Here is my weekly email with some insights and ideas pulled from conversations I had on my podcast.
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Stories Worth Telling
On the Success Story podcast, Scott has candid interviews with execs, celebrities, notable figures and politicians. All who have achieved success through both wins and losses, to learn more about their life, their ideas and insights.
He sits down with leaders and mentors and unpacks their story to help pass those lessons onto others through both experiences and tactical strategy for business professionals, entrepreneurs and everyone in between.
The Great Re-Evaluation
As a business owner, or even as an employee, you've no doubt heard panicked rumors flying around about the 'Great Resignation'; talent's flying off the shelves, leaving businesses in the lurch as they desperately search for replacements. It seems like everyone's talking about it.
It's just one of the many crazy shifts that's happening in the world today as we all scramble to keep up with the changing landscape. I hate to regurgitate the same old platitudes about COVID-19 and the 'new normal', but it seems like every day, something else changes.
Regardless of what's really happening (and what's not), it's hard to ignore the enormous talent shortage sweeping the US. The numbers don't lie – and neither do the businesses with hundreds of job postings and no applicants. Let's talk about it.
What's the Media Saying?
'The Great Resignation is still in full swing. Here’s what to know', says this article from CNBC. I was shocked to read that 4.4 million people left their jobs in February – and more recently, the figure in May was 4.27 million.
That seems outrageous, especially considering how hard it was for laid off employees to find new jobs after the pandemic first hit. Why would so many people suddenly decide to quit their jobs now? How have the tables turned so dramatically?
Then there's the PwC’s Global Workforce Hopes and Fears Survey; it's one of the most comprehensive surveys of global employee sentiment, and it found that one in five workers plan to quit their jobs this year. One fifth of employees.
Although a survey of 15,000 employees by Joblist found that almost half of respondents felt unsatisfied after quitting, it still shows a wave of unsettlement sweeping the workforce – and as a business owner myself, I was curious to find out where it's coming from.
I spoke to Evan Sohn, the CEO of Recuiter.com, to learn all about this global phenomenon and what we should know about it as business owners. Let's see what he had to say.
Evan Sohn, Recruiter.com's CEO
Evan Sohn is Chief Executive Officer of Recruiter.com. With 25+ years of experience in both Fortune 500 and start-up environments, Evan's got an impressive history of rapidly growing businesses, capturing market share, and multiple exits.
If you saw my interview with Evan on the Success Story Podcast, you'll have seen how incredibly knowledgeable this guy is on all things recruitment. Evan's team have their finger on the pulse of what's going on in the world of work, so of course, I was excited to hear his thoughts on this current crisis.
According to Evan, there are three main events happening at the moment in terms of the talent shortage; two are episodic, and one is systemic.
1. Global Talent Shortage
“The first is talent shortage," Evan explained. "You had all these companies that furloughed their people or shut down totally. And now you have 4 percent unemployment, you have 10 and a half million open jobs, it’s hard to get people to come back to work, salary increases, wage inflation, ghosting... that's episodic, because that will get resolved.”
What Evan's referring to here is the mad rush of jobseekers that occurred when the pandemic first hit. Businesses were forced to make quick decisions about their work forces. And as we know, for many employees, this meant layoffs and furloughs.
Now that things are starting to stabilize, though, businesses want their talent back – but the talent pool's already readjusted to a new normal, and they're not so keen to return.
2. The Great Resignation
The second episodic trend, according to Evan, is the so-called Great Resignation we've been hearing about and experiencing since early 2021.
When researching about it, I was surprised to read that this whole movement – the Big Quit, the Reshuffle, however you want to say it – was actually predicted by Anthony Klotz. He's an associate professor of management at Texas A&M University.
A couple weeks before resignation numbers started climbing to new heights, Klotz coined the 'Great Resignation' in an interview. Since then, though, he's come out to say that 'quitting's contagious' and has been a repetitive phenomenon.
Evan agreed with this; he explained that while the spike in resignation rates was dramatic, it was building on a trend that already existed.
"What most people don't recognize is the US churn. Every month, people quit voluntarily. In 2019, I think the average was 3.5 million people quitting every month. 4.5 million people quit in August [of 2020]. The reality is, it's the 'Greater Resignation', right? It's a million more. It's a lot. But it's still more."
That’s why Evan considers this wave of resignations to be episodic; the rates are high now, but they’ve been higher in the past, and they’ll come back down in the near future.
Why's It Happening?
As I suspected, the work-from-home movement has had a lot to do with this wave of new resignations. Evan explained that working from home is something a limited number of people had access to before the pandemic; now, though, it's become the new norm.
“We call it the Great Re-Evaluation; companies are changing the way they're thinking, employees are changing what they're thinking. That, too, is episodic."
Evan's right, of course. So many companies were forced to do things differently in order to stay afloat, like letting employees work from home. Individuals learned how to freelance, start their own businesses, or take on other creative side hustles to make up for lost income.
Something like 65 percent of US employees view WFH as their biggest factor when accepting or rejecting jobs. We've got a new appetite for flexibility, in other words – and employees are growing to expect bigger and better things from their employers, or it's quittin' time.
Terror Management Theory
If I'm going to find a silver lining in the past couple of disruptive and terrifying years, it would be the way we've been forced to reevaluate so many things we took for granted. The pandemic made us confront our mortality; it's also making us take a good, hard look at our careers.
It's no wonder so many people are quitting their jobs. They're realizing they don't have to put up with things they're unhappy with. This is what psychologists are calling 'terror management theory' – the theory that life-threatening events, deaths, and other traumas make us reassess our lives and change our behavior.
Do we like what we do? Do we want to keep doing it in the same way, or are we ready for a change? Are we being paid what we're worth, and do our employers value us? These are the questions leading to the Great Re-Evaluation.
3. The Job Hopper Economy
The third trend Evan identified is one he considers to be more systemic than episodic – so pay attention to this one, because he predicts we're only at the beginning of it.
“What's not changing is what we call the Job Hopper Economy. Sixty percent of all Millennials now have no problem leaving a company within six months. We're hearing clients say, ‘An employee started, and two weeks later, they left because they got a better job from someplace else.’”
Maybe you've experienced this since the pandemic began; you put hours of your time and thousands of dollars into recruiting and onboarding someone, only for them to jump ship. It's frustrating – and it costs a company between $15,000 and $25,000 to replace just one Millennial.
“Our parents and grandparents all said, ‘You’ve got to stay at your employer for at least two years or four years.’ That's out the door now," Evan explained. "This Job Hopper economy is really fueling so much craziness on the actual hiring and talent acquisition side of things.”
Why's It Happening?
I swear it wasn't long ago that everyone was talking about how to get Millennials to stay at their jobs for more than two years. And now we're in this situation where it's the complete opposite – employers are struggling to keep them around for even six months.
When Evan began to unpack the 'why' of job hopping, though, it all made sense.
“Interviewing today is a 15-minute video interview. It's a Zoom screen for 15 minutes. So let me get this right: I could interview anytime I want. If I'm home, or I'm working remotely or hybrid, geographically undesirable jobs don't exist anymore.”
Boom. It's all down to accessibility. Who needs to stay at a job they don't like when they can interview for a new one with the click of a button? Websites like LinkedIn and Indeed make job searching – and applying – so easy that it's no wonder people are hopping from one role to the next.
“There is no there is no longer a stigma of leaving a company. You're going to see people leaving companies at a far more rapid basis.”
And now that there's such a demand for talent, it's become a vicious cycle; people are hopping jobs, and they'll get accepted into their dream position due to sheer demand and shortage.
“Let’s assume you want to work remotely, right? If I want you to work for my company, it doesn't matter to me where you work, because I want your skills. So all of a sudden, now I could work from anywhere. I could work at any company I want. I can interview anytime I want.”
It's mind blowing to live in an era like this one – and it means that, as business owners and employers, we need to be rethinking our retention strategies.
What You Can Do About It
In light of these three trends – the talent shortage, the Great Resignation, and the Job Hopper economy – what should we employers and business owners be doing to fill our positions? Money can't win the best talent anymore; it's all down to the lifestyle you can offer, and whether it's better than your competitor's.
Since he's heavily involved in the recruiting and acquisition industry, I asked Evan to offer a few pieces of advice. I'm glad I did; he's got some incredible insights.
1. Get Used To a New Normal
Fact is, this new trend of job hopping has broken an age-old stigma of favoring stability over experience. It's no longer strange to leave a job after six months – and now that the stigma is gone, all the barriers are down.
“If you're running a company with 30 or 40 people in it, and used to hire three or four people a year, you're now going to be hiring eight to 12 people a year," Evan said. "And that's just to keep up with the people that are leaving.”
To me, this means we'll be making a few changes:
- Widening our acquisition budgets
- Hiring more full-time recruiters
- Implementing incentive systems for referring new hires
Adding to this, Evan suggested starting a 'talent bank' of sorts; keeping a backlog of resumes from impressive candidates that didn't quite make the cut, but could in the future. This way, you're never starting from scratch when a position unexpectedly opens up.
“I think every business owner needs to be thinking about their supply chain and pipeline, and they’ve got to be looking at candidates on a regular basis and building a bench of them.”
2. Hire Entry-Levels and Graduates
One stream of talent you can always rely on is the pool of graduates coming out of universities each year. They're fresh-faced and looking for experiences; expectations are low or non-existent, and they'll be grateful for the opportunity to learn and grow in your company.
“The other [strategy] is figuring out a way to hire entry level folks. You got to sit down with the employee and say, ‘Here's where you are today. Here's where I want you to be a year from now. And here are the steps towards getting there.’”
Offer entry-level candidates the opportunity to grow with your company, and they'll be more likely to stick around for the long haul. Of course, you're playing the long game with this one – it can take a few years for an entry-level hire to come into their own – but if you're patient, it'll pay off.
3. Evaluate Your Lifestyle Offerings
Let's face it; our employees are interviewing us these days, and not the other way around. It's time to get creative about the lifestyle we can offer our workers. Perks and benefits like free lunches, gym memberships, flexible hours, and remote working are no longer enough to tempt the best talent – we need to go above and beyond if we want to keep our positions filled.
“What we’ve seen in the last three years or so is the work-life balance becoming a bigger priority for candidates. We're seeing like candidates say, ‘Here's what's really important to me.’ And they're finding companies that are aligned with what's important to them.”
I don't think it's a good idea to change the entirety of your business to suit the latest trend, but it is important to be open to change and willing to adapt to the times. After all, the talent shortage isn't going anywhere – we need to find ways to make our companies more attractive, and that means moving to hybrid work models.
4. Get Ahead of the Game
Something I really appreciated hearing from Evan was his advice about getting ahead of the job hopper economy. Who says you have to hire someone and hope they stick around? Stay two steps ahead by specifying the duration of each job role up-front.
“You should be marketing that this is a 24-month position. ‘Hey, Scott, work for my company. It's a 24-month role, I'm gonna pay you a boatload of money to work for me for 24 months, but when the 24 months are over, you're free to go and do whatever you want.’”
This achieves a couple of things:
- It gives you an idea of how long someone is actually going to stick around, which can be helpful for budgeting and planning purposes.
- It weeds out those who are looking for a quick buck or a foot in the door – if they're not interested in a long-term commitment, they're probably not going to be the right fit for your company.
- It gives you two solid years (or however long the role is) to win the employee over as a long-term company asset.
Which brings me to the last piece of advice...
5. Work Hard to Win Them Over
When you take on a new employee, how much effort do you put into selling yourself and the company? If you're not working hard to win them over from day one, you're setting yourself up for failure.
It doesn't mean you have to bend over backwards – in reality, a lot of the strategies you can use are mutually beneficial.
For example, if you're constantly sending your employees to networking events and industry conferences, they get to build their personal brand while also representing your company. If you consistently offer learning and development opportunities, they get to improve their skillset while also becoming more efficient.
But that's not all. Are you building a connection with your employees? Are you making your workplace fun, inspiring, and challenging? Are you making it clear to each employee that they have a great future ahead of them at your company?
If not, it's time to start – especially in today's climate.
This stuff is pretty overwhelming to think about, especially if you're in the midst of a talent shortage in your own company. But I think it's crucial that we seek out people like Evan Sohn to shed some light on the current job market and what we can do to improve our chances of success.
To close out, I'll leave you with a final quote from the interview (watch the full thing here):
"I think what we're able to do now in this post pandemic world is not be all things to all people. Let's do the things that we want to do as a company.”
As you change your strategy to suit the changing times, don't compromise on your mission and values. Let that be your north star to finding and keeping the best talent.
Success Story Podcast
If you like the content in this newsletter, I host a Top 10 Business podcast, (with over 20m downloads) “Success Story”, where I unpack the playbooks of entrepreneurs, executives and other high performing individuals.
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