How to Leverage Remote Hiring for Employee Retention

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 center- type 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 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

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

What is the outlook for your portfolio companies in terms of hiring in 2022? How are you incentivizing employees?

60

58%

50

40 50

40%

40

30

20

10

23%

6% 13%

0 Our portfolio companieswill be hiring becausethey are expandingOur portfolio companies will only be hiring if theyare replacing someoneOur portfolio companies will not be hiring this year Other

30

20

17%

14% 22%

10

5%

2%

0 More work fromhome options Higher salaryBetter health and wellness options BonusesMoney toward continuing education Other

timeline for when the actual hiring process begins does not seem to be changing. In 2021, 30% of respondents started searches for new hires prior to the deal closing. That was the same in 2020. Forty-five percent may start the search prior to the deal closing but make the final hiring decisions after the close. Only 25% do not dedicate time to hiring prior to close.

Going forward, hiring isn’t expected to be easier as many firms are looking to expand in 2022. Almost 60% of survey respondents said their portfolio companies will be hiring in 2022 because they are expanding; that’s up from 39% in 2020.

“We’ve never been busier with hiring. We are growing and so are our portfolio companies. We’re hiring everyone from associate level professionals to principals,” says Knapp.

In addition to expanding, companies are also increasing headcount in HR. “Companies are adding new positions like wellness directors and DE&I professionals to the rosters every day. The roles and titles vary depending on size and other factors, but overall, it’s a great thing,” says Miller.

In the private equity world, HR professionals are hoping that after bonuses are paid in January, they may see some relief in the search for talent. “More than ever, search firms are watching when the bonuses hit to see if people are happy or will be moving on,” says Knapp.

Grinker says that industry-wide, firms are seeing an increase in pay to keep pace with the market. “There has been an uplift in base salaries for many positions already. It will be interesting to watch how across the industry, things look after the bonus cycle and when firms return to the office full time. A lot of firms are still hybrid and plan on a full return in January. At that point, there may be more movement,” says Grinker. //

In 2020, companies were forced into remote work to reduce the effects of the pandemic. Supported by online tools, companies around the world adopted this new system with the purpose of reducing the health risks of Covid19, but it also had an unexpected result: a better work-life balance for millions of employees. Now, people are willing to quit their jobs and look for one that does not require them to go to a physical office. In this scenario, remote hiring has become crucial to ensure talent retention.

According to a survey by CFO Research of Industry Drive and Globalization Partners, decision makers understand the relevance of remote hiring and think it is a way to achieve success. The poll included 215 finance executives in North America, the Asia-Pacific region (APAC), as well as Europe, the Middle East, and Africa (EMEA). Statistics showed that CFOs were optimistic about their results for 2021; 93 percent believed that their companies would meet or exceed their goals and expectations. Perhaps the reason for this optimism is the global positive perception of the work-from-anywhere model and the new possibilities afforded by remote hiring.

The coronavirus pandemic was a breaking point that cleared many experts’ doubts. Seventy-five percent of the CFOs polled affirmed that this worldwide crisis altered the way they thought about hiring and workforce management. Additionally, 81 percent changed their point of view about remote employees for the better, and 74 percent anticipate operating under a hybrid or remote model during the upcoming year. Thanks to this paradigm shift, companies started tapping into a global talent pool, accessing employees everywhere in the world. Eighty-five Please indicate which of the following operating models your business anticipates operating under for the next 12-18 months?

Hybrid or remote workforce On-site workforce Hybrid or remote workforce Don’t know/Not sure On-site workforce Don’t know/Not sure

24%

2%

0% 10% 20% 30% 40% 50% 24%

2% 74%

60% 74% 70% 80%

0% 10% 20% 30% 40% 50% 60% 70% 50% Good work/life balance 41% Being part of a team 38% Having the right tools j /equipment for the job 36% Being listened to/having feedback considered 36% Compensation 35% Good communication methods 33% Concern for my well-being 33% Career development and progression 28% The physical working environment 13% The onboarding process 6% No aspects of my job contribute to me enjoying a positive experience with my current employer

80% g g

Good work/life balance Being part of a team Having the right tools j /equipment for the job Being listened to/having feedback considered Compensation Good communication methods Concern for my well-being Career development and progression The physical working environment The onboarding process No aspects of my job contribute to me enjoying a positive experience with my current employer 0 10% 20% 30% 40% 50%

50% 41% 38% 36% 36% 35% 33% 33% 28% 13% 6%

What aspects of your job contribute to you enjoying a positive experience, if you have one, with your current employer? g g

0 10% 20% 30% 40% 50%

Source: www.globalization-partners.com/blog/2021-global-employee-survey

percent considered hiring talent with the appropriate skills in more cost-effective jurisdictions to be of interest to them and to their company’s key stakeholders.

The Great Resignation

What began as a temporary solution became not only a viable permanent option but also a new way of management. The effects of remote hiring on work experience inspired a movement called “The Great Resignation.” Employees are quitting their jobs and looking for places where they can keep working remotely. According to the U.S. Department of Labor, in April, May, and June, a total of 11.5 million workers quit their jobs.

This is supported by the recent Work Trend Index by Microsoft which showed that more than 40 percent of the global workforce desired to leave their current job during 2021. Companies have been taking advantage of remote work to hire talent anywhere in the world, but those planning to return to the office must find ways to keep hold of that talent. As stated in The 2021 Global Employee Survey, conducted by Globalization Partners, the way people feel towards their jobs changed after the transition to remote work in 2020. This research gives in-depth insights into employees’ sentiments toward their remote work environment, their intention to stay in their current roles, and their overall job satisfaction.