COVID-19's effect on wages and hiring requirements

An interview with Adecco leaders

5 minutes

April 10, 2020 Adecco

Team of warehouse workers wearing face masks at work

As the COVID-19 pandemic looks to reach its peak in the U.S., jobless claims are growing by the millions. According to some experts, the unemployment rate could ultimately top a staggering 32% due to the shutdown of non-essential services and there is fear that a recession could follow.

Despite this uncertain outlook, there is some encouraging news for essential businesses who are seeing a boom in demand. Consumer goods retailers, healthcare companies, and transportation and logistics enterprises are prime examples of businesses adapting their strategies to hire perm and temp workers faster and reward their increasingly important frontline employees.

In these competitive labor markets where talent is in high demand, what are companies doing to secure talent faster? For the answers, we turn to Adecco USA’s Senior Vice President of the Enterprise Division, Amy Glaser, and Head of Account Management for National Accounts, Sara Gordon.

Q: In the few years before the COVID-19 crisis, wages were rising, albeit slowly. What’s happening with wages now? Namely, hourly wages.

Amy: We’re seeing clients raise hourly pay as well as offer bonuses—both sign on and retention. We’re also seeing some clients offer “bench pay” for critical roles where there may have been a layoff, so that workers will hopefully return quickly.

Sara: Clients are using a number of different pay strategies to entice and retain workers. In addition to $2 to $5 per hour increases to base pay, we’re also seeing clients offer significant weekly bonuses for perfect attendance.

Q: How long do you think this pay trend will continue, or is it entirely up to the status of the virus and when it’s contained?

Amy: As recruitment becomes increasingly difficult with the in-home quarantine and social distancing period, I anticipate that wages will continue to rise, as candidates are becoming more and more scarce.

Q: These growing wages are somewhat geo- and industry-specific right now, correct?

Amy: Wage increases are seen predominantly in the blue-collar space, specifically in environments that host large numbers of employees, such as e-commerce, warehouse, logistics, grocery, subscription services, and even call centers.

Sara: This is a common trend. Some manufacturing, logistics, consumer goods, and life sciences companies are seeing a rise in demand and are competing for talent in major metro markets, especially in Ohio, Indiana, and Texas, to name a few.

Q: What about other industries or verticals and white-collar positions? Is it easy to find talent right now? Maybe for jobs in which people can work from home?

Amy: Easy is not a word that I would use to describe this market for any position. Even in work-from-home positions, there are challenges with logistics—training, issuing equipment, and more. Additionally, in some cases, workers are challenged with productivity in work-from-home assignments if they’re competing with children and partners for quiet space, Wi-Fi bandwidth, etc.

Sara: Not necessarily easy. Now, we are encouraging our clients to consider work-from-home options whenever possible. We know production and “floor” jobs can’t be done remotely; however, there are plenty of positions—such as call center and customer service reps and pharmacy techs—that can be transitioned to virtual settings.

Q: For large companies that can’t readily pay $2 more per hour, what does Adecco recommend?

Amy: In addition to looking at base pay, employers should consider total compensation. Additional perks like more paid time off, pay-for-performance bonuses, free lunches, etc., go a long way.

Sara: We recommend that companies consider all the “levers” at their disposal at the moment. If a company is unable to increase pay, it’s important to look at how easily and quickly people can start a job. Speed is key right now. Relaxing screening requirements can make same-day starts possible, getting more people in the door quickly; however, companies must vet these decisions very carefully and ensure the health and safety of their people remains their top priority.

Q: How does Adecco go about making pay recommendations to clients? How much research is involved?

Amy: We provide in-depth market information utilizing EMSI, the most advanced and real-time collection of labor market data available, as well as local competitive data gathered from our branches and vast network of 15+ million candidates.

Sara: In addition to pay rate intelligence, EMSI helps us make recommendations on alternative talent pools and work locations that clients may not have considered before.

Q: How else are you and your clients working to find talent fast and get them onboarded quickly? Earlier, you mentioned modifying screening requirements.

Amy: Matching hiring requirements to the job type and length of assignment for sure. We’re also partnering with state and local governments and employers to redeploy associates as quickly as possible, meaning if a worker loses their job, we place them in another job ASAP.

Sara: Yes, relaxing or eliminating hiring requirements for folks on short-term assignments typically gets people to work faster. For example, in counties with court shutdowns, we have been working very closely with our clients to amend contract language around background screenings and compliance.

Q: What are the most common hiring requirements to scale back on amid the pandemic?

Amy: Definitely the aforementioned background screening, along with drug screening, education, and references. We’re seeing more companies warm up to this idea.

Q: We’ve covered the current state of COVID-19’s effect on wages and hiring. What about the future, even though we don’t have a crystal ball? What’s Adecco doing to prepare?

Amy: We’re taking this opportunity to partner with our clients to determine what the world of work—their world of work—will look like in the future. This is also a great time for employers to assess what worked well during their business continuity plans. They can pinpoint what to make part of their new way of work, what they want to stop, and what they could refine to come out stronger in the long run.

Sara: Additionally, we’re continuing to focus on our flexibility and stability, so that we can continue to quickly adapt and consistently serve our clients at a high level. That means continuing to monitor the latest news, focusing on building our talent pools, and redeployment.

Q: Do you have any advice for companies, particularly around workforce management, as they navigate this chaotic time? You talked about assessing their business continuity plans, which is great, but what else?

Sara: Things are changing every day. It’s more important than ever to align yourself with trusted partners and have frequent formal and informal communication. Many of our clients are facing tough choices and look to us for guidance in times of uncertainty. Companies need to ensure that they are in a position to fully capitalize on the inevitable bounce back, and retaining great talent through this challenging time will enable them to do so!

If you have urgent staffing needs, contact our team.