Lower paying jobs are experiencing higher churn rates today. According to a CNBC|Momentive workforce survey completed in the fourth quarter of 2021, exactly half of U.S. workers describe their companies as being understaffed, and these workers are more likely to say they have recently considered quitting. Respondents say higher wages for new hires are a must in the current job market, but existing workers will also need to see pay raises as the starting point for sticking around, and many are expecting a pay bump in 2022, according to the survey. Sandra Grinker, a principal with AEA Investors, says COVID impacted people’s professional work choices. For example, if you look at geographic locations with distribution centertype jobs, they are usually located near other distribution facilities. “Many industries are seeing intense competition for talent. Even doing things like offering employees transportation, free breakfast, or $1 more an hour is meaningful and is fueling turnover in many types of jobs,” says Grinker. “It’s well publicized that people are reevaluating their lives since COVID and many have decided to make changes. People have changed careers, looked for different positions or decided to retire.” How firms are searching for talent has changed as well. In 2020, most firms relied on their network to find talent (42%), with only 10% using online methods. While most still rely on their networks, use of online methods has nearly doubled. In 2021, 19% of respondents said they are using online methods to advertise for openings while fewer are using headhunters. “Digitization and automation of human resource operations is driving innovation. Advances in the latest technologies, such as AI and
It’s well publicized that people are reevaluating their lives since COVID and many have decided to make changes. People have changed careers, looked for different positions or decided to retire. Sandra Grinker Principal, AEA Investors
predictive analytics, are facilitating the integration of human resource management solutions with analytics. The industry has a strong emphasis surrounding attracting the right pool of candidates, retaining human capital and performance management. Startups are developing solutions to address remote workforces, promote corporate culture, streamline and improve onboarding, benefits, collaboration, training and more,” says Miller. Technology in the human resources sector is indeed growing. According to Fortune Business Insights’ report, “Human Resources Technology Market, 2021-2028,” the global market size was $22 billion in 2020 and $24 billion in 2021. That is expected to grow to $36 billion in 2028. In 2021, AEA used LinkedIn for select talent searches—something Grinker wouldn’t have contemplated previously. “Up until recently, we only used headhunters. What we get from our headhunters is high quality, but lower volume, so by incorporating LinkedIn as a recruitment tool, we have increased and diversified our talent pool,” says Grinker. Using
LinkedIn increased the firm’s flow of candidates and gave them access to people they may not have been aware of, which was great for diversity, equity and inclusion initiatives. Additionally, Grinker felt using technology during the hiring process is more helpful for certain positions. For example, technology-focused positions, like data scientists, are more likely to apply for jobs through technology platforms. “While I might not use a tool such as LinkedIn to source candidates for all of our positions, we have been pleasantly surprised by some of the leads obtained through tech-enabled recruiting platforms. It is definitely more time-consuming weeding through hundreds of candidate profiles online, however, the pool of talent is so tight right now that we all have to be a little creative, and for some positions online tools can work well,” says Grinker. As a result of the talent shortage, it seems firms are looking to hire more quickly than they have in the past. In 2020, only 6% of firms would hire C-suite positions immediately after closing a deal; that number has jumped to 16% in 2021. However, the
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