Hiring the Right Employees

New employment trends mean more, unique benefits

By Tracy Barbour

mid historically low unemployment rates, companies nationwide are struggling to attract and retain qualified employees. And the problem seems to be exacerbated in Alaska by a population smaller than many cities and a declining pool of viable workers.

Consequently, Alaska companies must be even more resourceful in their efforts to acquire and keep employees who are qualified—and a good fit for their business. Aside from offering a competitive salary and benefits as key inducements, employers can also use less obvious lures to appeal to workers’ broader desires—flexibility, professional development, bonuses, and other enticements can all help set a business apart. While incentives can’t resolve labor shortages, they can make employers more competitive in the current job seekers’ market.

The difficulty with finding and retaining suitable talent in Alaska is being fueled, in part, by the state’s shrinking labor pool. Alaska’s labor force peaked in November 2011 at 366,844 people, which was the number of Alaskans age sixteen or older who were employed or looking for a job, according to the Alaska Department of Workforce and Labor’s October 2019 Alaska Economic Trends: How Government in Alaska Compares. As of July 2019, the labor force shrunk to 351,410, meaning more than 15,400 people have dropped out of Alaska’s labor force since November 2011.

“At the same time, the unemployment rate decreased by more than a full percentage point, from 7.5 percent to 6.3 percent,” the October 2019 Economic Trends states. “Given the decrease in the size of the labor force, this suggests people who lost their jobs have been more likely to simply leave the labor force altogether than to look for new jobs in Alaska.”

Some of Alaska’s diminishing labor force can be attributed to age-related decreases. Baby boomers are retiring faster than younger people are entering the labor force to replace them. More specifically, Alaska has fewer sixteen-to-nineteen-year-olds, and they are less likely to participate in the labor force. The state also has fewer middle-aged workers between ages forty-five and fifty-four, and their participation in the workforce has also declined.

It’s not clear why younger age groups are working less. But one thing is apparent: the limited talent pool is making it challenging for many companies in Alaska to maintain adequate staffing levels.

Generally, the more specialization and expertise required for a position the more difficult it is to fill. There are two types of employees AKHIRE is always seeking for its clients: professional and skilled labor, including engineers, accountants, doctors, and attorneys, according to Todd Saunders, president and CEO of AKHIRE, a statewide, full-service staffing agency with locations in Juneau and Anchorage.

It’s extremely challenging for companies to find good accountants and bookkeepers. The accounting and bookkeeping field has taken a hit over the years, due to a declining interest in STEM (science, technology, engineering, and math) industries. Plus, there is normally high demand for professionals in these disciplines. “Every industry needs a bookkeeper and accountant,” Saunders says.

There are many employers in Alaska looking for quality people in the medical field, including physical therapists, doctors, and nurses. “Nursing is hard,” he says. “When recruiting for Bethel and Dillingham, you can go for months without receiving an applicant.”

There’s also a huge shortage of certified, bondable, and reliable truck drivers throughout the state. As a result, many of these positions go unfilled. “It’s not that people aren’t interested in the job,” Saunders says. “A lot of them are in the Lower 48 and don’t have the ability [financially] to move themselves up to Alaska. Plus, there are fewer people getting into the profession.”

The higher the skill and education required for a position, the more often AKHIRE recruits from Outside. This often requires relocating physicians, nurses, and accountants, as well as truck drivers and people who work in the mining and fishing industries.

On the flip side, some easier industries to recruit for are entry-level positions or those that require less specialized skills, such as retail and administration. However, hiring qualified applicants for positions in these fields can be tricky because they tend to pay less. Saunders says: “It’s not an industry-wide thing. They’re all hard to fill… I don’t know of an industry in Alaska that is easy to hire for.”

Companies can use a variety of tactics and enticements to tempt qualified employees. Salary and benefits are primary incentives. High-level professional employees are concerned about benefits packages, says Saunders, who recruits for all industries from medical and mining to food and tourism. But the question of benefits seldom comes up with the average worker in Alaska. “If employers do offer benefits, it’s healthcare, retirement, and paid time off,” he says. “It’s a more traditional benefits package that people are looking for.”

Some industries are putting a more creative spin on compensation. In tourism, for example, sometimes workers are offered an extra financial incentive for staying on the job. “In tourism, it’s complete the season, and we’ll give you a bonus,” Saunders says. “A lot of smart employers are doing that.”

Most employees focus on salary and the standard benefits, says Katie Lauwers, a consultant with BMG and Alaska Executive Search (AES). But research shows that apart from earning a livable wage, people look for opportunities to develop a healthy work atmosphere that appeals to the core values that are present in the work they do every day. “That’s one way companies can differentiate themselves from competitors,” she says.

This is especially true for millennials, who represent almost 30 percent of the workforce. “All of these incentives communicate respect for employees and facilitate trust as well,” Lauwers says.

Beyond this, continuing education and development are important because they signify an investment by an employer. They have also proven to retain employees and keep them motivated and engaged for a long time, Lauwers says. “Having an engaged team can reduce safety incidents, increase productivity, decrease absenteeism, and subsequently increase profitability,” she says.

When there are more positions than people available to fill them, job candidates have more leverage and freedom to choose employers. So, what can give one prospective employer an edge over another when trying to acquire and keep qualified employees? Apart from financial compensation, the tipping point is flexibility, development, and a good corporate culture, Lauwers says. “We know that if more than half of the workforce were offered a job with better culture and development, they would leave their current position… You can attract world-class talent when you have a clearly developed culture.”

Companies should focus on fostering positive reviews and feedback on Google and websites like Glass Door, which allows current and former employees to leave anonymous reviews. Employee feedback carries considerable weight with job applicants. “They are shopping for a good fit for themselves,” Lauwers says. “Quality applicants seek out employers who transparently communicate and act out their culture, values, and purpose.”

Saunders says that paying for relocation and housing assistance would be the tipping point in cases in which a company is willing to hire from the Lower 48. While hiring locals may be preferable, some companies are willing to pay thousands of dollars in relocation and housing costs to find the right employee. This is especially true with the recruitment of higher-level professionals, who are in strong demand.

Beyond money, relocation and housing assistance, healthcare, retirement, and paid time off, name recognition is a big deal in Alaska, Saunders says. Therefore, longevity and credibility within the community can be the deciding factor between two companies that are equally appealing in terms of their financial compensation and work environment. “If it’s a new company or a smaller company, employees are a little more leery and maybe want to go with someone who’s been around a little longer,” he says.

So, what do employees say attracts them to a company? Eighty percent of it is money and 20 percent is all the rest, according to Saunders. Employers should keep in mind that they get what they pay for. “The lower they want to put the wage, the lower number of applicants they will receive and the lower their skills sets will be,” Saunders explains. “If they want a really top-notch, skilled person, they had better be willing to pay.”

They should also be willing to beef up their benefits package, which is a practice more employers are engaging in according to research by the Society for Human Resource Management (SHRM).

The tight talent market is causing organizations nationwide to try to differentiate themselves through employee programs and services, based on SHRM’s 2018 Employee Benefits Survey. In fact, of the 34 percent of organizations that increased benefits offerings in the twelve months prior to the survey, 72 percent cited retention as a reason for doing so. And more than 50 percent of the respondents said they enhanced benefits to attract new talent (58 percent) and/or respond to employee feedback (54 percent).

And in its 2019 Employee Benefits Survey, SHRM assessed the prevalence of more than 250 benefits in key categories such as health, wellness, leave, flexibility, career, and retirement. Employers reported they were more likely to increase offerings in all benefits categories than to decrease offerings. Health-related benefits and wellness benefits saw the greatest increases across employers surveyed, with 20 percent of employers indicating they increased perks in those areas.

SHRM also noted that leave benefits showed modest increases in 2019. “Fifteen percent of organizations report increasing leave benefits in the previous twelve months,” the survey found. “Flexible working benefits have also increased moderately, with telecommuting and flexible scheduling both trending slightly upwards.”

Professional development benefits are another category where the current talent market could influence organizations to make bigger changes.

The paucity of qualified and well-suited workers is leading more companies to rely on staffing agencies. In particular, temporary hiring can be a good way for companies to not only find employees but also keep them. Hiring the wrong job candidate can be costly and going the temporary route can allow companies to “try out” employees before making a hiring commitment. Lauwers says: “When companies choose temporary hire, they can maintain the productivity they need, shorten the position vacancy, and streamline the onboarding with support from the staffing consultants. As soon as they find the employee that fits, it’s a pretty seamless process to get them on the payroll.”

Temporary hiring can be especially beneficial when a business needs to make seasonal adjustments around holidays and during the summer, for example. This can be ideal if companies don’t need a full-time hire for the whole year or want to prevent their full-time employees from experiencing burnout due to an increased workload. “Temp-to-hire allows flexibility to keep the team productive and lessen the load on great employees,” Lauwers says. “And you can provide ample time to find a fit that works while staying productive.”

For workers, temporary jobs are often appealing for their flexibility and employment stability, says Lauwers, who started at AES as a temp. Temporary work can allow workers to build their resume with a variety of experience while having AES as their employer of record. “When temporary employees look for a permanent job, their resume tells a story that they had a stable employer and a variety of experience,” she says.

She adds: “Historically, temporary employees were viewed as inconsistent and looking for a quick check. We have found that temporary employees reflect various age demographics while they have a variety of experiences, knowledge, and are interested in learning more.”

Employing a staffing agency to find qualified employees can be a good investment for companies, given the current job market and online recruiting environment. The shift to online recruiting means job candidates can apply for multiple jobs with the push of a button. And a low unemployment rate empowers high-demand applicants to “ghost” prospective employers by simply not showing up for interviews. “I think part of what’s attracting employers to use a staffing agency is the ghosting,” Saunders says. “It’s become much more complex to find good people in a market where the unemployment rate is as low as it is. Employees have become more nonchalant about looking for jobs.”