Labor Shortage Solutions: How to Solve Labor Shortage

While other industries like tech, eCommerce, and business services are beginning to lay off employees citing the economic crisis, many service-led companies are ramping up hiring efforts in response to employee churn.

There is still a worker shortage of skilled workers in today’s labor market who are willing to enter or return to employment. Economists expect the labor market to start to stabilize, likely in 2025 but possibly in 2024. In the meantime, employers should gather and review relevant information to adapt.

So, what are the reasons for low labor participation? How can the cleaning and security industries work around those challenges to keep contracts fully staffed? We’re detailing the top reasons—and opportunities to combat them.

What is the labor force participation rate?

The labor force participation rate is labor market data defined as the rate of individuals working or actively looking for a job, including unemployment rates.

Why is the labor force participation rate declining?

1. Lack of flexibility

The workforce — no matter the industry — is putting a higher value on company benefits like work-life balance as a result of the pandemic. Some common tactics companies are using to attract hires, like remote working options, just aren’t viable options when it comes to physical security or cleaning positions. That’s where thinking outside the box for indirect compensation can play a part.

2. Low wages and access to resources

Low-wage employees experience higher rates of churn and lower rates of loyalty and satisfaction than their higher-earning counterparts. As cleaning and security companies face hiring competition within the industry as well as other industries (warehouse, retail, etc.), it is becoming more difficult for wages alone to incentivize employees to stay with one company rather than pivot to a competitor. In this way, the balance of power has shifted from employers to employees.

3. Resistance to job requirements

As the balance of power has shifted from employers to employees, businesses are experiencing resistance to anything that could be viewed as added work. This might include the adoption of software in their daily work routine. In other cases, it may be that future or current workers see a disconnect between the job they were hired to do and what they thought was represented on a job listing.

Solutions to labor shortages cause

There isn’t a one-size-fits-all solution to attract more applicants to your open jobs. Still, becoming an employer of choice can help you stand out in the competitive hiring market. Here are three ways your company can combat labor challenges and become an employer of choice.

1. Flexible schedules and/or flexible work

The use of a mobile job board for self-scheduling activities is a way to improve potential employee engagement and employee retention, with the added bonus of reducing high-cost activities like overtime.

Self-scheduling works by:

• Enabling future and current employees to offer their shifts to others without needing to involve a scheduler or supervisor
• Other employees can then pick up the open extra work, keeping shifts filled and closing any gaps without needing to go back and forth with a manager

The ability to swap shifts depending on what works best for a worker at any given moment is a huge step in the right direction in terms of employee engagement. If an employee wants to pick up more work, they can also mark themselves as available. Schedulers can use this information when accommodating contract needs.

In the cleaning industry, this flexible scheduling is more difficult. Instead of flexible scheduling of shifts, see if there are opportunities to flexibly schedule work. Some clients will always require periodic cleaning frequencies, but others may benefit more from demand-based cleaning, where areas are only serviced when there is a need.

Use facility usage data — gathered from software features like mobile forms, checkpoints, audits, and more — to better understand foot traffic and facility usage, taking note of instances when services are needed

With a better understanding of needs and the resources you have available to meet those needs, you could potentially:

• Reduce cleaning hours and intervals
• Eliminate unnecessary cleaning rounds
• Reallocate resources to other critical areas
• Increase the quality of services
• Reducing employee burnout and fatigue
• Finding opportunities for flexible work schedules

2. Earned-wage access

TEAM Software by WorkWave recently reported the cleaning and security industries are racking wage growth above the rate of inflation in the US.

Although the European and Asia-Pacific regions have also experienced growth in earnings, the average wage is tracking below inflation rates, with the UK reporting an approximate 4% difference and Australian wages growing at less than half the pace of inflation.

If you haven’t already adjusted for inflation, you may want to determine if there is room for wage growth within your company. If you can afford to be on par with benchmarks, you may be able to attract interested applicants away from competitors.

If you can’t afford to adjust wages any higher, explore other benefits that can increase the frequency in which employees are paid without negatively affecting cash flow or complicating payroll processes.

Earned wage access provides a way for employees to receive payment for hours worked without having to wait for the next pay cycle to process. In service industries, one of the biggest barriers employees face in succeeding at a field job is the reliability of their transportation.

Sometimes, the gap between paychecks impacts a worker’s ability to afford transit, let alone living expenses. This can make a big difference in employee financial wellness even during times of economic stability.

“Initiatives like this really center around improving the welfare of our employees. It gives us a way to provide a real benefit to our employees—employees whose needs may outpace a regular payroll cycle.” Matthew Wilson, GardaWorld

3. Be transparent and communicative about job requirements

To lessen the risk of new hire churn, make it clear what will be expected of them from the job from the very first posted job listing. Reiterate requirements throughout the hiring process, including the necessity of using software to start and end work and complete every task in between.

While there may be resistance to change, including the adoption of workforce management software and apps in the workplace, it’s important to remember the long-term benefits such initiatives have on your business as a whole.

In the cleaning and security industries, software is intended to increase efficiencies and protect profit margins while reducing risk and redundancies that often occur using pen-and-paper or manual processes. Involve stakeholders from all across your business—including those in the field—in the implementation of any new promises. This helps create buy-in at every organizational level and develops advocates for its correct usage.

4. Foster a Positive Workplace Culture

Creating an inviting and supportive work environment can significantly reduce turnover rates and attract new talent. Employees who feel valued and respected are more likely to stay with an organization long-term. Encouraging open communication, recognizing achievements, and providing opportunities for professional development can enhance job satisfaction.

Consider implementing regular feedback sessions where employees can voice their opinions about workplace practices and express any concerns they may have. This not only fosters a sense of belonging but also empowers employees to take ownership of their roles within the company and inspires employee referrals.

5. Offer competitive compensation and benefits

To attract and retain top talent, it’s essential to offer competitive salaries and a comprehensive benefits package. Research industry standards for pay rates in your sector to ensure that your compensation aligns with or exceeds what other employers are offering. Additionally, consider providing bonuses, profit-sharing options, or performance incentives that reward employees for their contributions, especially when it comes to hourly workers.

Beyond salary, benefits like health insurance, retirement plans, paid time off, and flexible working arrangements can significantly enhance your overall compensation package. Employees are increasingly looking for jobs that not only pay well but also offer a supportive benefits structure that caters to their personal and professional needs.

6. Invest in Employee Training and Development

Providing ongoing training and development opportunities is crucial for employee engagement and retention. When employees see that their employer is invested in their professional growth, they are more likely to feel motivated and committed to the organization and won’t be intimidated by skills gaps. Consider offering development programs like workshops, mentorship programs, or access to online courses that align with both the company’s goals and the employee’s career aspirations.

Encouraging a company culture of continuous learning not only improves the skills and knowledge of your workforce but also helps in attracting new talent who value professional development and career growth. Employees are more likely to stay with an organization that prioritizes their growth through training programs, which can ultimately reduce turnover rates and mitigate labor shortages.

Finally, make any new process as easy for your employees as possible. Mobile apps should be intuitive and user-friendly. Consolidate as much as you can when possible to reduce the amount of logins and reconciliations required. If your software requires an audit procedure, for example, make sure to select one that operates from simple questions that are easy to answer from the field but takes into account set targeted levels of quality to automatically calculate inspection results. That way, you’re simplifying the work needed on your field employee while still gathering all necessary information for advanced proof of service and quality assurance.

Start Using Hire by WorkWave

One popular ATS software that employers can start using to streamline their hiring process is Hire by WorkWave. This innovative solution offers a range of features designed to help companies attract, manage, and hire top talent efficiently.

With Hire by WorkWave, employers can easily post job openings on various job boards, including Indeed, to reach a wider audience of potential applicants. The platform also allows recruiters to track applications, review work histories and resumes, screen candidates, and run background checks all in one centralized location.

In addition, Hire by WorkWave offers customizable workflows and automation tools to help streamline the hiring process and reduce manual tasks. This can save recruiters time and effort, allowing them to focus on finding the best potential candidates for their open positions.

Dive into more labor market data

The labor market is always changing. TEAM Software by WorkWave is dedicated to helping keep you informed of the latest trends—and how to make them work for you.

Learn more in our recent data report: 2024 Labor Trends and Forecasts for the Cleaning and Security Industries.

Closing Thoughts

In today’s competitive job market, addressing labor shortages requires a multifaceted approach that focuses on attracting and retaining talent. By implementing strategies such as offering competitive salaries and comprehensive benefits packages, investing in employee training and development, and utilizing efficient hiring tools like Hire by WorkWave, companies can enhance their appeal to prospective employees.