The U.S. unemployment rate is at a 50-year low, currently sitting at 3.8%. The economy seems to be firing on all cylinders, people are working and actually getting raises, and Democrats and Republicans are putting political differences aside for the betterment of the country.
OK, maybe only the first two are true … but two out of three isn’t bad. So what’s the problem?
While good for employees, a low unemployment rate is problematic for employers. There simply aren’t enough qualified workers out there to hire. Ask any small (or large) business owner, that is their number-one issue and concern. A dearth of skilled workers can stifle productivity and growth.
At the local level here in Wisconsin, the problem is even worse. The state’s unemployment rate is 2.9% and Madison’s is 2.2% (according the March 2019 report from the Bureau of Labor Statistics).
Since competition for workers is so competitive, what can an employer do – outside of outright begging – to get someone to work for them?
One way is to overpay for new hires, but that hurts the bottom line and can be a slippery slope, quickly leading to an untenable situation from the perspective of the hiring business. This option risks alienating the current workforce, and would likely result in a commensurate raise in their wages too.
There’s no easy answer, but one effective course of action is simply highlighting your business’s benefits package, and putting its value into terms that a prospective employee can understand. I’m always shocked when I ask people looking for a new job what the company contribution to their retirement plan is and they don’t know. It’s because they don’t ask – they’re only worried about the hourly wage or annual salary number.
This might be overly simplistic, but putting together a written “total compensation” offer sheet could gain your company an edge over its competitors. It may look something like this:
Base Salary $50,000
401(k) matching contribution $2,000
Employer contribution for healthcare $3,000
Total Compensation Package $55,000
It’s one thing to explain the above information in the context of an interview. It’s another to put it in writing. If your company is not already presenting these types of offer sheets to prospective employees, there’s no better time to start than the present.