For the past two and half years, 3 million Americans quit their jobs, every month.
And that number only reflects “voluntary” turnover, meaning it doesn’t include layoffs or other types of involuntary terminations. To put that in perspective, that is more people quitting their jobs than live in the entire state of Mississippi – each and every month since July 2016.
I mention this fact large in part because I’ve just returned from JVH’s annual Temecula Parking Group thinktank and the NPA show in Vegas where the topic of recruitment and hiring seemed to be high on everyone’s agenda. This wasn’t particularly surprising to me.
We have seen an incredible amount of interest and activity in the parking industry from venture capital investments to major automotive companies acquiring and partnering with parking technology companies to a flurry of new startups and businesses aimed at facilitating parking and supporting the industry. Combine this with the record low unemployment levels and the record high number of job openings, and we have a “candidate’s market” where parking employers are increasingly competing to attract and retain talent.
Welcome to Today
It’s been ten years since the Great Recession began – a time for those who were in the workforce won’t soon forget, myself included – and while I’ve read grumblings of economic troubles coming and the stock market has seen volatility in recent days (I’m writing this two days before the midterm elections) – there is evidence of real confidence coming back in how many Americans feel about their economic situation or potential.
I say that because of this: more Americans are willing to consider changing jobs or positions, including if that requires changing employers, to get a pay raise. And because candidates and workers truly do own the market today, they are in every position to negotiate a more competitive wage (remember – don’t hate the messenger, I’m only stating the truth)!
Consider these 2018 statistics:
54 percent of American employees would consider changing jobs to get a pay raise.
44 percent of American employees would consider taking a job with a different company for a pay raise of 20 percent or less.
As of August 2018, 22 percent of workers were planning to find a new job before the end of the year.
Wage Stagnation Will Pay Its Toll
While parking industry employers do need to step up their recruitment efforts and improve their overall hiring processes to improve the candidate experience, there is another common underlying issue hampering many parking employers’ ability to not only retain their current talent, but to also attract and hire new talent. The major culprit I see hurting so many employers is: not being able to or not being willing to pay competitive market compensation, AKA not paying enough. And I’m talking about not paying your current employees enough, not your new ones, being the real issue.
For much of the last decade, wages have stagnated, when adjusted for inflation. Some attribute this to a lack of confidence. A lack of confidence both by employees unwilling to perform a job search for a higher salary if there were lucky enough to be employed during and just after the darkest days of the recession, and by employers who were slow to add new full-time employees to the workforce upon returned but uncertain economic prosperity.
But as I said previously, this has changed – today, people are leaving their jobs in droves, every month. And for the first time in history, there are more job openings in the United States than there are Americans actively looking for work.
Use Your Compensation Strategy as a Tool to Attract and Retain
Not every parking industry employer’s compensation rates have caught up with the impacts of external market forces. Increasingly I see the issue of internal pay equity versus market rate being a significant roadblock hiring managers face. This situation is all too familiar: “I can’t pay our new account executive $100k because the other account executives on the team only make $90k.”
While there are many good reasons for maintaining internal pay equity, using it as a reason to not pay market rate is not one of them. Doing so will not help you either acquire new talent OR retain your current talent. Under no circumstances am I suggesting you should not have an internal pay equity strategy, but it needs to take into account the current market compensation rates. Say, for example, if you were to have a current employee that was hired when market rates were significantly lower, and you value that employee, it would be in your best interest to re-evaluate their compensation to make sure it is competitive with market rates.
Otherwise, you are at serious risk to losing them. While some parking employers haven’t adjusted their compensation rates, some have – and those who have, are at a significant advantage. For now, it appears that hiring is expected to continue with 63 percent of US employers planning to hire full-time permanent workers, 58 percent planning to give out raises, and 45 percent planning to increase starting salaries all during the last five months of 2018. Pay increases will be 5 percent or more at 24 percent of companies.
Compensation Comes in Many Forms
Not every employer can afford to pay the rising market rates, but that doesn’t mean you can’t provide competitive compensation. When it comes to compensation, “compensating” someone doesn’t just come in the form of an annual or hourly salary or traditional incentive pay options such as commission, bonus, or stock. In fact, 68 percent of workers would consider additional benefits as an alternative to pay raises.
Today workers are more and more interested in other types of “compensation,” such as healthcare benefits, flexible work hours, extra paid time off, ability to work remotely, casual dress code, gym memberships, employee discounts, free lunches, and daycare. One little golden nugget that employers might want to take particular note of is that companies that support remote work have 25 percent lower employee turnover than companies that don’t. I also find that employees, on average, are willing to take lower pay to be able to work from home/remotely.
The ‘Market’ Always Wins
When it comes to being able to get the best talent, the best people for your organization, the only thing that matters is the market rate. In other words, how much another employer is willing to pay for the same candidate.
This article was originally published in the December 2018 issue of Parking Today.