Expert: Business Leaders Facing a Number of Challenges

From the “Great Resignation” to flexible work policies to the effects of the ever-lingering COVID-19 pandemic, business leaders continue to face a variety of challenges.

In a comprehensive webinar hosted by Corp! Magazine, the Best & Brightest Programs and the National Association of Business Resources, labor attorney Olivia Hankinson led a discussion of a variety of those issues.

Hankinson, a labor and employment attorney with Kerr Russell, which sponsored the webinar, “Trending Topics in Labor and Employment,” talked about everything from the effects of record-low unemployment numbers to still-existing pandemic recommendations of the CDC.

One of the biggest challenge facing employers, Hankinson pointed out, is the vast number – record numbers, really – of job openings and a lack of people to fill them.

According to statistics released by the Labor Department, Hankinson said, there were some 11.4 million job openings at the end of April, which is down slightly from March but still a historic high.

Other statistics, according to Hankinson:

  • Layoffs and discharges “are still at historic highs,” she said, but were down to 1.2 million in April.
  • Some 4.4 million people quit their jobs in April.
  • Wage growth is at about 6%, although for those who have switched jobs it’s at about 7.1%, and initial unemployment claims are also at historic lows. Unemployment overall is actually at the lowest level it’s been since 1969.

“So we’re in a period of substantial amounts of job openings, even though it looks like it’s beginning to taper off a little bit,” Hankinson said. “Overall, this data is showing us we’re seeing record high numbers of employees quitting or switching jobs, but we’re seeing record lows of unemployment claims.

“This is causing a real issue for a lot of employers because, although there are so many jobs available, there just aren’t enough workers to fill those roles.”

The phenomenon — record high numbers of employees resigning — has been termed “the Great Resignation,” though Hankinson called it a “little bit of a misnomer” because while there is a record number of workers leaving their jobs, individuals — for the most part — are still in the workforce, simply working for different employers.

“That’s great for us, because if we look at the data and the underlying information as to why employees are choosing to resign … we can look within our own organizations to see if there’s capacity for changes to be implemented to existing practices or policies so that our own employees don’t leave and so that we can create better practices to recruit new employees to join our organizations,” Hankinson said.

There are a number of factors workers are citing for the resignations, including:

  • Toxic work culture;
  • Low pay;
  • No opportunities for advancement;
  • No flexibility regarding remote work;
  • Failure to recognize performance; and
  • Poor response to COVID-19.

There are also financial benefits, she pointed out. According to Hankinson, 64% received more pay transitioning to a new employer; half of those received an 11% raise or more and about 30% received a 6-10% raise.

Some 22% of recent hires got a signing bonus, and 40% of all new hires are getting greater scheduling flexibility.

That flexibility includes the ability to work remotely, usually from home. Hankinson said many employees are looking for companies that provide that flexibility, with about 40% finding that flexibility elsewhere.

It’s a “huge change in the wake” of the pandemic, she pointed out.

“From this we can glean there are some options for employers to take aside from offering wage increases or bonuses to increase our employee retention or to boost recruiting efforts generally,” she said. “One thing companies may want to consider is the option of allowing for remote work, even if it’s 1-2 days a week. But you should certainly have a written policy in place … clearly outlining the requirements and obligations associated with working remotely.”

Flexible work arrangements “are a great tool for retention and recruiting efforts,” because it has been so often identified as one of the top reasons employees are leaving their current employers.

While it can be a “win-win,” Hankinson said employers should crate policies which “clearly delineate” the parameters.

“We’re seeing major companies starting to change their plans to allow employees to work remotely,” said Hankinson, citing Amazon and JP Morgan. “Studies are showing employees who work from home are having less stress and are more satisfied with their jobs. Workers who aren’t allowed to work remotely are twice as likely to leave.”

Another pandemic-induced hiring consequence has been the hiring of employees who don’t have the requisite qualifications to do the job. During the pandemic, Hankinson pointed out, employers “desperate to hire workers” hired candidates who lacked the skills and experience necessary to perform the job.

Reasons for this vary, but mostly it happens when employers are “desperate to hire employees” in order to keep the company moving.

Hankinson said employers are going to find the need to replace those workers with more qualified employees, but that such a move would carry legal risks.

Her solution: Document everything.

“What we anticipate is employers might need to replace these employees who are underqualified with more skilled employees when they become available,” she said. “Performance concerns should be well-documented. You’re going to end up opening yourself up to significant risk of lability without that documentation in place.”