As we approach 2023, labor shortages and resignations continue to impact the US economy and job market. According to the US Bureau of Labor Statistics (BLS), 10.7 million positions remained open in June 2022 while roughly 4.2 million employees resigned; job vacancies remain high as talent demand continues to outweigh supply (US Job Openings from Bloomberg, August 2022).
Recruiting and retaining talented employees is a constant priority among employers. But talent has quickly become among US employers’ scarcest and most valuable commodities. Companies are finding it more difficult to protect their existing talent pool, let alone fill roles that remain open. These trends are broadly putting business performance at risk.
How are US companies coping with labor shortages?
US companies have had to change course as labor shortages persist. Many companies have shifted some focus from recruiting new employees to retaining their existing talent as they find themselves competing for talent on all fronts.
Among other roles, the demand for talent recruiters is high as a result. There are currently more than 40,000 unique job openings for recruiters in the US, and the demand for recruiters made up 0.4% of the 10.7 million US jobs available in June.
The competitive nature of the labor market also has increased recruiters’ workloads, resulting in a more widespread desire to resign. A recent report shows that 77% of high-ranking recruiters are open to changing jobs (Recruiters Are Burned Out article from Bloomberg, July 2022).
Rising demand for compensation and benefits specialists
Companies now recognize that in the tight labor market, a more specialized approach is necessary. They are aligning their management strategies with labor trends to better retain employees as a result. This includes adjusting internal compensation, benefits, and mobility tactics to retain employees who might otherwise seek out better jobs.
In fact, the demand for compensation and benefits specialists in Q2 2022 rose to 23,500 jobs; an increase of 32% compared to Q2 2021, according to Textkernel’s Jobfeed tool (Figure 1). Demand for these roles has surpassed demand for other jobs since Q3 2021 as well.
A closer look at the demand for employees in these categories shows that the most in-demand jobs in Q2 2022 were Benefits Manager and Benefits Specialist roles (Figure 2). This reinforces the idea that companies have prioritized benefits as a way to attract and retain talent.
|Director of Benefits and Compensation||919|
The highest demand for these benefit roles appear to correlate with high competition of certain industries. The Professional, Scientific, and Technical Services field has the highest demand for compensation and benefits jobs (Figure 3). Followed by the Finance and Insurance industry which likewise has a high number of vacancies for new compensation and benefits staff.
These industries in particular have a highly skilled labor base that’s difficult to acquire under normal circumstances. This gives skilled workers an even stronger upper hand in demanding better compensation and benefits. Additional reports show that US companies will raise employee pay by an average of 4.1% over the next year (CFODive, August 2022).
US companies also are taking steps to become competitive by making work more flexible for employees. While 86% of US companies are hiring employees at the higher end of salary ranges to attract talent, 84% of companies also are increasing work location flexibility to help retain workers (wtw, August 2022).
Offering more generous benefits
Leading companies are demonstrating their resolve in these areas. PwC, one of the world’s largest accounting firms, is offering more generous benefits as a result of these challenges. The firm recently announced they will invest $2.4 billion to retain staff and compete amid a shortage of accountants and ongoing turnover. Personnel at PwC now can take 12 weeks of paid parental leave and choose from a more streamlined menu of benefits, among other options (NA Employers Rethinking Work and Reward Programs from Bloomberg Tax, May 2022).
In order to implement these new compensation and benefits policies, PwC has posted a number of job openings online, specially with Compensation and Benefits specialist positions in mind. In fact, this is part of a broader trend. As the accounting industry has been particularly hard hit by labor shortages, all of the Big 4 accounting firms, including PwC, Deloitte, KPMG, and EY, have many openings for Compensation and Benefits specialist positions.
Making data-driven decisions
Organizations challenged with recruiting and retaining talents may benefit by taking action to address the labor trends discussed above. One effective way to accomplish this goal is to use data to better understand the labor market. This approach enables a firm to stay competitive and differentiate itself in the hiring market, retain employees, and attract new candidates.