Seasonal Hiring Best Practices: Tackling the 2021 Talent Shortage

A small business owner interviews a potential employee

Hiring is up, but overall employment numbers remain down. Seasonal staffing encapsulates the issue at scale: Workers are no longer willing to settle for a position that doesn't measure up to their standards. Informed by a year of uncertainty, staff are looking for jobs that do more than simply pay the bills.

The Great Resignation is in full swing. Having faced a year of rapidly changing pandemic conditions and restrictions around where, how and when they work, many talented staff are no longer prioritizing paychecks. Instead, they're leaving jobs where they don't feel engaged and pursuing other opportunities.

This workforce shift also has implications for seasonal hiring — how can businesses bridge the talent gap and ensure they're fully staffed as seasonal volumes ramp up? Here's what you need to know.

Coming up short

In April 2020, the U.S. market saw 20,236,000 jobs lost according to the ADP National Employment report history. Nela Richardson, Chief Economist for ADP, puts this in perspective: "That's nearly all the jobs that were created over the previous 10 years, and who was the driver of two-thirds of the net job creation over that 10-year period? Small businesses."

As some semblance of market normalcy begins to return, the same small and midsize businesses (SMBs) are now looking to bolster employee numbers and get back on track. But this is no easy task. Recent ADP research makes it clear that the biggest issue currently faced by SMBs is finding qualified employees. Precisely 36% of organizations surveyed cited this as their top concern — supply chain disruption was second at 21%. And the issues don't stop there, as almost half of SMBs with 5 to 49 employees say retaining staff is also a challenge.

While no industry is immune to these issues, The Washington Post highlights specific channels with substantially more job openings than hires. These include manufacturing, transportation, entertainment, professional services and retail. Restaurants are also struggling — as CNN notes, job postings that once drew 60 to 80 applicants to work at popular locations are now coming up empty.

The result is an SMB market looking to get back on its feet that's hampered by a lack of interest.

Seasonal struggles

As Richardson notes, SMBs were responsible for 45% of new job growth over the last quarter. Although that's good news for economic rebounds, she points out that the U.S. market is still five million jobs short of pre-pandemic levels.

While part of the problem stems from uncertainty around exactly what safe returns to work look like for different industries, a recent NPR article makes it clear that something more fundamental is going on. "We have changed," says Tsedal Neeley, a professor at Harvard Business School. "Work has changed. The way we think about time and space has changed."

Staff are more willing than ever to wait for jobs that meet both personal and professional goals instead of taking the first opportunity that comes their way. Seasonal hiring pushes these issues into the spotlight, as increased customer volumes combined with continuing COVID-19 regulations can create a perfect storm of stress for staff.

For SMBs, seasonal hiring processes must both reflect current conditions and address emerging challenges. Here are four best practices to help bridge the gap.

1. Consider offering additional benefits

One way for businesses to attract more seasonal employees is boosting available benefits. Compensation often comes first — ADP's Quarterly Market Outlook found that 37% of SMBs with 1 to 49 employees plan to raise wages in the next six months.

But in a tight job market, pay alone may not be enough to capture staff interest. To stand out from the crowd, SMBs may need to consider other options. For example, some businesses are now offering tuition assistance programs, while others are providing health coverage for short-term staff.

While these extra benefits mean additional expenses for SMBs, they're likely more cost-effective than having no seasonal staff.

2. Increase flexibility

Flexibility can be a critical consideration for staff weighing seasonal work. While some jobs, such as working in warehouses or serving in restaurants, require in-person attendance, others such as retail or professional services may offer ways to support remote or hybrid work.

As Digiday notes, athletic wear brand Vuori has started hiring what they call "omni associates" who split their work between retail floors and customer service. This presents the opportunity to have staff at home on some days and in the office on others for improved work/life balance.

3. Cultivate an outstanding culture

Business culture matters when it comes to hiring and keeping both long-term and seasonal employees. According to recent Gallup data, even promises of a 20% pay raise often aren't enough to capture the attention of engaged employees, while it takes next to nothing for the competition to poach workers who aren't happy.

While the nature of many seasonal jobs sees staff dealing with large customer volumes for days on end, there are ways to improve culture that can help boost overall employee satisfaction.

First is management support. As the NPR article points out, some key drivers of staff attrition were challenges around implementing and enforcing COVID-19 restrictions. While these rules are often onerous for both staff and customers, backing from management at every stage of the process can bolster employees' confidence in the notion that they'll be supported if issues arise.

SMB managers and owners should also consider changing tactics when it comes to staffing coverage during extremely busy periods, such as Black Friday or Cyber Monday. If staff feel pressured to work instead of valued for their efforts, they won't stay for long.

4. Capture interest early

When it comes to seasonal hiring, earlier is better. The U.S. arm of German Supermarket chain Aldi announced plans to hire 20,000 seasonal workers this year and started hiring in September, while technology giant Apple posted its seasonal positions back in July. The same approach benefits SMBs.

As the holidays approach, tight labor markets will get even tighter, leaving businesses with a choice between reducing operational hours and paying significant amounts of overtime. Put simply: It's never too early to start thinking about seasonal staffing.

Getting back on track

Hiring is up, but overall employment numbers remain down. SMBs are driving this economic resurgence, but many are facing challenges around finding and hiring talented employees.

Seasonal staffing encapsulates the issue at scale: Workers are no longer willing to settle for a position that doesn't measure up to their standards. Informed by a year of uncertainty, staff are looking for jobs that do more than simply pay the bills.

For SMBs, addressing this issue requires a shift in seasonal hiring practices to prioritize employee benefits, work flexibility, management support and early interest in recruiting top-tier talent.

For more information, visit the small business resources page of the ADP Research Institute®.