Our nation’s ongoing labor shortage has made countless headlines in recent months, and with good reason. From restaurants, to retail establishments, school environments to skilled trades, companies of all sorts have found themselves scrambling to fill vacant spots. The issue doesn’t just lead to headaches on the employer’s end. It can impact a company’s ability to carry out business. In fact, CBS News reports that 97% of small businesses surveyed by Goldman Sachs have said efforts to hire and retain workers are eating into their bottom line. And a number of companies have found themselves cutting back on hours due to labor concerns.
Now more than ever, it’s crucial for companies to understand issues surrounding the modern-day labor shortage, and poise themselves for success moving forward. Read on for insight from BCH’s risk management experts.
Key in on Factors Contributing to the Labor Shortage
It took several issues coming together to create the labor shortage we’re experiencing today, and COVID-19 accounts for a few of them. While some individuals opted to quit or retire early instead of working through the pandemic, others took new roles tending to children’s virtual school or ailing loved ones. Still more seem to have evaluated their working environment and decided their current situation no longer suited them. As news outlets shared stories of “The Great Resignation”, many people chose to seek something better, be that in the form of a position with higher pay, improved benefits or in a different industry altogether. (Of course, some number of employees seeking greener pastures is always to be expected.)
Consider the Impact a Worker Shortage Might Have on Your Business
A well-rounded risk management approach requires thinking through as many scenarios as possible, factoring in how your business might be impacted — and making efforts to stand prepared. But working out those scenarios can be complicated. What happens if the person in charge of your biggest accounts falls ill or leaves abruptly, or if multiple people leave at once? What if team members approach you asking for enhanced benefits or other changes? You have to factor in labor shortages outside of your business, too. Could you make do if suppliers’ workforce issues lead to slower deliveries or lack of product? What if issues on your clients’ end mean they have to pull back their business? Gather with management to talk through such concerns, and get your risk advisor involved, too. He or she will likely have assisted countless other companies with such obstacles and can pass trusted advice your way.
Take Steps to Keep Issues at Bay
A little communication goes a long way in the workplace, especially in terms of employee retention. Check with team members regularly to gauge overall attitudes, feelings surrounding the current environment and what your company could be doing better. Take time to evaluate company policies, too. Is your onboarding process where it should be? Are your pay rates on par with the industry? Do you have an employee benefits package that catches the eye and keeps people around? (If the answer is no, consider ways to right the situation.) Of course, if you do receive constructive criticism from the team, take it to heart — and, if possible, act on it. Few things are as frustrating to employees as expressed needs or concerns that go ignored. In fact, NPR’s Planet Money recently reclassified “The Great Resignation” as “The Great Renegotiation”, noting that it marks an opportunity for employees and companies to hammer out agreements.
BCH Tip: Our Labor Shortages and Liability Risks Sheet offers great advice to get you started. Download your copy!
Labor shortage issues can bring real strain to a company, but with a little strategy, some open communication and the right support by your side, it’s possible to come out ahead. If you have questions on any of the above, or if you’d like to learn about BCH’s risk management, business insurance and employee benefits offerings, feel free to contact our team. We’re always happy to help.