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How to Attract Talent - Are Higher Pay Rates Necessary

The manufacturing industry is currently facing a shortage of skilled workers, and many companies are experiencing difficulty in finding enough candidates who have the necessary skills.

While this is good news for job seekers, it indicates that companies will compete fiercely for top talent.

Some employers have extended their benefits package, while others have loosened standards regarding common hiring practices such as background checks and drug tests.

However, with inflation running at its highest level in decades and the cost of living continuing to rise, employers might have to offer a higher base pay or risk losing the best candidates to their competitors.

How do pay rates affect recruitment?

An increase in pay rates can have a positive impact on both recruitment and retention. A higher base pay means employers can attract more qualified applicants while ensuring they keep their best employees.

In turn, this can help reduce turnover rates which are often costly for businesses and can negatively impact productivity.

When a company offers a competitive base pay, they gain an advantage in today's tight labor market. Based on the National Association of Manufacturers' 2022 Outlook Survey, here are some numbers to consider:

  • 79.5% of employers have had to raise prices to increase pay rates.
  • 81.3% of employers estimate wages will rise by at least 3% over the next 12 months.
  • 45.34% of manufacturing companies do not foresee slowing down hiring despite economic challenges.

Overall, it's evident that employers intend to raise pay rates as competition for applicants increases. However, that might not be the only reason a candidate chooses one company over another.

What other factors can drive candidates to work for a specific employer?

Although higher pay rates are a big part of the equation, several other factors can be equally important. Some of these include:

Company culture: A positive company culture is vital to many candidates. It's not just about the people you work with but also how they interact with each other.

Benefits: A good benefits package is a big selling point for candidates. It's important to provide good health insurance, PTO and other perks that will improve the quality of life of your employees.

Location: While many people may not consider this, location can be a significant factor when choosing an employer. If you are in a remote area, consider offering free transport shuttles to your employees at designated times.

Employer reputation: Your reputation can be a major factor in the hiring process. To maintain this, you must treat your employees fairly and listen to their feedback. If you have a good reputation, you may find that candidates will seek out your company instead of having to actively market it.

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