The pandemic has turned many tables, including the one of the labor market. It is safe to say that the labor market has shifted from an employer-friendly market to an employee-friendly market. In this blog, we will give a short overview and status of the current labor market in the EU and US, and an overview of how companies are trying to attract and recruit talent.
Last year, many businesses experienced challenging times to find talent. As a result, companies were forced to find new ways to attract employees. After years of taking finding people for granted, the pandemic altered the job market, making people not granted but wanted. The current labor market is characterized by numerous available jobs, but a scarcity of people who are willing to take them.
How are companies attracting and recruiting talent?
In an effort to attract and recruit talent, many businesses have offered higher wages, sign-on bonuses, remote/hybrid/flexible working styles, and other additional benefits. Consequently, current employers of the “headhunted” employees had to fight back as well, resulting in salary increases, more promising career paths, and flexible working conditions. One of the latest trends to attract (young) people, is by paying a part of their salary or commission in Bitcoin/cryptocurrency.
Furthermore, experts say that employees want to play a more active role in their career development and that companies that help them achieve this goal may convince more of them to stay. Career development is not transparent in many companies and is a key area for improvement in HR.
A glance of US Labor Market | Q4 2021 – Q1 2022
The Great Resignation from July 2021, caused a lot of worries as over 4 million Americans quit their jobs (according to the U.S. Bureau of Labor Statistics). Unfortunately, this has not stopped, as another Great Resignation occurred in November 2021, in which 3.5 million Americans quit their jobs. The largest number in a single month.
These numbers are a reminder that the Great Resignation continues at a rapid pace and that companies remain desperate for talent. It is clear that many companies have put more effort into their retention efforts, but they have not found a way to stop the wave of resignations yet.
In the United States, the most used weapon to retain talent for employees is cash, raising wages. Experts continue to question this approach, saying that money alone will not prevent employees from looking elsewhere and will ultimately increase the problems (unbalanced wages in the future when the labor market is stable again).
A glance of EU Labor Market | Q4 2021 – Q1 2022
Europe is facing an unprecedented worker gap, the continent reporting record-breaking amounts of open vacancies. Several Western European countries, including Belgium, the Netherlands, Austria, and the United Kingdom, recorded the highest number of unfilled vacancies ever. To put this into more perspective, in the Netherlands, there are currently 116 vacancies for every 100 workers. As a result, European employers are fighting for talent.
Another element that has caused increased problems for some national labor markets is the attitude towards remote work. With many employers now accepting remote work - and with freedom of movement and work in the EU - talent is more likely to move to more attractive countries, and so are employers.
In Europe, the most used weapon to retain talent for employees is also cash. Luckily, it is seen that more and more employers are now focusing on other retention strategies as well, including improving (on)boarding processes, career path development, flexible working conditions, and leadership skills.
It is safe to say that the pandemic has had a significant impact on the labor market and it still continues. Not only has it had a direct impact on employees’ salaries and work-life balance, but it also caused businesses to rethink their recruitment and retention policies. As more and more people change jobs and industries to fit their work and lifestyle, many companies have already embraced hybrid work or plan to do so in the near future. In fact, 70% of companies have already changed their HR policies to some extent.
Do you want to know more about recruiting and managing employees in Europe?
In case you would like to have more information, do not hesitate to connect with Monique Ramondt-Sanders - VP of Human Resource Outsourcing at EuroDev. Interested in more information concerning our HR Outsourcing services? Please have a look at our HR Outsourcing page.
EuroDev, established in 1996 with offices in The Netherlands, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing, and Digital Marketing.