The U.S. is in the midst of a labor shortage, with employers struggling to fill positions critical to the economic reopening.
As ManPower Group CEO Jonas Prising told Yahoo Finance this week, childcare and health care concerns are keeping people out of the workforce, and hires per open positions are at historic lows. The number of new job openings surged to a record high of 9.3 million in April, according to the Labor Department’s latest JOLTS report. The rate of workers voluntarily quitting their jobs also hit an all-time high of 2.7%.
According to Nick Bunker, head of research at Indeed’s Hiring Lab, one strategy has worked for companies in generating interest from workers: loudly announce that they’re paying more.
This is pretty obvious, Bunker notes. (“It’s what you’d expect an economist to say, right?”) It’s even the butt of a new Onion bit, “Desperate Employer Offers Basic Dignity To Incentivize New Hires.”
But the very obvious strategy doesn’t end there. It’s not enough simply to offer relatively high wages — you have to get people to apply and also simply to know these opportunities are going to be more lucrative.
“Searches on Indeed of businesses that publicized large, companywide wage hikes rose dramatically in the days after the announcements,” Bunker wrote in a post on Indeed’s site.
Bunker and Indeed charted out five big, splashy announcements from Amazon (AMZN), Bank of America (BAC), Chipotle (CMG), and McDonald’s (MCD) and found some patterns that showed spikes in the days after those companies said they were raising wages. Bank of America saw a 370% increase in searches for its jobs; Chipotle saw an 89% surge; and McDonald’s saw 24%.
These search patterns echo those from a few years ago when, in 2018, Amazon announced it would pay a $15 minimum wage and saw a 243% spike in searches on Indeed.com (though that’s much lower than the more recent announcement of wage increases that saw a modest 24% spike). In the days following, the numbers cooled off, suggesting a temporary nature for the big effects at least, though Bunker pointed to a smaller long-lasting effect for worker interest.
Whether this converts into actual job applications and hires is unknown, however.
“While it’s not clear what fraction of these increases led to actual hires, employers competing for workers need to grab attention. Raising pay — and making sure to advertise it — can do just that,” Bunker wrote.
The problem for smaller businesses, however, is that they may not be able to parlay one of these moves into national news headlines that give them free publicity — which requires some creative thinking. But factoring in the importance of advertising good pay, not just writing the checks, is a key for companies to get through this labor pinch point.