The Cayuga Economic Development Agency works with private businesses in Cayuga County to help them start up and grow. One of the barriers to growth is finding the right people. Recently, we’ve been hearing two things; “We are actively hiring” and, “No one wants to work.” We’re writing to let employers know that people still want, and need, good jobs. However, with the county’s unemployment rate at an unprecedented low of 3.1% in July, applicants are in a position to be selective. Businesses need a renewed focus on talent attraction and retention.
Succeeding in a competitive environment is about creating more value than the competition. Generally, businesses focus on delivering more value to the customer but, with the present labor environment, there needs to be renewed focus on how this applies to employees as well. Firms need to consider how to make themselves more attractive to prospective employees. The Federal Reserve’s long-run unemployment target is 5%. At that level, one in 20 workers is actively seeking a new job; today, that number is one in 33. What does this mean? The labor market is more than 50% tighter than it should be. On a related note, the Fed will continue working to increase the unemployment rate by keeping interest rates high until inflation falls below 2%.
This story is deeper than just the unemployment rate. Cayuga County’s workforce declined by 1,000 people (36,100 to 35,100) between June 2020 and July 2023. This is a result of migration out of New York, losses suffered in the pandemic and retirements. With fewer hands but ample opportunity, businesses face a unique challenge: competing for employees. Underscoring this, companies are operating at full capacity and would expand if they had more employees. Yet many of these same firms often offer suboptimal working conditions and pay at or near minimum wage.
We’ll mostly leave out pay, except for a brief note. Cumulative inflation between February 2020 (the month before COVID-19) and July 2023 stands at 18.1%. A wage of $15 per hour in February 2020 is equivalent to a $17.73 per hour wage today. Additionally, for companies that offer health insurance, can their employees afford to actually use it? After rent, gas, food, utilities — can they cover their deductible and out-of-pocket maximum? As circumstances worsen for low-income earners, deliberation about pay and benefits is a critical decision for those seeking more employees.
Businesses may also want to revisit their hiring requirements. Perhaps that position can be trained in-house and doesn’t need several years of experience. Consider reducing the number of interview rounds and resume requirements, and offering a simpler application process. Applicants can get a start date at a major distribution center in Liverpool in five minutes for a job that pays $17.60 an hour with a four-day work week, a 4% 401(k) match, insurance on day one, and a $110 shoe allowance. Does the job really need three-plus interviews and a “perfect fit”? Are you forcing job seekers to rewrite their resume and provide references before an interview? Cayuga Works is our local source for accessing state and federal dollars that pay for employee training and upskilling. There are significant subsidies available to businesses that want to invest in their people.
We noted four-day work weeks above. Accommodating non-traditional hours might necessitate operational shifts and incurred costs, but consider the value of giving employees an extra day off every week. If your business operates with staff on a variable schedule, consider publishing the schedule on time. Child care is also a very real challenge in Cayuga County and affects the ability of parents to work. Frankly, this is an issue that CEDA hopes to help address in the future given its pervasive impact on job creation and quality of life throughout the county. In the meantime, consider collaborating with other businesses to explore shared solutions. This includes investing in a service to offer to employees. We understand this is a big ask full of costs and liabilities, but if the alternative is having no one to work …making life easier for employees who are also parents is a competitive advantage.
CEDA is Cayuga County’s one-stop economic development resource. Our mission is to further a sustainable quality of life via job retention, expansion and attraction. If unemployment was at 7%, we’d be writing a different article. Instead, with unemployment at a historic low of 3%, we’re writing to encourage firms to adapt their talent attraction and retention strategies in order to be more competitive. As always, our services are free and confidential. We’re here to help Cayuga County businesses achieve their goals and create a resilient economy for the future. There are many resources available, and we encourage you to contact a CEDA specialist to learn more.
