Job Ads, Uncool Benefits and More - My Chat with James Hornick
“Job ads are a stupid way to measure job openings,” so says James Hornick of Hirewell, a recruiting firm out of Chicago, who I spoke with a few weeks ago. We also chatted about good and not-so-good benefits, as well as his biggest recruiting pet peeve.
Job Ads ≠ Job Openings
“If companies are desperate for workers, why can nobody find a job?” This was the question posed by an influencer recently, and James and I discussed one of the issues he brought up - namely, why do companies leave up job postings while they’re laying off people? According to James, there are two main reasons:
If a company can potentially hire in multiple markets, they’re going to advertise in those markets;
If you’ve paid for job postings, you’re going to use them.
It’s not because HR departments are data mining and want to get an influx of applicant data to analyze. They’ve got enough work to do trying to retain employees.
The Job Openings and Labor Turnover Survey (JOLTS) tells us how many job openings there are each month, how many workers were hired, how many quit their jobs, how many were laid off, and how many experienced other separations (which includes worker deaths). According to James, job ads are not reflective of how many true jobs there are for a variety of reasons. For example, a company may post an ad for a single position in several different markets, or if they need 50 employees in one market they’re just going to post one ad.
However, with JOLTS, while the individual numbers should be taken with a grain of salt, a change in the numbers may still be meaningful. For example, if the number of job ads increases by a million, clearly there is more hiring going on.
Benefits That Are Actually Cool
What kinds of benefits are helping to move the needle for companies that are hiring? Well, there’s the yearly bonus, although many firms require employees to stay on through December 31 to be eligible, and don’t pay out until March or April. It’s like a carrot that’s always dangling in front of the employee.
And then there are sign-on bonuses. What’s interesting, says James, is that we’re in the age of haves and have-nots; some companies can afford to pay sign-on bonuses and some can’t. Generally, those who are giving out bonuses are in recession-proof industries, like consumer packaged goods, manufacturing, and financial services.
Supposedly Cool Benefits That Aren’t So Cool
Unlimited vacation and foosball tables in the break room? Yawn. The real drivers behind retention are good base pay, bonuses, and/or equity. A great environment and the possibility of remote work can also help with retention. A company that doesn’t want to do any of these things, however, is definitely going to have problems with retaining talented workers.
What if a company doesn’t want to offer equity to employees (e.g. they may be privately held) - what can they offer instead? Non-qualified deferred compensation (NQDC) plans are a good option that offer an “equity-like” experience. These are non-ERISA plans, so they are not forced to play by the same rules as a 401(k), and they are a great way to retain executives in a more meaningful way than just your typical profit-sharing plan. Any type of benefit that is well-defined and structured, with clear metrics, can be used to bring in and keep employees, says James.
James’s Biggest Pet Peeve
What are companies doing wrong when it comes to hiring? According to James, the main problem is a lack of organization and urgency, as well as not providing job-seekers a good reason to join their company. A lot of organizations that aren’t great at hiring think the key is getting a lot of applicants to respond to job postings, and they wind up not following up and ghosting applicants.
Companies need to provide a better candidate experience and convince people to come on board; otherwise, they risk losing talented people to firms that have their act together. You can be a great place to work, but if your hiring process is a trainwreck, it will come back to haunt you, especially in a tight labor market.
If you need help with your hiring process, you can email James at james@hirewell.com, and you can also find him on LinkedIn.
And if you need help with your NQDC plan or other benefits that will help attract top talent, reach out to us!