Causes of Current Recruiting and Retention Difficulties and Strategies to Overcome Them
January 26, 2022
Causes of Current Recruiting and Retention Difficulties and Strategies to Overcome Them

Employee attraction and retention have become major obstacles for most employers more so now than ever before. In fact, 67% of employers today consider attraction and retention somewhat of a challenge, according to Zywave’s 2021 Human Resources Benchmarking Overview. Most companies, regardless of industry are experiencing a change in candidate and employee behavior and expectations. These changes in employee/candidate expectations and behavior are rapidly driving necessary change in recruiting and retention strategies. To be competitive in the current market employers must adapt to these changing behaviors and expectations.


Causes of Recruiting and Retention Difficulties


The past 2 years of a global pandemic have rapidly and significantly impacted how we interact within our world. These changes have impacted our economy, social interactions, political landscape, healthcare system, etc. One of the most dramatic changes brought on by the pandemic has occurred between in our interaction and expectations between our personal and professional lives. This has created a change in the psychological contract aka mutual beliefs, perceptions, and informal obligations between an employee and employer.


The COVID-19 pandemic has been the catalyst that created a shift in thinking about what matters most in our lives. It has created a new set of priorities for people and revolutionized the idea that our personal and professional lives must be separate from one another and that they should have as little impact as possible on one another. Employees and prospective employees are now becoming less concerned with job stability and more likely to initiate job/career changes due to opportunities for better pay, benefits, and flexibility.


These expectations, coupled with external factors, have led to supply and demand issues within the labor market and created both a ‘Talent War’ and ‘The Great Resignation’. During the pandemic there was an increase in the unemployment rate and jobs available coupled with low levels of participation in the workforce. This formula created an environment that provided employees the power and motivation to change employers, jobs, and careers. Historically, employers were the entities with the most amount of power; this has since shifted to employees and prospective staff. Employees are now resigning at record rates due to the surplus of available job and ability to choose how, when, and where and why they want to work. Experts believe that supply and demand for workers will eventually come back into balance but that many of the changes in how companies recruit and hire talent will remain long after the pandemic subsides.


Strategies

Develop an Employee Value Proposition (EVP)

 It is essential that employers strategically develop an Employee Value Proposition (EVP) that is unique to their company. “It encompasses the central reasons that people are proud and motivated to work there, such as the inspiring vision or distinctive culture. It is crucial to make sure your EVP is unique, relevant, and compelling. When integrated into all aspects of a business, a strong EVP will help retain top performers and attract the best external talent.”


*Flexibility in Work/Life Balance*

Work should enhance an employee’s quality of life; not decrease it. Work-life flexibility is about creating a culture where employees meet the demands of their personal lives while maintaining high levels of work performance. Companies that prioritize work/life balance statistically experience higher levels of productivity/performance and overall employee engagement.


Reflect on what arrangements are possible and realistic for your organization and consider the following:


  • Re-vamp or consider providing enhancing PTO/Sick/Personal time
  • Provide flexible working arrangements
  •   Remote work
  •   Flextime
  •   Condensed scheduling
  •   Job sharing
  • For front line workers who can’t work remotely flexibility and predictability in scheduling is vital


Conduct Salary Benchmarking

“Salary benchmarking helps your organization to ensure that your internal pay rates remain competitive within your local pay markets. In today's competitive talent landscape, benchmarking allows you to assess how you're positioned relative to market, enabling you to make smart pricing decisions that enable you to attract and retain top talent. While salary benchmarking is a critical part of the annual compensation cycle, it is ultimately only as good as the data - and the process - through which you benchmark.”


Benefits

“Health benefits are always important and it’s no surprise that the Covid pandemic has placed them front and center. According to a recent employee benefits survey, when choosing between a high-paying job and a lower-paying job with quality health benefits, 88% of employees would consider the lower paying job.”

Consider adding or increasing the employer contribution the following benefits…


  • Medical, dental, vision,
  • HRA, FSA, HSA
  • 401(k)
  • Employee Assistance Program
  • Fitness perks
  • Discounts for products/services
  • Health, legal, and financial counseling
  • Leave to care for self and/or family members
  • Allowances for home office technology


Reimagine Professional Development 

Offering learning and development (L&D) programs can be a powerful investment in a company’s future success. It can encourage lateral and upward internal growth and allow your company to stay up to date with changing industry knowledge and trends. L&D also aids in succession planning.


  • Provide tuition reimbursement or a learning allowance
  • Encourage participation in professional organizations
  • Provide opportunities for increases in duties and responsibilities
  • Provide mentorship or leadership development programs
  • Create internal career paths


Streamline Employee Application and Hiring Process

Optimize your job posting and simplify the application process by reducing the number of steps to apply for a job. “According to some studies, 60% of job candidates abandon their online applications because the process took too long or was too complex (some estimate the rate is even higher). For employers, this churn results in loss of top talent, reduced ROI on recruitment investments, and potentially bad reviews from would-be candidates.”


  • Be innovative and incorporate the company’s mission, vision, values into the process
  • Utilize a realistic recruiting technique in provide positives and negatives of the job
  • Be actively engaged in company banding use of social media
  • Personalize a candidate’s experience by telling a story/playing to the human experience
  • Speed up the hiring process, many candidates have several offers to choose from
  • Improve communication at every step in the process


Re-Vamp Employee Referral Programs

Employee referral programs help increase attachment to the organization and make employees feel as though they have a stake in the future of the business.


  • Reduce hiring time & recruiting costs
  • Increase employee retention rate
  • Increase ease in recruiting for hard to fill roles


If you need assistance with implementing any of these strategies, please contact your Simco HR Account Executive.

 



Sources:

https://www.michaelpage.co.uk/advice/management-advice/attraction-and-recruitment/create-great-employee-value-proposition#:~:text=An%20employee%20value%20proposition%20(EVP,they%20bring%20to%20a%20company.&text=When%20integrated%20into%20all%20aspects,attract%20the%20best%20external%20talent.

https://www.peoplekeep.com/blog/the-most-important-benefits-to-employees

https://www.salary.com/blog/understanding-the-salary-benchmarking-process/#:~:text=Salary%20benchmarking%2C%20also%20called%20compensation,pay%20rate%20for%20each%20position.

https://www.lucidchart.com/blog/how-to-streamline-the-job-application-process

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Top 5 HR Trends That Will Shape Businesses in 2025

January 7, 2025
As 2025 kicks off, the HR landscape is evolving faster than ever before. Technology, shifting workforce expectations, and the need for businesses to be agile in a dynamic global environment are all driving change. What worked yesterday may not be enough today, and companies must adapt to stay ahead. Here are the top five HR trends you’ll need to watch closely in 2025: 1. AI is Changing the Hiring Game Artificial intelligence is no longer just a buzzword in HR—it’s a game-changer. Tools that can scan resumes, match candidates to roles, and even conduct initial assessments are becoming staples for businesses aiming to save time and improve hiring outcomes. In 2024, many organizations began integrating AI to remove unconscious bias and make their hiring practices more inclusive, and this trend is expected to accelerate. 2. Flexibility Isn’t Just a Perk Anymore Hybrid and remote work models are here to stay, but the conversation has shifted. In 2025, it’s less about offering flexibility and more about making it work effectively. Companies are adopting sophisticated tools for remote collaboration, redefining performance metrics, and ensuring policies address the nuances of managing both in-office and remote teams. The focus is on maintaining productivity without compromising employee well-being. 3. Wellness Goes Beyond Gym Memberships In recent years, wellness programs have evolved beyond basic offerings like gym memberships to address a wider range of employee needs. As companies recognize the link between employee well-being and productivity, they’re broadening their focus to include mental health, financial stability, and holistic support. In 2023 and 2024, for example, Delta expanded its employee wellness initiatives by improving access to mental health care. The airline worked with Spring Health, a new EAP provider, to create a larger and more diverse network of mental health professionals, offering better support for both employees and their household members. Looking ahead to 2025, wellness will become more deeply integrated into company cultures. Expect companies to go beyond providing reactive support to fostering proactive wellness through personalized tools, such as mental health apps, financial coaching, and enhanced benefits like paid leave for caregiving. With these programs, businesses are not just addressing immediate health concerns but also empowering employees to manage their overall well-being in a more holistic way. The focus will be on creating a supportive, sustainable work environment that helps employees thrive both at work and in their personal lives. 4. Upskilling is a Competitive Necessity Technology is evolving faster than ever, and companies are racing to keep up. Upskilling employees in areas like data analysis, AI, and emerging tech became a priority in 2024, and it’s clear that this trend will only grow. Businesses that invest in continuous learning programs—whether through certifications, on-the-job training, or digital learning platforms—are better positioned to stay ahead in their industries. 5. Data is Driving HR Decisions HR is leaning heavily on people analytics to guide decision-making. Instead of relying on intuition, businesses are using data to understand employee engagement, pinpoint reasons for turnover, and improve productivity. The emphasis on metrics like employee sentiment and workforce utilization gained traction last year, and more organizations are embedding analytics into their HR strategies to tackle challenges proactively. Final Thoughts The HR landscape in 2025 will be shaped by these transformative trends. Businesses that embrace innovation and prioritize their people will find themselves not just adapting but thriving in the evolving workplace. As these trends unfold, staying proactive and flexible will be the key to turning challenges into opportunities.

IRS Announces 2025 PCORI Fee Update

January 6, 2025
The IRS has released the 2025 Patient-Centered Outcomes Research Institute (PCORI) fee , which will increase to $3.47 per covered life —a $0.25 increase from 2024. This fee applies to plan years ending on or after October 1, 2024 , and before October 1, 2025 . What is the PCORI Fee? The PCORI fee was introduced as part of the Affordable Care Act (ACA) to help fund the research conducted by the Patient-Centered Outcomes Research Institute (PCORI). This research focuses on improving healthcare outcomes by comparing different medical treatments. The fee is levied on insurers, as well as self-insured and level-funded health plans. The fee is calculated based on the average number of covered lives under a plan and is due once a year, with the filing occurring during the second quarter on Form 720 , the Quarterly Federal Excise Tax Return . The payment is due by July 31 each year. Key Details for Employers and Plan Sponsors Who is Affected? : The fee applies to health insurers, self-insured health plans, and level-funded health plans. When is it Due? : The fee must be reported on Form 720 and paid by July 31 each year. How is it Calculated? : The fee is based on the average number of covered lives during the plan year. The updated $3.47 per covered life fee will be in effect for health plans with policy years ending between October 1, 2024, and October 1, 2025. Employers should be prepared to account for this increase when filing for 2025. For more information on the PCORI fee and its reporting requirements, consult the IRS Bulletin 2024-49 , published on December 2, 2024, or visit the IRS PCORI Fee page . 

Federal DOL Restores Simplified Tip Credit Rule: Employer Guidance

January 6, 2025
In a move welcomed by many employers in the hospitality and service industries, the U.S. Department of Labor (DOL) has officially reinstated the pre-2021 tip credit rule. This change, effective December 17, 2024, follows a recent court of appeals decision that vacated the “80/20/30” tip credit rule that had been implemented under the Trump administration. If you’re wondering what this means for your business, don’t worry—this update doesn’t require any immediate action on your part. What Was the "80/20/30" Rule? Before we dive into the implications of the DOL’s latest rule change, let’s quickly review the "80/20/30" rule. This rule, introduced in 2021, placed specific restrictions on how much time tipped employees (such as waitstaff and bartenders) could spend on non-tip-generating duties (e.g., cleaning, setting up, and other side work). The rule essentially required that tipped workers spend at least 80% of their work hours on tip-generating activities to continue qualifying for the tip credit. Moreover, under the "80/20/30" rule, employers could no longer use the tip credit to offset wages for certain non-tip-producing activities, and they had to ensure that employees spent no more than 30 minutes at a time on side duties. This increased the burden on employers, as it required more careful tracking of employee duties and work hours to remain in compliance. Why Was the Rule Vacated? The court of appeals decision in August 2024 ruled that the "80/20/30" rule was too restrictive and inconsistent with the intent of the Fair Labor Standards Act (FLSA), which allows employers to take a tip credit for workers who perform both tipped and non-tipped duties. The court found that the new rule created unreasonable administrative burdens and restrictions that were not in line with past practices or legal precedents. In response to this ruling, the DOL moved quickly to restore the pre-2021 tip credit rule. What Does the Reinstatement of the Pre-2021 Rule Mean for Employers? With the reinstatement of the pre-2021 tip credit rule, the DOL has effectively simplified the way employers can apply the tip credit to their workers. Under the prior rule, employees who perform a combination of tipped and non-tipped duties can still qualify for the tip credit, as long as their primary job responsibility is related to tipped work. Employers no longer have to track the precise breakdown of time spent on tip-generating vs. non-tip-generating activities in the same way. This returns to the more flexible guidelines where as long as tipped employees perform "related" duties (e.g., cleaning their station, setting up for service), they can still receive the tip credit for those hours, provided those activities don’t dominate their workday. What Action Is Needed from Employers? For most employers, this change will not require any immediate action, as the final rule effectively restores the pre-2021 approach. The main thing to note is that employers should continue to comply with the broader requirements of the Fair Labor Standards Act (FLSA) and ensure they are properly paying employees at least the federal minimum wage (including tips) when they apply the tip credit. Here are a few things to keep in mind: Reassess Timekeeping Systems: While the rule change simplifies some aspects of record-keeping, employers still need to ensure they have a timekeeping system in place that accurately tracks the hours worked by tipped employees. It is essential to ensure that the wages (base pay plus tips) equal at least the federal minimum wage. No Need for Immediate Adjustments: If you were already applying the pre-2021 tip credit rule, no changes are necessary on your part. For those who had adjusted to the "80/20/30" rule, reverting back to the previous method should not require significant changes. State and Local Laws: Employers should still be mindful of any state or local laws that may have stricter requirements than federal law. Always check your state’s labor regulations to ensure full compliance. Why Is This Change Important? The reinstatement of the simplified tip credit rule provides relief to many employers, particularly in industries like restaurants, hotels, and other service-based businesses where tipping is common. The pre-2021 rule is seen as more employer-friendly, offering more flexibility in how tipped employees can spend their time without losing eligibility for the tip credit. For employers, this means less administrative burden, reduced risk of compliance issues, and potentially fewer legal challenges. This shift is a step toward simplifying labor law compliance for businesses already struggling with the complexities of wage and hour rules. Looking Ahead As we move further into 2025, it’s important for employers to stay informed of any future changes in federal labor regulations. While this change restores a previous rule, the DOL’s stance on tip credits and wage issues can continue to evolve. Employers in tip-dependent industries should continue to monitor updates from the Department of Labor and legal rulings to ensure ongoing compliance. The DOL’s restoration of the pre-2021 tip credit rule is a welcome change for many businesses, offering a return to simpler guidelines and less restrictive requirements. For most employers, no immediate action is required, but it’s always a good idea to review your practices to ensure they align with the updated rule. If you need further assistance in navigating these changes, reach out to Simco to ensure your business stays compliant in 2025 and beyond. 

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