What Employees and Employers Think About Today’s Labor Market

Ask any distributor and manufacturer about their business challenges, and inevitably they will mention their “people” challenges. They are typically talking about being under-staffed as well as not being able to recruit staff.

At the same time, ask employees about their challenges and inevitably you’ll hear people talk about being burnt out, tired, and (in some instances) not feeling appreciated or valued.

The “people” side of the business for many companies is more stressed than many can remember. Yet, at the same time, you can open any industry trade publication and see people moving from company to company – at all levels.

Unemployment is at historic lows and the labor pool has been significantly reduced which has caused:

• The Great Retirement phase that has occurred in some industries
• A desire for work from home
• The “gig” economy
• The resulting number of new LLC’s that have been created
• The unfortunate number of COVID deaths

The labor market has changed but businesses need staff to replace those who retire, those who leave, and support new endeavors. While there is demand, the “supply” (people) has different expectations than ever before.

THE SURVEY

With this as a backdrop, GRN Coastal, a leading recruitment firm for distributors and manufacturers, focused on the construction and industrial markets to better understand the candidate and hiring manager mindset.

GRN Coastal commissioned Channel Marketing Group to perform a study.  Conducted earlier in the spring, the survey was sent to a targeted group of individuals within the GRN Coastal and Channel Marketing Group’s databases.

Overall, 68% were from construction trades, 22% were from “other industries” and 10% were from the industrial markets.

1. Compensation matters, and a silent majority are looking!
2. Work environment matters and companies must “sell” to recruit as well as retain.
3. Today’s recruitment process is quicker and more personal as companies seek to acquire quality

 

THE AUDIENCE

To provide a perspective on the respondent audience:

• 51% were from distributors, 21% from manufacturers, 9% from manufacturer representatives and the remainder were “other”. When “others” were compared versus whom the survey was sent to, most were individuals who are currently “unattached” to a company.  It was expected that distributors would be the largest respondent audience as they employ more sales/management personnel than manufacturers (given that most manufacturers go to market via independent sales agents).
• 37% classify their employer as a large company, 30% as a medium sized company and 33% were from a small company
• 40% of respondents classified themselves as an employee or candidate whereas 60% were in management (HR or senior management).
• 29% of respondents had less than 10 years’ experience, 25% had between 10-20 years of experience, 23% had 20-30 years’ experience and 23% had more than 30 years of experience.

RESPONDENTS SAY – COMPENSATION MATTERS!

For purposes of analysis, rather than segment by company type, feedback was analyzed based upon respondent type – whether they were an employee/candidate versus if they were a hiring manager or in senior management.

WHY DO CANDIDATES LEAVE?

When asked why an individual would consider leaving their company, as expected, financial growth potential is the primary reason, followed by growth potential.

However, the next three most frequently selected reasons related to a candidate’s employer: their boss, the culture of the company, and the future of their employer (which in many instances relates to financial security for the employee).

At the same time, these individuals shared that:

• 35% of them would leave their company for a position that was a lateral
• 76% would change employers for a lateral move that has more upside within the next 12 months – inferring that they are either actively, or opportunistically looking for their next opportunity

Hiring managers were asked a similar question. They were asked to rank what they feel is most important to candidates today.

While compensation ranked number one, by a wide margin, the role of work/life balance and culture, ranked second and third. While these are important, according to candidates, they are not “the driving force” of why a candidate will change roles. Their decision, inevitably, comes down to opportunity and/or a desire to leave their current environment.

This highlights that, to retain employees, companies need to ensure that their compensation values the employee appropriately (either relative to their value to the organization, in recognition of their contribution and/or compared to the local market) and that the work environment is “desired”.

What is a “desired” work environment? It relates to culture, being recognized, and having open communication. It also encompasses the working relationship between the employee and their direct supervisor/management chain. Essentially it comes down to “does the employee want to work for the company”? Do they view it as a “career” or is it a “job.”

 

But, at the same time, candidates know that it is a “tight” market and expect incentives to make a move – 55% expect at least a 15-20% increase in compensation. Conversely, 38% of hiring managers feel that candidates expect a 10% increase in compensation.

Hiring managers are using internal comparable, “industry” standards, local geographic standards, and prior employment payment. Only 49% of hiring managers review sources such as Glassdoor to understand exiting employee’s feedback.

In a market of “tight” supply, there is a disconnect in expectations. It is understandable that companies are concerned about compensating new hires at a different rate then existing employees. However, the market has changed, and candidates are aware of the limited talent pool, and realize that qualified or experienced talent is becoming harder to find.

 

Compensation matters, and many are looking (even if only opportunistically).

 

 

RESPONDENTS SAY – CULTURE MATTERS

Since COVID, many have commented about the role of culture within a company. Survey respondents were asked about the culture they desire, the culture of the companies that they represent and both parties’ views on “work from home”. Some terms that candidates used to describe culture include:

• Fairness
• Engagement
• Accountability
• Actions
• Open to change
• People vs process
• Delivering via actions versus “marketing communications”

When presented with a list of 18 words and asked to choose 5, the top 5 for each set of respondents can be seen on the right. A key disconnect is companies want to promote their teamwork whereas candidates desire an ethical and rewarding environment. Nowadays, an element of culture is expressed to how a company is responding to their team’s desire to work from home.

• Market knowledge
• Company personality
• Shared values
• Enthusiasm
• Focus
• Top-down leadership

For some roles this is not an option (i.e. warehouse workers and drivers), however, for many roles it can be feasible. Further, due to the effects of the pandemic as well as life changes, many candidates (and employees) either desire work from home, a hybrid environment, or need periodic flexibility. Inevitably this comes down to management understanding.

WORK FROM HOME

COVID forced many companies to quickly adapt to work from home. Some adapted and launched technology and management systems to facilitate. Others have philosophically embraced worked from home or have sought a mid-ground to capture the benefits of both an office and a work-from-home environment.

Candidates and employers were asked about the importance of work from home and how the issue was being handled. Candidates shared their input on a scale of 1- 4, with 4 being “required”.  Hiring managers indicate that their companies are open to discussion depending upon the role, however, it is not a preference in most instances.

As can be seen, there is a preference towards a hybrid environment, followed by primarily home (indicating periodic visits to the office.) While most companies appear to prefer an office environment, leading companies seek to accommodate staff and are focused on acquiring, and retaining, talent with their locale being of secondary importance. This flexibility/openness becomes an indicator of culture.

The culture of a company is critical in the retention of staff as well as the recruitment of top talent. The adage “”people leave managers not companies” is apparent based upon candidate/employee feedback. Frequently an employee’s feeling about their manager is also a reflection of the culture of the company. Many companies interview for candidate skills and the cultural fit with the team. The reverse is true as the candidate is interviewing the company to determine if it is the right environment for them. Hiring managers not only need to sell their company as a preferred destination for a candidate, but must be able to communicate their culture is implemented. In a competitive talent recruitment market, companies need to differentiate themselves based upon the opportunity and culture in order to win over their desired candidate.

 

Companies are being interviewed as much as they are interviewing. While the role and the compensation need to align, candidates are selecting companies based upon a cultural alignment with their belief system. Being able to identify and demonstrate the company’s culture, results in finding recruits that will be productive and happy in their new role.

 

RESPONDENTS SAY – PROCESS HAS CHANGED

We asked candidates and hiring managers about today’s recruitment process, given the competitiveness of the market:

The perception that turnover is high and talent is leaving the industry is, unfortunately, correct. The survey results showed that 22% of the roles companies are seeking to fill are to replace retiring staff, 40% are for standard staff turnover and, surprisingly, 39% are for new roles to support business growth and planned expansion.

Recruiting new talent for new roles highlights the need for a company to identify individuals with different skill sets. Companies are seeking engineers, data analytics personnel, e-commerce staff, digital marketers, operations specialists, and other new roles. These are individuals who may not be familiar with the industry, or your company, and hence may need to be sold on “why” the company and the industry.

Companies were asked how they are sourcing talent:

However, at the same time, recruiting managers shared that their frustrations with

• 90% saying they can’t find qualified talent
• 5% sharing that there is a lack of responses to their ads
• 14% stating that they do not have enough time to devote to an active recruitment process
• 13% admitting that they only want to hire experienced people.

 When candidates were asked what they felt was the most effective way for a company to recruit someone similar to themselves, they shared that personal outreach was most effective. Part of the reason for this may relate to the level of the role. Sales and management roles are higher level roles and these individuals, unless unemployed, are typically not searching online for their next position.

These are employed individuals who are open to change but not actively looking and need to be recruited.

• 54% stated that COVID has brought changes to the hiring process with key changes being:
  • Usage of Zoom / Teams for interviews, especially for initial or secondary interviews and as a way to involve other hiring influencers.
  • Increased sensitivity to work from home needs
  • Increased use of recruiters, staffing agencies and referral bonuses given the challenge of finding people and workload on internal staff.
• 79% of candidates feel that two interviews are reasonable before an offer is extended or for a company to identify that a candidate is not a good fit. Conversely, 57% of companies feel that their company is conducting two or less interviews before deciding on a candidate. 42% of the time companies are utilizing more than three interviews in reviewing a candidate, especially as the role increases in responsibility. Some of this dynamic is driven by scheduling issues, however, quality talent is typically also being pursued by other companies. The longer a process takes, the greater the risk in losing a candidate. Furthermore, as candidates interview companies, the ability to make decisions or act with speed comes into play. Typically, a candidate’s biggest frustrations are not being informed about the hiring process and/or a company’s desired time frame in filling the role.
• 30% of hiring managers stated that testing, such as Myers Briggs, Profile XT, Wonderlic or similar is part of their hiring process for sales and executive roles with another 22% saying for certain roles.

Today’s recruiting process is more challenging and moving at a faster speed. With limited, qualified, talent available companies need to be decisive, and candidates should consider how to brand themselves to rise to the top while knowing what they want.

 

 

OUR THOUGHTS

• On the topic of work from home
  The conflicting views could present a battle in the near future. Employees seek their happiness which is driven by flexibility that they have become use to.  Meanwhile employers seek to regain control of the workplace. Who will win will be dictated by how happy the employee is and how their lifestyle has changed, how their work/life balance improved, and how much the employer believes that they need to be back in the office. We see resignations continuing based on this conflict as top talent in the marketplace will always be able to find suitable work, challenge, and balance elsewhere.
• On being an employer of choice and the interviewing process
  Employers view of the market is that they are still the destination of choice. We don’t see a lot of changes in the way companies interview and try to control and dictate the process. As companies continue to not take into consideration that candidates do have a job, they put pressure on candidates to interview multiple times, and this is a big turn off to candidates. Employers need to be more organized and sympathetic to candidates. To do background checks and testing before even a first interview is a major turn off. Time kills all deals.
• On the ideal recruitment process
  Assemble your interview team, have a point person that is responsible for driving the process and moving candidates quickly through the interview and vetting stage. Conduct 2-3 interviews and decide. Use testing as a knockout or area to focus on improvement as tests sometimes are not accurate. It is questionable to waste the time and effort up front on a background check. Conduct those while checking references as a final step. Present offers late in the week and ask for an acceptance on Monday. Do not elongate the process and allow the candidate to shop your offer, tighten up on the timeline. Make it clear upfront what your process is to weed out tire kickers.
• On the overview of the market
  It is a candidate dominated market where top talent has choices and lots of opportunity to increase income and determine their ideal role. Candidates want flexibility to decide how they work, where they work, and for how much money. They want to have a work environment driven by empowerment, trust, and challenge. Employee happiness is becoming more and more important to if that employee stays in their current position or ventures out into the market. The economy is also making candidates think twice about making a move. With so much uncertainty, maybe riding the wave is better than jumping into unchartered waters.

CONCLUSION

Today’s recruitment market represents unique challenges for candidates and companies. From a candidate viewpoint, while companies may have opportunities, outreach can come with risk. There are financial upsides and, depending upon the situation, the workplace environment may be more satisfying. From a hiring company viewpoint, the dearth of qualified talent is challenging as typically the best talent is hidden within another company.

Candidates respond better to personal outreach and, while they may have simmering discontent, they need to be sold on why change is in their best interest and why the hiring company should be their company of choice.

Further, COVID and generational change are driving a different workforce environment. Adapting a leadership style and being intentional with cultural development is critical to reducing turnover, premature retirements and improving retention. An investment in people management should lead to improved productivity, stronger talent acquisition, and improved profitability (and a happier workplace).

About GRN Coastal:
GRN Coastal is an award-winning search firm, having placed multitudes of candidates across the electrical, automation, plumbing, HVAC, PVF, industrial supply and energy sectors. We are successful because we are from the industry with years of work experience on the plant floor and job site with distributors and manufacturers within the industries we serve.

About Channel Marketing Group:
Channel Marketing Group offers strategy, channel marketing and market research services to manufacturers, distributors, manufacturers reps, and associations focused on the electrical, lighting, HVAC, and plumbing industries. With its principals’ channel expertise, the company also serves the broader construction and industrial trades. To learn more visit www.channelmkt.com.

 

ADDITIONAL FINDINGS

How Candidates Describe Culture Employees / Candidate respondents were asked to define what they mean by “culture”

• Fairness & equity across the board
• Engagement and Accountability approach, and personal life encouragement
• Open to making change to accommodate an employee
• Grow people in conjunction to profits
• Leaderships ability to visibly demonstrate a zero bias workplace, not just posting “in vogue” commentary in internal This can be best experienced when “everyone” walks the talk.
• The way a company treats its people and the environment which is created by a collaborative work group.
• The overall feel of the company from top to bottom
• Is the focus on the customer and bringing in revenue or something else in the belief that the business will come? For example, too much emphasis on the company chosen CRM.
• Top-down behaviors
• When a company walks their talk both for their customers, employees, and supplier partners
• An ability to apply past learning experiences to grow
• Vibe, team sense, environment- is it a happy place to work?
• How a company is “defined”.
• Professionalism, equality,
• Is it a “roll-up your sleeves” mentality from top to bottom? Are LinkedIn posts just lip service, checking boxes? What differentiates the company? Constantly innovating products? Top of the line marketing, website, etc…? Prior interactions with them at industry events. Really only ways to try a gauge culture from outside.
• They understand their market strengths
• Flexible time as long as objectives are achieved
• Valuing one for what one does
• Expectations, attitudes, communication, praise, and criticism
• Comfortable place to work, hear laughter at work, communication happens at all
• A common goal being achieved through a structured plan with everyone on the same page
• Behaviors beliefs and characteristics of servant leadership
• Positive or negative
• Diversity
• Working with those that share the same ideals
• The attitude, standards and goals of an organization or team
• Leadership style
• How “yourself” you can be with your coworkers
• People create jt
• Teamwork oriented environment
• Culture to me is the team dynamic, the enthusiasm to show up and work hard alongside people and teammates who share your When pride in your work falls off, or when team members are no longer aligned in their goals and expectations, that’s when culture suffers downstream
• Culture is more than a statement on a company website. Culture is established from the top down and reflected from the bottom to the top. That is to say the collective mindset and attitudes of the working tranche reveals more about a company’s culture or lack Thus, daily actions and encounters with coworkers determine the baseline of a company culture.