Basic principles of supply and demand tell us that in a candidate-driven market, it is not uncommon for companies to struggle to attract and retain talent; for some organizations, a candidate-driven market can make it feel like the talent pool has dried up entirely.
Even when hiring managers and corporate recruiters do successfully attract professionals to their organizations, companies still run the risk of high churn rates. Simply chalking up low talent turnout to a candidate-driven market is a dangerous game to play:
- It undercuts your team’s ability to take charge of your business’s future. (Are you planning to put your business goals on hold until the market changes?)
- The market is not the issue! Yes, employment market trends can make it more difficult to find (or retain) employees, but it’s not the root cause. (If you’re hiring strategy is strong, it works regardless of the market!)
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The Year That Changed Company Culture
Along with changing employee expectations over things like work format, flexible hours, and pay expectations, 2020 also took a toll on company culture.
In a pre-pandemic world, mostly in an effort to attract younger talent, organizations worked diligently to create in-office cultural improvements meant to increase employee production, attract new talent, bolster employee satisfaction, and ultimately, retain their employees.
But now that most individuals are working from home, the break room’s ping-pong table is collecting dust and Potluck Fridays aren’t quite cutting it. In this new normal, professionals are following the money.
Competitors, Calls, and Carrots
Even if you’re confident in your compensation package and how much your employees love working for you, now is not the time to rest on your laurels. Last year, we all learned the hard way that nothing is guaranteed. But what's the one thing that a professional can count on? The salary they negotiate for themselves.
Even if your employees love working for you, they’re still more likely to take a competitor’s call to explore their options -especially if your competitors are dangling a bigger paycheck as a carrot. If the corporate recruiter on the other end of that call is a good salesperson, you may find yourself having to put together an 11th-hour counteroffer to try to court back your top performers.
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Looking for Greener Pastures 💸
Paying competitively not only impacts your organization’s ability to retain its current employees, but it impacts your ability to attract new ones, too. Although salary will always be king, other aspects of compensation have lost their teeth when it comes to whether a new employee will accept your job offer.
In the past, professionals would consider your company's work environment, company culture, commute, and team dynamics into their decision-making process. However, if your business has decided to move its operations to the remote world, many of these factors simply don’t matter anymore. As a result, the emphasis on salary now weighs more heavily in the eyes of a job seeker. This, combined with the digital ADD that comes along with living in 2021, means that if you can’t quickly engage prospective employees with your position’s salary as a selling point, you most likely will be missing out on a significant section of today’s talent pool.
The Cost of Turnover
High-paying jobs and employee satisfaction are not mutually exclusive --neither is company culture and a steady stream of quality applicants. In both analogies, the former plays a large role in achieving the latter, but it is not the only factor.
What’s important to remember is that in 2021 paying your current team competitively is an effective strategy to combat employee turnover. In turn, this feeds into retaining institutional knowledge, increasing process efficiencies, and fostering a positive company culture. Combined, these make it easier for your HR team to attract new talent—regardless of whether it’s a candidate or employer’s market.