Looking for workers in a job seekers market? Employers must pony

Texas Compression: A series examining the high cost of high growth in North Texas.

Do you feel like you’re getting less and paying more?

Consider what happened at Ennis Inc., a Midlothian printing company with an annual turnover of $400 million. For the fiscal year ending February, the printer had almost 5% fewer employees and paid 10.6% more in total labor costs.

Ennis still had a significant profit gain, which speaks volumes about the overall strength of the economy. But labor shortages have become a fact of business life, and to retain workers and attract new ones, employers have to make do.

In business surveys conducted by the Federal Reserve Bank of Dallas, more than half of Texas executives said hiring was hampered because candidates wanted a higher salary than was offered.

A laundry service was dangling a $1,000 signing bonus, $25 an hour salary and contribution to a pension plan: “And still very few candidates,” the executive told the Dallas Fed, adding that the vast majority of those candidates didn’t even show up. for an interview.

For job seekers, the old rule of thumb was to try to get a 10-20% raise when changing companies. Today, the salary must be 34% higher than their current salary to entice people to click on online job postings, according to job site Glassdoor.

“People who switch jobs often get a life-changing pay raise,” said Jay Denton, chief labor market analyst at ThinkWhy, a Dallas-based software services company that focuses on the labor market. work. “Their current company may have a great culture and things may have been great there, but they have no idea what they’re worth to other people. Then they get an offer they just can’t refuse.

He has seen recent candidates get raises of 25% or more, sometimes including a promotion. Offers vary widely depending on the employer, industry, and whether overseas companies hire locals for their remote workforce.

Denton’s firm advises clients on salary trends, including how much to offer applicants. In Dallas-Fort Worth, the highest compensation recommendations go to some of the highest-paying job groups: operations, finance, and technology.

The recommended salary in all three areas exceeds six figures and is at least 10% higher than the industry median salary last year.

“That doesn’t mean everyone gets that salary,” Denton said. “But the bigger the gap, the greater the wage pressure on these types of jobs.”

Government work is at the bottom of his list — both in the $41,000 recommended salary and the 0.4% increase over last year’s median. Even if the boss wanted to offer a big pay rise, the government budget probably wouldn’t allow it.

For private D-FW workers, average hourly wages rose 7.1% for the year ended March. That’s roughly double the typical increase in the years before the pandemic. But with D-FW inflation at 9%, many working people don’t feel wealthier, especially if a large portion of the household budget is spent on higher fuel and food costs. Consumer optimism is also near decade lows.

This may help explain the discrepancy in salary expectations. A year ago, only 34% of Texas executives said candidates were looking for a higher salary than offered. Since October, more than 50% of executives have cited the issue in three rounds of surveys.

“Inexperienced workers want too much money,” said an administrative services official at the Dallas Fed. “Workers with resumes I really liked got hired by other companies before I could get interviews.”

The challenge is not just related to hiring; companies must also redouble their efforts to retain current workers.

In February, Texas had 932,000 job openings — the most on record and about twice as many as in the 2010s. Additionally, 400,000 Texans quit their jobs in February, another labor market indicator boiling.

“I’ve never seen so much demand before – so many companies needing to hire in Dallas-Fort Worth,” said Mark Malone, who has worked in the recruiting industry for 25 years and serves as senior regional president. from Robert Half to Dallas.

To attract talent today, the No. 1 requirement is to pay the market rate, he said. A Robert Half survey found that 57% of Dallas companies raised starting salaries and 40% offered signing bonuses.

If it’s hard to compete on pay, employers can try to make up the shortfall by offering remote work, more paid time off, and alternative career paths.

“Whatever benefits you have to offer, put it out there,” Malone said. “You have to sell your business, you have to sell the opportunity.”

Many applicants will receive multiple offers, so employers need to act quickly, he said. They don’t have to skip their usual check, but they can speed up interviews and condense the time frame.

“The candidate shelf life is very short,” Malone said. “If you wait, they’re gone.”

Many businesses, especially small businesses, have not reset pay scales for the post-pandemic world. They have work to do and must act proactively.

“Give your employees raises before they start doing their own research and realize they’re being underpaid for their skills,” Malone said.

To understand how much the labor market has changed, check the unemployment rate.

In oil and gas, one of Texas’ highest-paying industries, the rate has fallen nearly 11 percentage points over the past year. The unemployment rate for leisure and hospitality workers, hard hit by the pandemic, has halved.

In April, the healthcare and financial sectors both had unemployment rates around 2%, reflecting a shortage of available talent.

Texas Oncology, a Dallas-based private practice with 6,200 employees, currently has more than 400 openings. He’s hosting a Saturday job fair in Dallas and using other strategies to attract candidates while focusing on employee retention.

The company’s “high retention” efforts include recognizing and rewarding nurses; strengthen collaboration; simplify paperwork; and get testimonials from patients about their cancer care.

“It’s really important that we create an employee experience that differentiates us from others,” said Elizabeth Spurlock, director of human resources. “We can help employees see how the work they do every day relates to our mission and vision. What are those moments that matter to a nurse, insurance examiner or medical assistant? »

The company has increased the number of town halls to improve communication. It offers bonuses for obtaining certifications, remote work for those who can take time off from the clinic, job sharing and flexible hours, including four days of 10-hour shifts, he said. she declared.

But the biggest motivator is the ability to provide quality patient care: “Higher pay isn’t necessarily a silver bullet,” Spurlock said. “It’s a piece of the puzzle.”

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