Employers add perks such as retirement bonuses, tuition fees, to attract workers
Customers at the Martha’s Restaurant Bar in Philadelphia, which requires proof of customer vaccination, August 7, 2021.
Hannah Beier | Reuters
Companies are getting creative in their efforts to attract and retain workers amid a labor shortage caused by the coronavirus pandemic.
Ray Bales, president of a Seniors Helping Seniors franchise in Knoxville, Tennessee, has implemented a special bonus program to encourage caregivers to re-enter the workforce. In addition to raising hourly wages and offering a signing bonus of $ 150, the company is donating $ 50 to a local charity supporting Alzheimer’s disease research on behalf of the employee.
“It’s a whole new way caregivers can give,” Bales said.
During the pandemic, the company – which pairs elderly customers in need of home and companionship care with elderly people still interested in working – had to lay off its entire workforce. But now it’s busier than ever. After adding the signing bonus and donation, Bales received 12 applications in a week and hired two new caregivers.
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However, it must fill 30 to 40 jobs. “I hope that many of these [applications] we’ll go ahead and get back to work, “he said.” We have a long list of people waiting for help and that’s the thing that breaks my heart. “
The coronavirus pandemic has left millions unemployed over the past year and has brought additional benefits from states and the federal government for people out of work, including extra money every week. Now, as hires hit 6.7 million in June, job postings are also higher than ever – job postings were 10.1 million in June, according to the Labor Department.
This can exceed the number of people who are actively looking for work. The July jobs report showed that there are some 8.7 million unemployed people looking for work.
Economists point out a few reasons why some companies – and especially those that offer lower wages and require face-to-face interaction – may struggle to find workers. First, the threat of disease is still present given the rise of the delta variant. Some workers, mostly mothers, may be unable to find daycare and therefore choose to stay at home.
Additionally, some say the extra unemployment benefits deter people from returning to work, although many states have cut the extra money and the federal program ends in September.
This has resulted in an environment where workers have more power than before the pandemic. Businesses are getting more creative with benefits that benefit employees. Job postings on Indeed, an employment website, show that hiring incentives doubled from July 2020 to July 2021, and searches for jobs offering incentives increased 134%.
“The big picture is that employers right now are really trying to figure out how to attract workers because there are still challenges,” said AnnElizabeth Konkel, economist at Indeed.
Give workers 401 (k) s
Many give workers a financial boost. Some restaurants are now offering 401 (k) accounts or profit sharing to their employees, allowing workers to save for retirement and ensure they stick around.
Adam Bergman, partner of IRA Financial Group, said that before this year he may have seen a restaurant or two looking to offer retirement plans. Now the group receives several phone calls each week from restaurants looking to put plans in place.
“They are trying to encourage people to stay,” he said, adding that many clients they have recently signed on to structural plans so that employees working on the last day of the year automatically get a 5% match.
Peter Vauthy, owner and executive chef of RED South Beach, a steakhouse in Miami Beach, Florida, has for years offered 401 (k) plans and health insurance to his employees, including waiters and kitchen staff.
It took owner and executive chef Peter Vauthy of RED South Beach restaurant in Miami Beach, Fla., Seven months to fully staff after it reopened, even with retirement benefits and other perks.
“A 401 (k) makes perfect sense,” he said. “It’s a minimal cost to me, we play a game up to a certain percentage, we have basically 90% of the staff and they loved it.”
Although his restaurant was closed during the pandemic, around 90% of the former employees have returned, he said. Still, he struggled to find new workers to fill in the gaps.
“It was impossible” to hire, he said, adding that it had taken him seven months to reach full strength after it reopened in January. He increased wages at all levels just to attract people. He also plans to increase the 401 (k) match and implement a profit-sharing plan, he said.
Even large companies now offer creative advantages. Target and Walmart recently announced tuition reimbursement programs to help employees cover the cost of higher education. Other employers such as Best Buy, Amazon, and Facebook provide care benefits for the elderly and children.
Salaries are also rising, and signing bonuses are becoming more prevalent in restaurants and retail. Papa John’s, McDonald’s and Chipotle are among the restaurants that raise wages and offer signing bonuses.
Of course, it’s still too early to see what will stay in the workforce and what will bring people back to work, according to Kathryn A. Edwards, an economist at the RAND Corporation. There is still room for improvement for workers, especially those in lower paying jobs.
“A nominal pay rise or a hiring bonus is not the same as a stable and secure job,” she said, adding that other benefits such as paid sick leave would give to people even more security to return to work.
And, at the end of the day, the biggest unknown impacting the labor market is still at stake, she said.
“What is true now was true in March of last year,” she said. “The economy will not recover until the pandemic is contained.”
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Disclosure: NBCUniversal and Comcast Ventures are investors in Tassels.