A Growing Challenge: Managing Talent

Savvy businesses are responding to a tight labor environment by reevaluating their recruitment, retention and compensation practices.

Recruitment and retention of sufficient workers presents a growing challenge for many U.S. businesses in manufacturing, construction and many other segments of the economy. Competition for workers continues to grow as the improving economy drives down unemployment and applies pressure on employers to increase wages. U.S. Bureau of Labor Statistics November employment statistics, for instance, showed employment continued to trend up in professional and business services, manufacturing and healthcare. While most businesses welcome the uptick in business opportunities, the pressure to increase wages threatens the ability of many of these businesses to take full advantage of these new opportunities. While welcoming the strengthened manufacturing economic performance, the National Association of Manufacturers says manufacturers continue to say that the inability to attract and retain a quality workforce is one of their top concerns. Employers in the healthcare and services industry increasingly are reporting similar challenges. With tightening immigration standards making it more difficult to close gaps with foreign labor, savvy businesses are taking the initiative to respond to this changing labor environment by reevaluating their recruitment, retention and compensation practices. In addition to looking to recruit new workers from the ranks of the under- and unemployed, many businesses increasingly are looking to recruit employed workers from other employers by offering sweeter compensation, work-life balance, promotion or other sweetened employment opportunities. Businesses competing for the same workers will want to review their existing employment and compensation packages to help promote their ability to recruit workers and to retain existing workers. See also: What Is the Business of Workers’ Comp?   In recognition that other businesses may target their best workers, businesses should shore up their compensation and retention practices and strengthen their noncompetition, trade-secret and other critical workplace protections to guard against disruptions from loss of key personnel. When conducting these activities, businesses should not rely on past legal experience. Federal and state law has evolved significantly regarding noncompetition, trade secret and other business intelligence safeguards. Businesses that have not done so in the past year should consider engaging experience counsel to review their existing policies and practices for possible witnesses and opportunities for enhanced strength. Businesses also may want to discuss opportunities for bonus or other golden handcuffs compensation packages to give key workers incentives to stay with the organization. Employers also should recognize that departing employees may take advantage of opportunities to air resentments. In the face of these risks, employers will want to ensure that their existing wage and hour, harassment, safety and other workforce policies and practices are currently compliant as well as be prepared to respond to any allegations of past misconduct. Employers should carefully conduct exit interviews and investigate any alleged misconduct or other negative feedback to mitigate potential risks and liabilities. Employers also should consult with experienced employment and employee benefits counsel about appropriate design, administration and documentation of these policies, practices,i arrangements and activities.

Cynthia Marcotte Stamer

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Cynthia Marcotte Stamer

Cynthia Marcotte Stamer is board-certified in labor and employment law by the Texas Board of Legal Specialization, recognized as a top healthcare, labor and employment and ERISA/employee benefits lawyer for her decades of experience.


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