What Oahu’s Low Unemployment Rate Means for Hawaii's Employers
Oahu recently set the country's record for lowest unemployment rate at 1.9%! Labor costs are the biggest expense for all businesses but with Hawaii’s unemployment rate under 2%, labor costs are at an all-time high as employers compete to attract qualified workers by increasing pay and improving benefits. Many small to medium sized businesses can benefit from partnering with a Professional Employer Organization (PEO), which can help reduce labor costs without hurting their businesses recruiting efforts.
What does Oahu’s low unemployment rate mean for Hawaii's employers?
The unemployment rate represents the percentage of workers who are not currently employed and are actively looking for a job. When the unemployment rate is low it is considered a “buyer’s market” which means that people seeking work have the advantage while employers face stiff competition to hire the best employees.
How to retain and attract good employees in Hawaii’s current labor market
In order to attract and retain good employees in this labor market without putting labor costs through the roof, companies need to get creative. Many successful companies realize that potential employees are looking for more than just good pay and they understand that not all employees are the same. Our post about managing millennials offers useful tips for younger employees.
Creative ways that successful businesses attract employees in a competitive labor market:
- Work from home flexibility.
- Flexibility on hours including four, ten-hour shifts and starting early to finish early.
- Creating and communicating a unique employer brand that will be appealing to the type of candidates the company needs. Many companies are presenting this brand on social media; encouraging potential candidates to visit a site that explains the company’s mission, values, and culture.
- Using social media fans to build a talent network that can be used to recruit.
- Optimizing the recruitment process for mobile devices. This means making websites mobile friendly and using job-search apps that make an interactive experience for job-seekers.
- Working on a positive recruitment experience including a human touch to confirm that an application has been received, explaining the interview process and letting candidates know whether or not they received the position.
How a PEO can help cut labor costs without hurting your business
Labor costs are always the biggest business expense but this is especially true in periods of low-unemployment. Businesses will naturally look for ways to reduce labor costs without hurting productivity or the talent of their labor force. The good news is that some simple changes to policy and approach with employees can help companies reach these goals.
Companies can save money by hiring the right employees to start with and treating them well. This is because the costs of high employee turnover mean lost productivity and recruiting expenses. There are many ways to reduce employee turnover without spending a lot of money.
- Talking to employees about their job satisfaction and asking them what things would make them loyal to the company.
- Providing basic courtesies like paid breaks and giving employees room to do their jobs without micro-managing.
- Providing generous training and mentoring opportunities.
PEOs can help companies reduce labor costs without hurting their chances of hiring and retaining good employees by:
- Automating HR processes through an employee portal.
- Digitizing employee documents like employee handbooks.
- Offering more generous health benefits at the same price as they could offer by buying a plan on their own.
Partnering with Makai HR
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Partnering with Makai HR can reduce your labor costs while improving your employees work benefits; two musts in Hawaii’s current labor market.
Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone.
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!