1. A Larger Talent Pool to Hire From
It’s not surprising that the top concern for all Compensation Survey respondents was “finding qualified employees”. The COVID pandemic is a terrible situation that the world is dealing with but there are silver linings. The Congressional Budget Office (CBO) unemployment levels are anticipated to remain over 10% for the next 2 years. This means that some industries that have been hit hard by the COVID pandemic might not bounce back as quickly as others, including the essential HVAC businesses.
This opens up an opportunity for the industry to find individuals that they might not have been able to typically hire with the previous record low unemployment rate. You should be thinking about how you can develop a strategic plan to hire for your business’s future success.
2. A New Focus on Employee Retention
The fifth biggest concern for respondents was “retaining employees”.
In 2019 the average wholesaler turnover rate was 29.5% according to the BLS. The HARDI distributors that participated in the Compensation Survey reported a non-management employee turnover rate of 14% (which was on par with the other wholesale industries). That is good when considering what the national average is. With that said, the surveys were submitted prior to COVID pandemic. Since the pandemic, turnover rates have skyrocketed due to layoffs and furloughed employees. However, employee quit rates have now dropped to 5-year lows.
This highlights another opportunity for your business. With the tighter job market, how can you focus on developing or improving a plan to retain your employees. Take some time to figure out what is keeping your teams happy and make adjustments where necessary to try and maintain or even bring down your turnover rate.
3. Get Creative with Employer Benefits
The second greatest concern of respondents was the “costs of healthcare”. Of HARDI members that participated in the survey, 99% offered their employees medical insurance and they also shared that healthcare expenditures account for 8.5% of their annual payroll expenses. Unfortunately, there is not a ton that can be done to curb the increase in health care costs, and it seems to be a must for almost everyone which levels the playing field.
The Compensation Survey did start to highlight some differences in additional employee benefits that you can offer and how those can affect your payroll expenses. Some of those covered in the report include additional PTO, Retirement options and “holiday gifts”. There are some other less expensive benefits that you can consider that new hires might find of value. One obvious and very top-of-mind perk work would be remote working options. Due to the pandemic, this “perk” has become a necessity, but how will the shift change perceptions moving forward?
There are some other creative benefits organizations are offering. HARDI for example offers “Summer Fridays” which are half days throughout the summer where the work week is altered to allow employees to enjoy their summer weekends. Obviously, this may be a struggle for warehouse and branch locations, but an example of building in unique perks. There is a list of some other neat things groups are doing like mental health support offered by Capital One Financial and student loan paydowns offered by PwC. It is worth taking some time to think through what could help make your business stand out.
The Compensation Report is a distributor benefit (for those who participate) that offers a ton of info on how distributors are incentivizing and compensating their teams. The entire report has data that can be looked at by region or locality to help you make important decisions to remain competitive with your offerings. For details on the report or to purchase a copy click here.