3 Ways Employers Can Thrive in Today's Tight Labor Market

For years, employers had the upper hand in the labor market. Things went on that way for so long that many business owners and managers started to forget what it's like to have to compete for talent. All of that came to an end in the wake of the COVID-19 pandemic, though.

Today, workers are calling the shots. After dealing with short-term layoffs, remote working, and endless uncertainty, workers began to quit their jobs en masse in 2021. And now, there's a labor shortage that's forcing businesses to find new ways to fill record numbers of job openings.

That means employers have to start reevaluating what's important to prospective employees — beyond adequate compensation. By giving workers the right incentives, it's far easier to hire the best available talent. Here are three things employers should do right now to win the competition for talent in today's tight labor market.

Create a Culture of Transparency

One of the biggest reasons cited by workers who quit a job in the past two years was that they felt disrespected by their employer. And the source of those feelings is that many employers aren't exactly upfront and honest with their workers about business decisions that may affect them. But studies have demonstrated that businesses that embrace transparency benefit from improved worker morale, greater employee engagement and efficiency, and less workplace stress. And that makes them a more attractive workplace to join. Interestingly, many of the companies embracing transparency have measured its impact by using specialized monitoring software for employees. And by disclosing its use to their workers, they even managed to avoid the discomfort that many of them feel about the practice.

Consider Alternative Work Arrangements

One of the biggest takeaways, labor-wise, to come from the pandemic is that a large majority of workers loved having the ability to work from home. Even now, a full 61% of employees still working from home are doing so by choice — even though their offices are fully reopened. And at the same time, more employers are experimenting with things like a 4 day work week to attract top talent. The point is, it's obvious that workers want flexibility, be it shortened work hours, flexible scheduling, and the ability to work from home. And the businesses that give them those options make for attractive destinations.

Invest in Cutting-Edge Technology

With each passing year, members of Generation Z make up an ever-larger part of the workforce. By some estimates, they already made up around 24% of the global workforce in 2020. That makes them a prime target for employers. And to attract them, businesses should be investing heavily in cutting-edge technologies. As a cohort, Gen-Z workers are the most technologically savvy members of the workforce, and they expect to have access to the latest digital tools at work. That makes strategic investments in things like sales automation, IoT technology, and AI-powered data analytics a good idea for businesses trying to land recent graduates and other younger members of the workforce.

The Bottom Line

Right now, most economists expect that the current worker-friendly labor conditions will persist for the foreseeable future. And that means businesses can't try and wait the situation out in the hopes that hiring will get easier. They have to take concrete steps immediately to make themselves as attractive as possible to prospective employees. The three tactics outlined here are an excellent place to start. But they're only the beginning.

To compete going forward, businesses are going to have to learn to start listening to their employees. And, they must be receptive to some of the operational changes that current and prospective employees recommend. At the end of the day, businesses that work with their employees rather than offering them a take-it-or-leave-it job situation will be the ones that thrive. And that will also leave them in a good strategic position for when the labor market one day reverts to its former state.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes