Working From Home Might Never End

It’s now been more than two years since many workers were sent home, and while the pandemic is easing, some just aren’t coming back to the office. This blog looks at what this means for hiring and retention as many employees regard working from home as worth anything from a 5-10% pay raise!

In a new report, HSBC economist James Pomeroy noted office attendance rates are struggling to get back above 40% to 50% of where they were before the coronavirus hit. Data from Kastle Systems for the U.S. shows the current highest rate of office occupancy is Austin, Texas, and that’s still only 53%. The lowest is San Francisco at around 30%.

And it’s not just the US. As of February, Transport for London data recorded only 70% of 2019’s journey volumes, suggesting commuting is still down.

Employer HR now faces a new competitive issue when it comes to hiring and retention. What is your working from home or hybrid working policy going to be? How will it impact organizational effectiveness? How will it help attract new talent and retain existing talent? This could be “forever”.

That’s all despite restaurants, cinemas and flights seeing as much as 90% of the 2019 volumes, which implies people are confident going out — just not to the office.

“With offices only half full in most of the developed world, many will be expecting office occupancy to grind higher,” said Pomeroy. “However, it’s worth keeping in mind the alternative: that occupancy could already be close to a peak.” This could be forever.

The trend is evident in other data. WFH Research reported earlier this month that according to its survey of more than 32,000 people in 25 economies, the average worker values a day from home as much as a 5% pay rise.

Serbians associate flexibility with 10% more pay, while Americans reckon it’s worth a 6% hike.  

Furthermore, 15% would seek out a new job if their current employer forced them back to the office five days a week. The numbers are higher in the U.K., Australia and Canada.

This is not surprising. Employees faced with the prospect of going into New York City regularly sited additional costs of up to $10,000 a year in travel costs (Vehicle depreciation, mileage, public transportation, lunch, additional dry cleaning, etc.) plus lost personal time.

An employee driving 20 miles a day to work is spending 10,000 miles, or around $5,000 a year, in after-tax income just to get to work and back.

There’s also a gap between the hopes of workers and employers. WFH Research’s survey indicates employee’s desire about two working days at home each week. Bosses are generally planning offering just one even though the same study suggests staff are 4% more efficient when at home versus business premises.

Pomeroy sees various economic implications from the latest data:

  • Businesses will need to compete in different ways to attract talent, be it by offering a hybrid experience or more flexible hours.
  • Rent and house prices are now being driven by demand for suburban and rural properties rather than homes in city centers. Many employees have, or want to, relocate to lower cost areas.

What does this mean for hiring and retention?

  1. If you have positions that could be done from home, or are being done from home, make sure the working from home option is a big part of your job postings.
  2. If retention is a concern, develop a hybrid working plan so existing employees can take advantage of working from home if they want to.
  3. Working from home is not for everyone or every organization. Make sure your hybrid working plan addresses the needs of all types of employees, including those who enjoy coming into the office.
  4. Establish clear rules for working from home and regular remote meetings. Consider mandatory video calls.
  5. Employees still want to socialize with colleagues. Consider taking savings in rent from the reduction in leases/square footage. Use that money to fund team building events.
  6. Consider paying employees who work from home a non-taxable stipend for using their mobile phone.
  7. Some companies allow extra flexibility for employees with young children to manage disrupted day care and school schedules.

Workers Quit Jobs at Record Levels

The Wall Street Journal reported on January 5 that workers quit their jobs at a record rate in November while job openings remained close to highest-ever levels. As providers know, the US labor market remains very tight.

These are the facts:

  • 5 million quit their jobs in November
  • The quit rate was 3% up from 2.8%
  • There were 6 million job openings at the end of November, a decrease from 11 million in October
  • 5 million people are unemployed
  • There are only two workers for every three positions
  • None of this data incudes the more recent period effected by Omicron
  • Industries bearing the brunt are retail, leisure, hospitality, healthcare and social assistance
  • Healthcare workers are also quitting due to stress from COVID

Another part of the problem is millions of workers have dropped out of the labor force. Labor force participation – the percentage of the working age population employed or seeking employment is down to 61.8% from 63.4% prior to COVID. Some workers have retired (taken Social Security early), others face child-care issues, or remain too fearful of COVID due to underlying health issues.

What do workers want?

  • Higher pay 
  • More flexibility and less exposure to COVID

This may explain why providers with in-home services have been less effected than providers with group homes. In-home services are delivered one-on-one often with flexible schedules. Group homes created more exposure to others and schedules are more fixed.

Need help with hiring? Download the myApplicants fact sheet to learn more.

What Happened to All the Workers?

Employers continue to struggle with hiring. So where did all the workers go? The Wall Street Journal reports that over 500,000 became self-employed in 2021. Currently 9.44 million workers are registered as self-employed. That is the highest total since 2008 after the financial crisis.

Meanwhile, the US workforce remains 3% lower than before the pandemic. There are many reasons including mothers who left the workforce to look after children, 300,000 working-age adults who died of Covid or have long-term repercussions, hundreds of thousands who went onto Social Security at 62 and others who simply found ways to do with less.

Part of the shift to self-employment might be temporary. Employers looking to hire though need to create job postings to attract the self-employed. Key factors to highlight, if applicable, are:

  • Job security
  • Annual gross pay including any overtime
  • The annual dollar value of your benefit plans

Hiring Improves for Some

The Wall Street Journal recently reporting an uptick in hiring with almost 600,000 new people joining the US workforce in October.

  • 1 million more people were employed in November than in October.
  • The labor force participation rate rose to 61.8%, highest since March 2020 when the pandemic started.
  • The labor force participation rate for women, 25-54 years old, rose to 75.6%, the highest since the start of the pandemic. This could indicate that child-care issue may no longer be deterring women from working.

Another hopeful sign is that people are starting to look at new careers. Cindy Ortiz started a job as a CNA after she lost her job at a call center. She was retrained by Goodwill of Southern Nevada.

Older workers, those 55 and up, are still holding back. A little more than 40 percent of this demographic were in the labor force in February 2020, but only 38.4 percent are today. That figure is identical to the level last May, when the economy was largely shut down. Almost two years into the pandemic, they are still not coming back to work. Some over 62 have signed on to Social Security.

Extra Unemployment Pay Has Disappeared, So Why Haven’t the Workers Returned?

Earlier this year, a change came: $300-a-week federal supplement for unemployed Americans was cut off. Many people, they argued, would then take the millions of jobs that employers were desperate to fill.

Yet three months after half the states began ending that federal payment, there’s been no significant influx of job seekers.

In states that cut the $300-a-week federal supplement, the workforce has risen no more than it has in the states that maintained the payment.

That federal aid, along with two jobless aid programs that served gig workers and the long-term unemployed, ended nationally Sept. 6.

Yet America’s overall workforce actually shrank that month. “Policymakers were pinning too many hopes on ending unemployment insurance as a labor market boost,” said Fiona Greig, managing director of the JPMorgan Chase Institute, which used JPMorgan bank account data to study the issue. “The work disincentive effects were clearly small.”

Labor shortages have persisted longer than many economists expected, deepening a mystery at the heart of the job market. Companies are eager to add workers and have posted a near-record number of available jobs. Unemployment remains elevated. The economy still has 5 million fewer people working than it did before the pandemic. Yet job growth slowed in August and September.

An analysis of state-by-state data by The Associated Press found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than they did in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of regular state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

An earlier study by Arindrajit Dube, an economist at University of Massachusetts, Amherst and several colleagues found that the states that cut off the $300 federal payment saw a small increase in the number of unemployed taking jobs. But it also found that it didn’t draw more people off the sidelines to look for work.

A range of factors are likely keeping millions of former recipients of federal jobless aid from returning to the workforce.

  • Many Americans in public-facing jobs still fear contracting COVID-19
  • Some families lack child care
  • Early retirement
  • 700,000+ Americans have died plus some who recovered have long term COVID related issues

Plus not all employers are doing the best possible job to attract the applicants who are out there

  • Some employers lack transition and training plans to entice applicants from “other” industries
  • As the recruiting market has got more competitive, employers with out-of-date hiring systems and job posting content are losing out to competitors with state-of-the-art systems

The pandemic appears to have caused a re-evaluation of priorities, with some people deciding to spend more time with family and others insistent on working remotely or gaining more flexible hours.

Some former recipients, especially older, more affluent ones, have decided to retire earlier than they had planned. With Americans’ overall home values and stock portfolios having surged since the pandemic struck, Fed officials estimate that up to 2 million more people have retired since then than otherwise would have.

And after having received three stimulus checks in 18 months, plus federal jobless aid in some cases, most households have larger cash cushions than they did before the pandemic. Greig and her colleagues at JPMorgan found in a study that the median bank balance for the poorest one-quarter of households has jumped 70% since COVID hit. A result is that some people are taking time to consider their options before rushing back into the job market.

Nationally, the proportion of women who were either working or looking for work in September fell for a second straight month, evidence that many parents — mostly mothers — are still unable to manage their childcare duties to return to work. Staffing at childcare centers has fallen, reducing the care that is available. And while schools have reopened for in-person learning, frequent closings because of COVID outbreaks have been disruptive for some working parents.

Exacerbating the labor shortfall, a record number of people quit their jobs in August, in some cases spurred by the prospect of higher pay elsewhere.

Learn how to boost your hiring, and increase your chances of finding qualified applicants with myApplicants. Download the fact sheet to learn more.

10 Key Features to Include in Your Job Postings

Hiring in 2021 has proven to be significantly harder and different than it has been in years past. Part of the challenge, however, is creating a captivating and successful job posting. If done correctly, the job posting not only can sell an applicant on the position, but on the agency as a whole.

Here are our top 10 features that should be included in your next job posting:

Job Security

2020 was an intense year for layoffs, causing a lot of staff and employees to become more concerned about their job security. Make sure you are telling applicants that you are government funded and offer better job security than many alternatives.

“ABC Provider is funded by the state. We offer very stable employment opportunities with 40 hours a week”

Base Pay Plus

If overtime or holiday pay is available at your agency, highlight this! Many employees are focused on the weekly take-home pay, so give them an idea of what they could make in overtime. Extra holiday pay is something agencies offer, that a lot of other establishments can’t. Highlighting this will help you stand out from the big box stores in your area.

“A DSP on average earns $120.00 a week extra in overtime after 6 months.”

“All hours worked on any one of the 10 holidays is paid at time-and-a-half.”

Pay Differentials

If any positions are eligible for a higher shift or service differential, make this clear.

“Certain shifts are paid at a $4.00 hour higher rate.”

Benefits

Include an annual valuation of your benefit package with the hourly rate / salary. Agencies are able to offer really good benefits, giving them a competitive edge over other companies.

“Plus an annual benefit package worth on average $2,500 a year after 6 months.”

Paid Training

Applicants can be worried about jumping into a new position that they haven’t tried before. Make sure they know that training will be available for applicants. Let them know they will be supported at your agency.

Non-Taxable Expense Reimbursement

If the position offers mileage reimbursement, BYOD compensation for a mobile phone or other non-taxable payments, include these. Many other companies don’t offer this and it is a great benefit for employees!

“$10.00 nontaxable reimbursement paid per month for using your smart phone for work.”

Equipment

Let applicants know what equipment will be provided: smart phone, tablet, laptop, vehicle, etc. Some companies require applicants to provide their own equipment, so providing the tools they need will help you pull in more applicants.

Work From Home

If the position can be partially or fully “work from home”, use this. For prospective employees with children, this can be huge. Plus savings on commute time and costs can be a big factor.

“There is a 40% work from home option after 3 months (2 days a week).”

Phone Friendly

Modern employers are communicating through text, the best medium for reaching today’s new hire, especially millennials. Create a standard applicant-friendly text library to re-use with all initial applicants. Asking today’s new hire to download a paper form to fill-in and email it back is a big turn off. Make sure your application process is 100% mobile friendly.

Use Appropriate Language

Some of your applicants may have never worked for an agency before, so remove any jargon that applicants may not understand such as “QIDP” , “IP”, “DSS” or “community inclusion”. Keep it simple! Also, try substituting “You” and “Your” where feasible for your agency’s name, “Our” or “We”. Talk about the applicant, not yourself.

3 Tips to Boost Hiring

Recruitment is a complex process, but essentially it is a competitive marketing process – if agencies want to convert candidates into hires, they need to look at the process the same way marketers look to convert leads to sales. Agencies need to ensure that their recruitment funnel is solid.

You can’t win if you don’t compete!

#1 Post on multiple job boards. If your company is only posting on one job board like Indeed, you are probably not reaching all the available applicants. Post on Indeed, Facebook and any free local job boards. Use an ATS (Applicant Tracking System) that supports posting to unlimited job boards with one click.

#2 Make sure applicants can apply directly from their smart phone. Don’t suggest candidates fax their resume. No one knows what a fax is today, never mind has access to one. Printing and uploading paper job applications will also lose applicants.

  • APPLICANTS MUST BE ABLE TO APPLY DIRECTLY FROM THEIR SMART PHONE

Asking today’s new hire to download a paper form to fill-in and email it back is a big turn off. It’s too hard. The candidate needs to be able to apply within your talent management application.

#3 Communicate by text. Modern employers are communicating through text, the best medium for reaching today’s new hire, especially millennials. This will work much better early in the recruitment process. Don’t be afraid to over-communicate. Your ATS should allow you to text directly from within the application.

Reduced Employment Opportunities

The Wall Street Journal reported Friday, July 16th that although job openings are at a record high, the impression that all employers are hiring like never before may be misleading. Many businesses that laid off workers during the pandemic are already predicting they will need fewer employees in the future.

As with past economic shocks, many large or sophisticated employers have taken the opportunity to invest in automation or implement system changes to reduce dependency on labor.

“In industries from hotels to aerospace to restaurants, business have reviewed their operations and discovered ways to save on labor costs for the long term” – this applies to low-wage sectors.

  • Marriott plans to limit housekeeping and reconfigure food and beverage operations. Marriott also reduced management staff by 30% in 2020 in food and beverage departments and plans on the changes being permanent
  • Hilton is adopting “a flexible housekeeping policy” with daily service only available on request
  • Unite Here, a union that represents hotel workers reporting that the end of daily cleaning could result in 180,000 job losses
  • Dave & Busters has installed tablets for customers to order food and drink, allowing managers to schedule fewer servers
  • Applebee’s is using tablets to let customers pay without a waiter

Hiring Picks Up in the USA

The number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states are canceling enhanced and extended payments this month. This suggests that ending the aid could push more people to take jobs, according to the Wall Street Journal.

Federal pandemic aid bills boosted unemployment payments by $300 a person each week, and extended those payments for as long as 18 months; well longer than the typical 26 weeks or less.

The extended benefits are set to expire in early September, but states can opt out before then.

  • Organizations need to gear up their hiring between now and October to take advantage of the influx of new potential applicants.

Missouri Gov. Mike Parson said the benefits were helpful during the height of the pandemic, but their continuation has “worsened the workforce issues we are facing.”

The 21 states that have ended, or will end the beefed-up payments in June, saw a 13.8% drop since mid-May in the number of people receiving unemployment benefits. The four states planning to end the benefits in July and September saw 10% and 5.7% drops, respectively, the Journal said, citing an analysis by Jefferies LLC.

The additional payments may have contributed to a labor shortage, those in favor of cutting the benefits have said, while others argue other economic and pandemic-related issues are keeping people out of work, according to the WSJ. Both are probably true.

Workers may still receive unemployment benefits on their states’ programs when the additional payments end in September.

Several states are offering payouts to workers who accept jobs and complete an allotted number of weeks as an employee as part of an effort to whittle down the reliance on the federal program.

Why the Worker Shortage Continues

The Wall Street Journal reported on Friday, May 7th that there are many reasons holding back potential employees from the labor market. Over 4-8 million fewer people are currently in the labor force than before the pandemic, depending upon how they are counted.

  • Fear of Covid-19, sickness (the USA still averages over 45,000 positive cases a day). If 45,000 people quarantine for 14 days, that removes approximately 500,000 from the available workforce even if they don’t get really sick
  • Lack of childcare and open schools
  • Previous employer has offered to rehire soon
  • Few job openings in their area
  • Extended jobless benefits

“I think this is just as much about a shortage in labor supply as it is about a shortage of labor demand,” Jason Furman, an economist at Harvard University commenting on the weaker than expected April jobs report, told CNBC. “If you look at April, it appears that there were about 1.1 unemployed workers for every job opening. So there are a lot of jobs out there, there is just still not a lot of labor supply.”

Census data taken in recent weeks suggests the closures of day-care centers and schools have forced millions of Americans to stay home and care for children or oversee online learning.

According to a Census Household Pulse survey taken in late March, 6.3 million people reported that they were not working because they needed to care for a child not in a school or day care. Another 2.1 million were caring for an older person.

An additional 4.1 million Americans said they were not working because of concerns about getting or spreading Covid-19.

The labor shortage should ease in 2021, but the process may take months as:

  • Vaccination rates continue to rise
  • Schools fully re-open
  • $300 per week federal unemployment bonus above and beyond what states provide, expires in September

For a more in-depth look into hiring, download the eBook: Tips for Boosting Applications and Hiring in 2021 or the myApplicants fact sheet.

To discuss hiring, onboarding and training, email agencysuccessteam@mitcsoftware.com.