How to Become the Local Employer of Choice

About two-thirds of companies do no planning for workforce issues at all.

Quickly rising and about to strike, the tidal wave of demographic pressure is threatening the health of American business. Employers are already passing up opportunities to expand because they do not have and cannot find qualified workers. Many employers are failing to become “employers of choice.”

• In the United States, someone turns 60 every 10 seconds. Yet, few Americans have sufficient retirement savings, so they must stay in the workforce longer, although they may have difficulty keeping pace with job demands.
• Up to 75 percent of 18- to 24-year-olds are not eligible for the military due to obesity, illiteracy or substance abuse. Yet, jobs that once were available to workers with limited skills now require competency in reading, math, communication and computers.
• The current generation is the first to be less healthy than its parents with epidemic incidents of obesity and rising rates of adult onset diabetes in children. Yet, employers are hard-pressed to meet costs of health insurance. While wellness programs are as accepted as mom and apple pie, employers struggle with creating incentives to encourage participation.

Nevertheless, Wharton’s Director of Human Resources Peter Cappelli points out that about two-thirds of companies do no planning for workforce issues at all. The confluence of those challenges means there is a decreasing number of available, fit, educated, trained employees with a strong work ethic. Knowing how to best attract, manage and retain employees has always been key to sustaining growth and productivity, and it is the only way to grow profitably in times of scarcity.

A good example is automobile technicians. The changing nature of the job, need for technical skills and negative stigma of that career have resulted in a shortage of about 35,000 to 60,000 technicians per year, according to Richard White of the Automotive Aftermarket Industry Association. The situation will worsen in the next 10 years, when more than half of the top technicians are expected to retire.

White believes the solution is local and not national. According to “The Growing Scarcity of Qualified Auto Technicians” on search-autoparts.com, “Quality repair shops are involved with schools in their community and are willing to mentor young people. They pay their employees fairly and run a clean, professional business. They treat their employees with respect, and in turn, their employees have a positive self-image that is portrayed to colleagues and customers.”

Choice Characteristics

Employers need to ask whether they are the employers of choice in their area that everyone wants to work for. Do top employees regularly refer qualified candidates for hire? With rigorous hiring standards and high performance expectations, can employers select and retain the best employees? Which employees do companies want to attract and retain, and how will they develop them?

While the parameters defining “employer of choice” will vary by industry and location, there are commonalities. Attractive salaries and wages, job security, advancement opportunities, rich benefits, flexibility, desirable perks, managers who treat employees well, and ethical practices are all on the list.

Each year, Fortune lists the best companies to work for in America, based on management’s credibility, job satisfaction, respect, fairness, camaraderie, demographic makeup, pay and benefit programs, management philosophy, internal communications, opportunities, compensation practices, diversity efforts, etc. Taking steps with employee surveys, retention and exit interviews to understand what motivates existing and potential employees are key.

For two consecutive years, Google topped the list. Financial security and flexibility were key attractions, but the “opportunity to get things done” also was at the top of the list.

Companies might think they can’t afford to be among that group, but they need to structure their budgets, priorities and cultures appropriately. Companies cannot afford the alternative; only employers of choice — that are selective and attract, retain and motivate the best employees — will grow profitably.

An engaged employee has a vested interest in an employer’s success. While younger employees often are the focus of career development opportunities, extending career paths to all employees enhances retention and strengthens productivity. For example, older auto technicians may move on to service writing or become mentors.

Team Environment

Creating a motivating environment that people want to be part of will drive performance. The turnaround of the Boston Celtics from the worst team to NBA Champions offers a valuable lesson. The league’s top players sacrificed personal glory and focused on a singular goal — winning the championship — to speed the team’s learning curve. Savvy veterans contributed meaningful minutes and mentored young players. The Celtics leadership was agile, attracting necessary talent, fostering chemistry among young and veteran players, and focusing on a common goal.

Employers need to be agile and responsive to maintain a healthy, trained and productive workforce. Constantly threatened with a double-edged sword — younger employees entering the workforce are less healthy and older employees are often working beyond their physical abilities — employers need a strategy. The best solution is to be the employer of choice. With ample job applicants and rigorous hiring practices, employers can hire the best and secure a lasting competitive advantage.