment Research, a think tank, the UK labor market has been the busiest in at least 50 years. The pandemic has moved closer to the UK leaving the EU, which has exacerbated the shortage. However, Russell Beck of Imagine Think Do, a human strategy consultancy, said the pandemic had “intensified a trend that was already evolving”.

An analysis by the London School of Economics of how British business is responding to shortages shows that about a third have raised wages and about 20 per cent are investing in new technologies.

Simon Roberts, CEO of UK supermarket group J Sainsbury, said that “as a result of the challenging operational moments of the last 18 months, we had to be really agile and adaptable”.

In tackling the shortage of truck drivers, for example, he said the retailer had “taken radical steps to make sure we have the capacity on the road to transport products”. These efforts include higher wages and offering retention payments. Sainsbury’s also increased the pay of employees in all Sainsbury’s and Argos stores. Other companies, such as Aldi, the supermarket, and Pret-a-Manger, the sandwich chain, also raised wages.

The shortage is also met by rising wages in professional sectors such as banking and law. The legal industry is also targeting temporary staff following a boom in mergers and acquisitions that has increased workloads – deals worth more than $ 5.8 trillion have been negotiated globally in 2021, 64% year-on-year growth – and higher rates of dropping out due to factors such as exhaustion.

However, Beck, who is also a spokesman for Vistage, a leading network, added that raising wages was only a short-term solution, as its effects quickly faded. “Money is a bit like lip balm,” he says. “Our lips are cracked, they feel a little sore, I need a little lip balm. But it’s running out, so I need a little more. ”

He added that if someone resigned and offered a salary increase to the employer, “all statistics show that about 80 percent of people still leave within six months.”

Edward James, owner of a high-end hair salon of the same name on its premises in Westminster
Edward James, who owns three hair salons in south-west London, spends more on training and development © Charlie Bibby / FT

Edward James, who owns three hairdressing salons in south-west London, has 75 employees and wants to focus on staff retention. He spends more on training and development. “It’s all right to pay people a higher salary,” he says, “but we need to improve people’s skills.”

After Brexit, he saw a decline in European candidates, adding that the industry was known to be bad for “burning staff” and that the number of trainees in hairdressing had declined.

It is also unable to sponsor staff from other countries, as hairdressing in the UK is not considered a ‘skilled’ job, which contrasts with countries such as New Zealand and Australia, where a hairdressing qualification is a legal requirement.

So far, his salons are well-equipped, and James says he takes care of spending time at all three sites: “I know everyone who works for me,” he said. Interns in the gym attend courses at local colleges, complemented by more in-house training due to the “huge difference” in standards between colleges.

Beck says tackling the skills shortage “will be really difficult” for small and medium-sized businesses.

Eric Scheve, vice-president of the French Confédération des Petites et Moyennes Entreprises (Confederation of Small and Medium-sized Enterprises), agrees, saying that in France two-thirds of SMEs find it difficult to hire.

The pandemic has exacerbated existing labor shortages in sectors across Europe such as IT, construction and health. Hotels and restaurants in France lost about 237,000 employees between February 2020 and 2021, according to the Directorate of Research, Research and Statistics of the French Ministry of Labor.

Achieving balance

Wage increases and other benefits are offered to attract and retain hotel workers. “There is a need to adapt working hours, raise salaries and make students want to join hotel schools,” said Julia Rousseau, founder of the consulting firm Ethique RH.

Spending time off work during the blockade has led many non-social workers to question their routines, Rousseau said. She has helped many chefs and kitchen helpers to change their lives, and among those who remain in the industry, many are attracted to “dark kitchens”, where food is prepared only for delivery, with a predictable number of orders.

In Paris, a growing number of high-end restaurants are closing on weekends. Others work part-time or use different teams for lunch and evening shifts.

Michelin-starred chef Guy Savoy was already closing his eponymous restaurant two and a half days before the pandemic to allow his staff to rest, and he believes the practice, plus the salaries it offers and the strength of its brand , have helped him stick to them.

“It’s wiser to close an extra day and keep the same team,” he said. But he admits that not every business can afford it. A long-term solution? “The education system must emphasize that manual professions are as important as academic professions.

Additional reports by Jonathan Ellie and Domitil Allen.

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