Ways to Combat the Tight Labor Market in 2023

As of early 2023, economists observe that the labor market is incredibly tight. Hundreds of businesses and industries remain significantly understaffed in the wake of the COVID-19 pandemic, and things are showing no signs of giving slack any time soon. Job seekers can afford to be pickier about their positions, and this is having a significant impact on employers around the country. In this brief guide, Horizon will go over ways to combat this tight labor market and outline what your business can do to attract quality employees! 

Current Labor Markets are Affecting All Kinds of Businesses

The current market conditions can make any business sweat, especially if you’re operating in critical industries that must be fully staffed to keep things running smoothly. However, it’s still possible for your company to stay afloat and even recruit great new talent in these difficult times! Armed with the right knowledge, your recruiting team can get a leg up on the competition and assemble an excellent team.

Reasons for the Tight Labor Market in 2023 

Tightness in a labor market can be difficult to pin down to just one cause, like any economic concept. Many economists believe that the pandemic had a major effect on the labor force, not only because it reduced the health of the overall workforce, but also because of the cultural changes, like remote working setups becoming quite popular. Additionally, resignations and career changes during the pandemic generally shifted bargaining power in favor of workers, making it easier for them to be selective about which jobs they’ll agree to do.  

Perceived Low Wages 

Many employees perceive current wages as too low, or not worth the amount of effort the job entails. There are a few reasons for this, but the bottom line is that in a tight labor market, employees are generally less willing to accept previous employment conditions, and there may even be fewer workers as some opt to stay out of the labor pool entirely.  

Employee Dissatisfaction 

This period of market tightness has given many existing employees the opportunity to think about and discuss the conditions at their workplace and the kinds of tasks they’re expected to perform, and the current consensus appears to be that people think the status quo ought to be changed. This might mean less menial work, better hours and wages, improved employee benefits and protections, improved workplaces, and more. Without these changes, many workers are staying dissatisfied and choosing to stay away from companies that don’t fit their criteria.  

Remote Work Opportunities 

During such a period of dissatisfaction with the current state of labor, remote working can provide an attractive alternative to workers who have quit their jobs within the last two years. After all, remote work means having more control over your schedule, less oversight, and working in the comfort of your home. It also means that remote employers have the advantage of more flexibility in hiring, since they can find employees from anywhere in the country. 

Tips for Hiring in a Tight Labor Market 

While these factors may seem overwhelming, it is still very possible to hire new employees in this historically tight market. Read about Horizon’s tips for hiring in a tight labor market below! 

Make Your Hiring Process More Efficient 

Streamlining your hiring and onboarding process may entice more workers – after all, it can be somewhat tedious for workers to go through multiple rigorous interviews only to be potentially rejected from job openings. Efficient hiring processes also get prospective employees committed and working with your team much faster, increasing the likelihood that they’ll stay.  

Relax Your Requirements for Employment 

In times like these, your recruiting team may need to lower some of the requirements for employment and act more flexibly. Of course, this should remain within reasonable bounds – don’t hire applicants who lack critical competencies for your job. But if a candidate who otherwise seems great is lacking a requirement or two, or if your hiring team typically does several rounds of interviews, it may be expedient to relax some of those standards in order to actually acquire new talent.  

Utilize Multiple Channels to Recruit Potential Talent 

If you’re having trouble finding prospective employees through the time-tested channels your company tends to refer to, it’s time to change things up! Consider implementing referral programs, using social media more heavily, visiting job fairs, and even using new job application platforms in order to reach a wider swath of potential candidates for open positions.  

Offer Better Benefits for Your Employees 

Many employees feel dissatisfied not only with their current wages, but with their benefits, too. Consider improving your company’s employee benefits in order to attract the best talent – this can include things as small as a greater number of vacation days to something as important as providing life insurance, retirement plans, and health insurance.  

Review and Update Your Salary Structure 

Your current salary structure may have worked for many years, but it’s likely it needs a rework considering the leveraging power that workers currently possess. Higher starting salaries, higher maximum salaries, and greater opportunities for raises and promotions can help keep workers engaged and make them feel like your company is worth investing their time into.  

Offer Better than Average Wages 

In order to replace the employees your company may have lost amid the resignations of the past two years, you’ll need to invest more money into above-average wages. Not only are many employees demanding improved wages, but many other companies will be trying to entice new talent to work for them. Get an edge on the competition but offering higher salaries than you’re used to.  

Tips for Retaining Your Employees in a Tight Labor Market

Just as important as hiring new talent, is retaining your current employees! This wave of dissatisfaction and labor shortages is affecting everyone, and if your employees don’t feel that they’re getting a fair deal, they may be tempted to leave – especially knowing that there are so many open job opportunities.  

Embrace Flexibility (Work from Home Opportunities) 

One of the only employment models that is flourishing amid such labor tightness is the remote work model, so if it’s at all possible for your company, embrace remote work and other such flexibility. It’s appealing to your employees and might even cut down on some of your overhead costs. If it’s not possible for your business to go fully remote, try to allow for more flexibility in other ways – maybe implementing a partially remote model will work better for your business, or allowing for employees to work remotely when traveling or on vacation.  

Put an Emphasis on Staff Development 

Staff development is a great strategy to help not only improve your current workplace, but to create a structure that makes employees feel as though they are being supported through their entire career journey. Your company can opt to provide development trainings on a regular basis, provide customized career and skill counseling, or even provide financial and logistical support to employees interested in pursuing higher education degrees in related fields.  

Provide a Supportive Workplace Culture and Environment 

Positive workplace environments are often treated as secondary concerns when it comes to retaining employees, but this factor plays a huge role in determining whether a candidate stays or resigns. To many people, a negative workplace isn’t worth staying in, regardless of how great the pay and benefits are. We spend a significant portion of our lives at work, so it’s important that we at least feel comfortable and supported in our workplace.  

Make Employees Feel Valued Through Raises, Perks, etc. 

Nobody likes to feel like their hard work is going unacknowledged, and too much work without enough praise can make even the most loyal employee consider jumping ship. Help keep your crew engaged by offering ample opportunities to earn raises, receive perks, and otherwise receive rewards that acknowledge all the effort they put in.  

Horizon is a Trusted Partner for Payroll and HR 

Looking for help managing your payroll and HR, as well as your hiring and onboarding? Horizon is a trusted payroll and HR service partner that offers a number of different products and solutions tailored for your business. Reach out to us today for more information! 

Solutions for Benefits Management, Employee Onboarding, etc. 

Here at Horizon, we offer a number of business solutions, from benefits management, employee onboarding, HR consulting, and more. Check out our Payroll Partner page on what Horizon can do to help your business!  

Helping Businesses of All Kinds Since 1997

We have experience working in a variety of industries – whether you’re an insurance agency or a gardening service, we’ve got you covered! We have more than enough expertise to help you with whatever your business needs; our quality solutions have been trusted by businesses all over the country for more than two decades.  

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