Pandemic Changes How Firms Hire and Retain Workers

The pandemic should be an opportunity for companies to rethink how they recruit and retain workers, U.S. Labor Secretary Martin Walsh said.

When Covid-19 first sent workers home in early 2020, it gave people time to reflect on what they wanted to do and how they wanted their jobs to fit into their lives, Mr. Walsh said at the World Economic Forum’s annual event in the Swiss mountains.

Now, with the labor market historically tight, employers will need to find the best ways to draw workers.

“Companies, you have an opportunity to take advantage of the quit rate, if you will, to get them to your company, to recruit them,” he said, referring to the elevated number of times workers quit their jobs in the tight U.S. labor market.

During the pandemic, the share of people quitting their jobs rose to the highest level in records going back to 2000. The rate of new hires also rose to records, a sign that people were switching jobs in high numbers.

In response, firms have rapidly increased pay to draw and keep workers. Year-over-year wage growth exceeded 5% a month for most of 2022 before dipping slightly to 4.6% in December, according to the Labor Department. Despite the robust gains, wages haven’t kept pace with high inflation.

To be successful in today’s hiring market, employers also need to look at benefits and their workplace culture, Mr. Walsh said.

“Companies are starting to look at paid sick leave, they’re starting to look at paid time off, they’re looking at how we do a hybrid model, how does it work?” he said.