How to Solve Labor Shortage Issues
The largest area of concern for cleaning and security companies – and service industries in total – continues to be finding, hiring and retaining employees.
While other industries like tech, eCommerce and business services are beginning to layoff employees citing the economic crisis, many service-led companies are ramping up hiring efforts in response to employee churn.
Today’s labor market is still experiencing a shortage of workers who are willing to join (or rejoin) the labor market. According to the US chamber of commerce, there would be 3.05 million more workers in 2022 if labor force participation was the same as February 2020.
So, what are the reasons for low labor participation? How can cleaning and security industries work around those challenges to keep contracts fully staffed? We’re detailing the top reasons – and opportunities to combat them.
What is the labor force participation rate?
The labor force participation rate is labor market data defined as the rate of individuals working – or actively looking for – a job.
Why is the labor force participation rate declining?
1. Lack of flexibility.
The workforce — no matter the industry — is putting a higher value on company benefits like work-life balance as a result of the pandemic. Some common tactics companies are using to attract hires, like remote working options, just aren’t a viable option when it comes to physical security or cleaning positions. That’s where thinking outside the box for indirect compensation can play a part.
2. Low wages and access to resources
Low-wage employees experience higher rates of churn, and lower rates of loyalty and satisfaction, than higher earning counterparts. As cleaning and security companies face hiring competition within the industry as well as other industries (warehouse, retail, etc.) it is becoming more difficult for wages alone to incentivize employees to stay with one company rather than pivoting to a competitor. In this way, the balance of power has shifted from employers to employees.
3. Resistance to job requirements
As the balance of power has shifted from employers to employees, businesses are experiencing resistance to anything that could be viewed as added work. This might include the adoption of software in their daily work routine. In other cases, it may be that workers see a disconnect between the job they were hired to do and what they thought was represented on a job listing.
Solutions to labor shortage causes
There isn’t a one-size-fits-all solution to attract more applicants to your open jobs. Still, becoming an employer of choice can help you stand out in the competitive hiring market. Here are three ways your company can combat labor challenges and become an employer of choice.
1. Flexible schedules and/or flexible work
Use of a mobile job board for self-scheduling activities is a way to improve employee engagement and retention, with the added bonus of reducing high-cost activities like overtime.
Self-scheduling works by:
- Enabling employees to offer their shifts to others without needing to involve a scheduler or supervisor
- Others employees can then pick up the open extra work, keeping shifts filled and closing any gaps without needing to go back-and-forth with a manager
The ability to swap shifts depending on what works best for a worker at any given moment is a huge step in the right direction in terms of employee engagement. If an employee wants to pick up more work, they also have the ability to mark themselves as available. Schedulers can use this information when accommodating contract needs.
In the cleaning industry, this flexible scheduling is more difficult. Instead of flexible scheduling of shifts, see if there are opportunities to flexibly schedule work. Some clients will always require periodic cleaning frequencies, but others may benefit more from demand-based cleaning, where areas are only serviced when there is a need.
Use facility usage data — gathered from software features like mobile forms, checkpoints, audits and more — to better understand foot traffic and facility usage, taking note of instances when services are needed
With a better understanding of needs, and the resources you have available to meet those needs, you could potentially:
- Reduce cleaning hours and intervals
- Eliminate non-essential cleaning rounds
- Reallocate resources to other critical areas
- Increase quality of services
- Reducing employee burnout and fatigue
2. Earned wage access
TEAM Software by WorkWave recently reported the cleaning and security industries are racking wage growth above the rate of inflation in the US.
Although the European and Asia-Pacific regions have also experienced growth in earnings, the average wage is tracking below inflation rates; the UK reporting an approximate 4% difference and Australian wages growing less than half the pace of inflation.
If you haven’t already adjusted for inflation, you may want to determine if there is room for wage growth within your company. If you can afford to be on-par with benchmarks, you may be able to attract interested applicants away from competitors.
If you can’t afford to adjust wages any higher, explore other benefits that can increase the frequency in which employees are paid, without negatively affecting cash flow or complicating payroll processes.
Earned wage access provides a way for employees to receive payment for hours worked, without having to wait for the next pay cycle to process. In service industries, one of the biggest barriers employees face in succeeding at a field job is the reliability of their transportation.
Sometimes, the gap between paychecks impacts a worker’s ability to afford transit, let alone living expenses. This can make a big difference in employee financial wellness even during times of economic stability.
“Initiatives like this really center around improving the welfare of our employees. It gives us a way to provide a real benefit to our employees – employees whose needs may outpace a regular payroll cycle.” – Matthew Wilson, GardaWorld.
3. Be transparent and communicative about job requirements.
To lessen the risk of new hire churn, make it clear what will be expected of them from the job from the very first posted job listing. Reiterate requirements throughout the hiring process, including the necessity of using software to start and end work and complete every task in between.
While there may be resistance to change, including the adoption of workforce management software and apps in the workplace, it’s important to remember the long-term benefits such initiatives have on your business as a whole.
In the cleaning and security industries, software is intended to increase efficiencies and protect profit margins, while reducing risk and redundancies that often occur using pen-and-paper or manual processes. Involve stakeholders from all across your business – including those in the field – in the implementation of any new promises. This helps create buy-in at every organizational level and develops advocates for its correct usage.
Finally, make any new process as easy for your employees as possible. Mobile apps should be intuitive and user friendly. Consolidate as much as you can when possible to reduce the amount of logins and reconciliations required. If your software requires an audit procedure, for example, make sure to select one that operates from simple questions that are easy to answer from the field, but takes into account set targeted levels of quality to automatically calculate inspection results. That way, you’re simplifying the work needed on your field employee, but still gathering all necessary information for advanced proof of service and quality assurance.
Dive into more labor market data
The labor market is always changing. TEAM Software by WorkWave is dedicated to helping keep you informed of the latest trends – and how to make them work for you.
Learn more in our recent data report: 2023 Labor Trends and Forecasts for the Cleaning and Security Industries.