Is higher pay the answer to the labour shortage?

I think every business person needs to read this article published recently in FURNITURE TODAY and reflect on your business and can or does it attract talent? I have pontificated frequently that as your hire Professionals, you need to provide them Professional Environment in order to provide Professional Results ... and ultimately it is your business branding ... but as I wander and hear ongoing complaints about the inability to attract and retain labour I see absolutely no effort to improve professional environments ... sad. Ultimately, it really is not Rocket Science, just common sense and decency !!


And now for the article ...



HIGH POINT — Many people might say the way to attract more people to work at your company is to raise your pay. But in 2021, is that enough to do the trick?

The CEO of North America’s largest furniture maker says no, it’s not enough.


“Higher pay isn’t going to fix. It’s only a component,” Ashley Furniture CEO Todd Wanek said in a webinar with the Home Furnishings Assn. last week. “Employees must love working at your company. We must reinvent the employee experience.

“40 million people are going to change jobs over the next 12 months,” he said. “And just so you can relate to that, there are only 100 million people in the workforce. That’s 40% of the workforce that’s going to change jobs.”


“When you compare to our levels pre-pandemic, we are currently up about 70% in turnover,” he said of Ashley. “That tells you our employees are not satisfied, they’re not satisfied working for us, they don’t feel engaged. We’re working on ways to connect with our employees in better ways. Certainly, you can jack up wages, but there’s got to be a way in an organization to change how employees feel about you.” Wanek thinks the way forward is to create emotional bonds with employees. That means talking to employees, coaching them and guiding them, he said.


“Look at all the opportunities we have at Ashley. I know you may not be happy loading a truck, and I understand that. But we have all these opportunities. Do you want to work in an office? We’ll teach you how to work in an office. Be a coach to employees. That’s the gold standard.


“We’ve got to connect with our people in a different way. It’s not the way it used to be, nor should it be,” he continued. “I don’t think it’s effective as it used to be. Even though our turnover was less, there were symptoms there showing we were doing a lot of things wrong. We’re early days on this process, but we’ve got to reinvent the employee experience at our company.”


One thing Wanek does at Ashley is assigned mentors to new employees for 90 days. Mentors will guide new workers, answering their questions and helping them feel welcome.

Several recent surveys seem to add weight to Wanek’s approach.


A survey from Limeade, a firm that pushes for employee well-being, asked 1,000 full-time workers who started a new job in 2021 why they left their previous job. Burnout, lack of flexibility and not feeling valued were top resignation drivers.


The survey also found:

  • Employees are departing out of desperation: 28% of employees left their jobs without another job lined up. These respondents were also 1.7x more likely to cite burnout as their reason for resigning.

  • The top reasons for employee departure include burnout (40%), organizational changes at the company (34%), as well as lack of flexibility, instances of discrimination and contributions, and ideas not being valued (all tied at 20%).

Another survey from Indeed polled employers and recruiters, finding that nearly 75% said they’re struggling to hire. Other findings include:

  • 85% of employers believe that the pandemic has changed opinions about what qualifies as a good job.

  • 86% of respondents believe employers need to take action now to reduce further turnover.

  • 76% say resignations are contagious. Once a few employees quit, others will follow.

  • 51% said their companies’ handling of the pandemic resulted in later resignations.

Let us know what you think. Is higher pay enough to alleviate the shortage? Or does the employee experience matter more? Contact me, Richard Kunst at rkunst@kunstsolutions.com with your comments or how perhaps we can help turn the tide of resignations.

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