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Supply and Demand in Today’s Job Market

Supply and Demand in Today’s Job Market

June 28, 2021by Barbara Flynn0

While I was waiting for the red light to turn green, I noticed a sign by the side of the road reading “Construction Jobs, $3500 Sign-Up Bonus”. A news channel reported that McDonald’s offers a $500 hiring bonus if new employees stay on for at least 90 days. What a crazy world we live in right now!

Employers are still facing the hiring challenge of finding and keeping good team members. The challenges start with getting people to apply for the open positions, to show up for job interviews, and to ultimately stay on for the long-term – that is for more than seven days. Employers and job recruiters share the frustration. It seems that conventional hiring practices are no longer working. Unless the employer is willing to pay an above average salary or pay rate for the position or a hiring incentive, people don’t want to come to work for them.

Many business owners are disappointed in some new hires because shortly after their onboarding, they decide to leave. Why do they leave? The employer down the street offers a higher pay or better benefits. It took a store owner four months to find a sales associate. The new hire worked on a part-time basis on the weekends besides working full-time as an accountant during the week. After four weeks, he resigned. His reason was that he wanted to have more time off.

Basic market economics teach us about the balance of supply and demand. As far as the job market goes, the job supply certainly outweighs the number of applicants. Companies are competing for applicants, are getting creative by offering incentives just to be considered by job seekers as a potential employer. Prior to the COVID pandemic, applicants would compete over an available position and feel privileged to be receiving the job offer. In this post-COVID pandemic, the scales have shifted in the opposite directions.

Nonetheless, business owners and job recruiters should not get discouraged and think that all is hopeless. Stick to the hiring practices that have been working well and, if the budget allows it, add an incentive to attract the right job applicants. Implement an Employee Retention Program to motivate your staff to keep their employment with you. Employee Retention Programs include employee reward systems, morale boosting and team-building assignments, and an adjusted wage structure. Within each component, employers can get creative and incorporate competitive games, brainstorming, idea sharing, and bonuses. New employees will learn about the Employee Retention Program during their onboarding and realize right away that this an employer who cares about the staff and worth staying on for the long run.

Ultimately, unemployment benefits will expire at the end of September, and people will need to get back to work. At that point, the scales for supply and demand will shift again. It is hard to predict how far they will shift; however, we know that there will be at least a healthy, economical balance that reenters the job market where employers and job seekers have options and an effective way to fill positions.

Marlies McKie

Barbara Flynn

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