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Posted by Rowan O’Grady on Thursday, Feb 1, 2018
What can you expect from 2018?
Employer confidence and hiring expectations are back at 2013 levels
Survey results show confidence in the economy and business activity is back to 2013 levels — before the oil and gas downturn. Last year, employers were cautiously optimistic, and many hoped for stability. It looks like that optimism was rewarded, with most employers saying business activity did increase. Three years have passed since the start of Canada’s oil and gas downturn and business activity growth is now at a five-year high, and hiring has also rebounded.
Contingent workforce is an increasingly important part of an agile workforce
One-third of employers increased their use of temporary staff in 2017, which was twice the rate expected, and another quarter say their contingent workforce will grow in 2018. This signals a huge demand for temporary and contract candidates but also exposes a problem with business forecasting.
Unanticipated talent demands have ramifications for HR, finance, legal, and procurement departments because companies may not have resources in place to ensure compliance and manage risk. Looking ahead to next year, I hope organizations will spend more time calculating business needs and auditing their contingent workforce. This will help ensure they are meeting day-to-day obligations as well as compliance and risk reduction best practices.
Compensation is a potential crisis for retention
This year, employees doubt their compensation is at market rate. Managers are boosting salary offers to attract specific candidates, and HR teams are worried about competitors who can lure talent by paying more. Despite these concerns, less than a quarter of employers say they will raise salaries by more than three per cent in 2018. So, while everyone is worried about compensation, there are no big changes on the horizon. This could turn into a retention headache for managers and employers.
If candidates think the only way they can increase their salary is to change jobs, workplace turnover will undoubtedly increase across many industries. We could also see counter offers become more common as employees leverage a new job offer to negotiate better terms in their current role. Implementing regular salary band reviews is critical to ensure your company stays competitive. Connecting with industry experts will help you get the best information about market rates. In addition, have frank conversations with staff about their current compensation and expectations for the year to come.
Employers could face increased churn if they can’t solve their retention woes
Last year, we said employers needed to take a targeted approach to talent attraction and retention, and focus on individuals who would make the biggest difference within their organization. It looks like employers did just that.
The market has recovered and confidence is high. It’s time to broaden the focus to the rest of the team because concentrating on just the top 10 per cent could leave organizations with a lot of empty desks. Securing a star player while your team attrition rate hits 50 per cent won’t help you meet business objectives. Talk to industry experts and use this salary guide to ensure salary bands are already at or above market rates. If organizational salaries are in line with market expectations, look at other ways to attract and retain. When candidates or employees evaluate a job or offer, salary is important, but the combination of culture and career growth opportunities can be equally or more important. Read more about this in my recent Globe and Mail editorial.
Engaging your internal and external network is business critical
Old models of recruitment and retention don’t work anymore. To find, secure, and keep top talent you need to engage them consistently and continually. Share success stories, re-engage staff with new projects or opportunities to learn, and communicate about the programs and benefits you offer that make your company a great place to work. Recruiting isn’t as simple as the old “advertise and apply” model that ruled since we were still advertising in newspapers. While job boards still have a place in the hiring process, you are only accessing a small percentage of active job seekers and the person who is right for the role may not be looking. Take a “find and engage” approach by building a network of potential candidates, creating a talent pipeline for when you have an opening.
As you’re planning for 2018, ensure your contingent workers are compliant, compensation is competitive, and that you have a clear retention strategy. Companies that are proactive about keeping up with these workforce concerns will better attract, engage, and retain the talent they need to be successful.