HIRING CHALLENGES CONTINUE
Jeff Davis, TEAM Software, CALSAGA Network Partner
Every market seems to be haywire right now. Low interest rates, high building costs and excess disposable income has led to unprecedented demand and price increases in the housing market. The stock market has also been a rocket since hitting lows at the beginning of the pandemic. So, why should we expect anything less from the security labor market?
Let’s go ahead and address the 800-pound gorilla in the room: security firms are not getting enough applicants. While pundits debate the reasons for the drop in applicants, we can assume the answer is likely due to multiple factors affecting job seekers. Before we look at the possible causes, let’s take a look at recent trends in hiring and applicants.
Hiring Trends
Hiring has steadily grown week-by-week in 2021, with the most new hires coming in late June. Overall, hiring for April 2021 was up 62% year over year. Demand is strong for contract security services. As the world reopens, it makes sense that demand for security services would increase.
Applicant Volume
Applicant volume has not followed the same path as hiring. Where hiring has steadily built each week, applicant volume started high, dipped in the spring, and has somewhat leveled off to first quarter (2021) numbers. This presented a very challenging spring when trying to fill security positions, as well as in other industries, as new applicants were hard to find.
Key Factors
Steady hiring with lower and inconsistent applications makes for a difficult hiring environment. Recruiters are in a fight against the lingering effects of the pandemic, state and local policies, and outside industries to lure employees back. The most discussed (and politically polarizing) factors right now are unemployment benefits and specifically the additional $300 federal benefit. California is allowing the full benefit to be paid through September as reported by Zip Recruiter:
“The maximum unemployment benefit available to individuals in California is $750 a week, or about $19 per hour, through September 6, 2021. After that, the maximum weekly benefit for individuals is $450 a week, or about $11 per hour.”
Using Indeed’s salary estimator tool, the average hourly base pay for a security guard in California is $15.98. Based on the numbers alone, luring guards on unemployment back in the workforce is difficult. Many states are offering bonuses for returning to work, but to date, California has not joined the trend.
Other factors such as child care and fear of COVID-19 variant strains are also keeping some at home, but the biggest trend may be a shift in the workforce itself. A recent ZipRecruiter survey found 70% of job seekers who last worked in the leisure and hospitality industry say they’re now looking for work in a different industry. This isn’t specific to contract security, but if the hospitality industry is having this type of movement, it’s logical to hypothesize much of the security employee base may be looking to switch industries as well.
Moving Forward
One side effect to the labor market is classic supply and demand: rising job board advertising costs. Due to the lack of job seekers, employers have sponsored more job listings on job boards, leading to an all-out bidding war. Where organic (free) postings used to get visibility on the first page of a job board, they’re now buried on the third and fourth page behind the high volume of sponsored advertisements. With placements coming at a premium, companies have had to aggressively increase their job board spending budget simply to remain visible.
With rising labor costs, increased unbillable overtime and slimmer margins, how do we find employees to fill the demand? While there may not be a magic bullet, there are tactics you can implement.
- First — build a solid employee referral program and actively promote it. Your best future employees are referred by current employees.
- Second — focus on retention of current employees. The cost to acquire and train a new employee is significant and refocusing those funds into retention may be valuable.
- Third — look to other industries. When unemployment was high, hiring could be selective and managers could pick and choose to only interview candidates with experience. Now may be the time to explore potential hires with different backgrounds. I hear the workers from the leisure and hospitality industry may be looking for a change.
TEAM Software is dedicated to ensuring our software solutions meet the ever-changing needs of our customers. We’re also continually working to bring you relevant content to help you manage your business better by taking advantage of programs like WOTC. While we’re committed to keeping you informed, it’s important to do your own research, and consult your own legal and tax advisors when necessary, too. For more information on the WOTC tax credit, visit the United States Department of Labor WOTC page.
Jeff Davis was president of Kwantek, a recruiting and onboarding software provider acquired by TEAM Software, the leading provider of integrated financial, operations and workforce management software for cleaning and security contractors, in 2020. Since joining TEAM, Jeff is the VP of Strategic Growth North America, acting as a subject matter expert and thought leader for TEAM in the security and cleaning industries and assisting with global sales and marketing initiatives. For the last 20 years, Jeff has focused on technology, working in sales and marketing to executive leadership, with four years specializing in human resources technology. He has an MBA focusing on Information Systems from Tennessee Tech and a Bachelor’s degree in Marketing from the University of Louisville.