It’s happening. America is reopening, and like a sprawling field of bright red poppies the post-Covid consumer is bursting with a renewed self-expression and ready to dance again experts say. Which is great news for the economy and business owners, except for one thing, finding willing workers is tough right now.
Back to the Future – office
As the massive U.S. Covid-19 vaccination roll-out campaign to date has already inoculated more than 100 million Americans, Harvard Business School Online sponsored a recent survey which asked 1500 home-bound workers how they felt about going back to the office after one year (March 2020 – March 2021). Turns out the results didn’t surprise anyone. 81% said they “prefer a hybrid schedule or not going back at all.” And only 18% said they wanted to return to the office full time. That’s less than 1 out of 5. Why? Too many workers adjusted to a life working from home, and they like it. And many simply don’t want their old jobs back. At least not the old way and are asking themselves: Why risk going back, getting sick when I’m safer at home and still getting paid?
But it’s still not a utopia. Rumblings can be heard and widening cracks seen in the stay-at-home castle wall fortress. Lack of social interaction among peers, reduced networking options, and “Zoom fatigue” are among the growing issues that have only recently given some restless home-gamers second thoughts, and thus willing to hear a good back-to-the-office pitch.
To make matters worse adding to the widespread labor shortage are millions of laid off cave-dwellers suffering from the same maladies. Paid more at home collecting pandemic unemployment and stimulus checks, these unemployed hordes have shown little interest in getting back to work while the free money rolls in. And it’s expected to stay that way unless employers can grab their attention.
So, what do workers want post-Covid?
For starters they want every employer to recognize and have adapted their business practices to take every reasonable safeguard and precaution to protect employees from Covid. Anything less is a non-starter bringing into focus for employers a resounding obvious truth to a post-Covid workforce. After a year at home, employed or unemployed, workers need some serious motivation. And if you’re an employer desperately in need of staffers to service increasing sales post-Covid the message is loud and clear, go big or go home. Sound familiar?
In January 1914, in an all-out effort to stem worker turnover at the plant in Dearborn, Michigan and to incentivize new workers to join the payroll, Henry Ford doubled his automobile assembly line worker’s daily wage from less than $2.50 to $5.00/day. A shocking increase at the time. But it worked. Fast forward a hundred years later in April 2021 Jack Flanigan owner of the famous Crab Shack restaurant near Savannah, Georgia is so desperate for workers as the local news there reports that he’s offering new staff a $3,000 sign-on and stick around bonus. They need workers he says. And it’s working. In fact, new sign-on bonuses are popping up everywhere, on job boards too. ZipRecruiter for example saw a 50% increase in April topping 2.5 million help wanted listings with the search title: “Covid sign-on bonus.” SimplyHired saw a similar increase in the last 30 days.
With countless more Covid incentive stories emerging each day, pulling together the latest insights suggest that having the “right” new incentives can help motivate a growing restless home-bound couch-dweller back on his feet and rearing to go if you need one. But as every situation is different you’ll have to find your sweet spot by experimenting in what specifically works for your business model and the competitive landscape. Nevertheless, according to my research some companies are pulling out all the stops, while others are still asking employees what they want. The resulting middle ground incentive programs being tossed about by employers to lure workers back will give you some idea of what you’re up against:
- New-hire and Return-to-Work bonus, or vaccination bonus
- “Hybrid” office/home flex-work schedule
- Demonstrate anti-Covid work environment with all co-workers vaccinated and taking protective measures: social distancing, PPE, testing, tracing, and contingent plans. All designed to send an unmistakably clear message that the workplace is a Covid-free comfort-zone secured by a new employee-employer bond of trust
- Increase fringe benefits and healthy habit perks from foods to fitness
- Increase post-Covid bonus pay-to-stay
- Reaffirm team commitment to health and community
Essentially, employers will need to throw a lot of money at workers in the short term. Trouble is for some industries like food, hospitality and travel that already report being hit hard by lockdowns and worker shortage problems simply can’t afford to pay more in wages and benefits. Pre-Covid pressures to increase minimum wage levels across many states to $15/hr aka to “a living wage” was tough enough. Couple that with a new return-to-work post-Covid additional cash bonus requirement and the resulting double whammy may be the final straw and force many companies to cut hours, or shutter permanently.
As of now, finding enough workers is a growing challenge across all industry segments and may get worse before things settle back down in 2022 economists forecast. And hopefully not because of a recession. Until then it makes sense to stay well informed and act decisively. If you need workers now, be creative about how to attract them. Also be sure to consider often over-looked employee candidates including those with minor criminal offenses (background check exceptions), immigrants that require employer-sponsored work visas, and older workers. By contrast these are each among the eager prospects, able and willing.
When the music stops
Alternatively, you could try and wait it out, because you figure, at some point when the music stops and the Covid cash machine runs dry millions of current consumer couch potatoes, like hibernating bears after a long cold winter, will need to find work if they want to eat, consequently flooding the job market in mass. And thus, this begs the final question; how can we get a better sense of when the gravy train will actually run out of steam and compel these sleepy bears to re-enter the labor force in America?
A quick look at the free stimulus cash flow checks distributed to families and workers since the pandemic began may provide the answer. To-date as of May 2021 Americans impacted by the virus have received 3- waves of stimulus checks from the government worth trillions of dollars.
The first wave of $1,200 checks per adult (more with dependents) was sent out April 2020 after the CARES act passed. This followed by the second wave of $600 checks for adults starting in December 2020. And finally, most recently on March 10th 2021 Congress passed the $1.9 trillion American Rescue Plan, a third wave of Covid stimulus payments of up to $1,400 per adult earning less than $80,000/yr.
While state unemployment checks keep rolling in
Adding more money to the mix significantly each state is currently piling on the unemployment benefits to millions of workers impacted by Covid. Normally unemployment benefits last for 26 weeks. But many can apply for a Pandemic Unemployment Assistance extension which can add an additional 29 weeks. All told collectively given federal and state assistance workers have about one year of paid time off with many earning as much or more at home than they earned at work. So, when will it end? Let’s do the math.
If workers were laid off last summer in 2020, and the cash runs out roughly 12 months later they might need to jump back into the job market very soon. In fact, recent weekly jobless claims dropped to a new record pandemic low, suggesting that workers are slowly coming back. Something to think about as employers consider which re-hire or new-hire incentives will catch their eye.
What to do now
My advice is simple. Pay now or pay later. But don’t just sit on your hands. If you need more staff now and you don’t offer any incentives at all, how will your employees respond to a market awash with grass-is-greener temptations from other employers? Still. At some point within the next 12-24 months labor markets and back-to-work hybrid models which are running by trial-and-error right now will identify key trends and ‘best practices’ including which incentives do work and which don’t. Until then, re-define post-Covid what your company will need to win the day, not just today but in 3 years’ post-Covid time. Paying “up” now for the best people who can demonstrate a strong commitment to your company’s mission and passion for quality customer service is always a good thing. These workers are an investment, not a transaction. Make that clear and you will attract better long-term workers, not the ones looking for flashy over-the-top car-dealer bonus incentives to get off the couch and drag themselves back to work. Remember. What comes around goes around.
Written by Rick Andrade.