A growing number of companies are hiring more workers than they need, in part by offering lower salaries and perks to attract them, according to a report by the consulting firm McKinsey & Co. The firms surveyed by McKinsey are seeing an increase in hiring and retention as companies seek to address rising labor shortages and keep pace with a growing global workforce.
While the overall hiring rate has been rising in recent years, the McKinsey survey of more than 100 companies showed an increase of 1.9 percentage points for the first quarter of this year compared to the same period in 2016, the highest since the firm began tracking hiring in 2005.
“There is a lot of churn in the labor market,” said Paul Rochin, an executive vice president at McKinsey.
“Some companies may need to hire workers they otherwise wouldn’t.”
For example, the number of people working in sales and marketing positions has been increasing at companies that have a larger market share, such as large technology companies that are looking to hire as many as 100,000 workers by 2020.
But that number has declined in recent quarters, while the number who are in management roles has increased.
A lot of people who are moving in are trying to make ends meet, said Steve Nisbett, the chief operating officer at a major transportation company that is looking to fill 200 jobs with part-time workers.
“They are struggling to keep up with the hiring and the retention,” he said.
“It’s a tough environment to be in.”
More: Read the McKinchesey report on the growing labor shortage here.
“These are the kind of people that are coming in for a short period of time,” said Michael Smith, an assistant professor of management at Harvard Business School.
“We know they have some skills and are very competitive, but the hiring process is still very much a race to the bottom.”
Some companies are looking for ways to address the hiring gap.
“You’ve got to be careful not to overcompensate for people who don’t want to work for you,” said Nisbert.
“I don’t know of any companies that haven’t looked for ways that they can get more people into positions where they’re not as valued, but they can be productive.”
Some of the companies that were surveyed by the firm said they were expanding their hiring, and others were recruiting more people to fill open positions.
“A lot of companies need to be making a concerted effort to hire and retain their workers,” said Smith.
McKinsey’s findings echo the concerns of some economists.
For example: The number of workers in the U.S. working part- or full-time has been falling, and a majority of U.A.E. countries are seeing the number decline.
The number and pay of people earning hourly wage jobs is declining in several countries including Spain, Italy and Germany, according a report published last week by the International Monetary Fund.
Many workers are losing the income they make when they join companies as part-timers, which is why employers are looking at ways to reward workers for staying at the company.
The U.K. is seeing a decline in the number and income of part- time workers.
It is now a net contributor to the U and a net drain of jobs from other parts of the world, according the IMF report.
More:Read the IMF’s report on net employment here.
Many people who work part- and full- time have struggled to make the necessary improvements to their careers and paychecks.
According to McKinsey, “companies are increasingly focusing on productivity to attract and retain workers, and some are increasingly offering paid time off for those who are not getting the best performance.”
But it’s not all doom and gloom.
The companies in the McKinseys survey that offer paid time-off are more likely to have greater employee retention than those that do not.
The McKinsey report found that more than 80% of companies surveyed by those firms offer paid leave or time off to their workers, compared to less than half of those surveyed by non-compete firms.
The company that offers paid leave also had higher employee retention rates, with 83% of those who took a paid leave reported that they had kept the job for the next three years or more.
The report did not identify which companies offer paid or paid-for leave, but many companies do.
In addition, most of the surveyed companies reported that their employees are using the leave to improve their health.
“The best advice I can give is to be patient,” said Rochon, of the McKinsells report.
“Don’t rush to put a plan in place, but get a sense of what’s going on and be patient.”
This story has been updated to reflect an earlier version of the story.
To contact The Associated Press reporter Jennifer Jacobs in New York, call (646) 823-5040 or email [email protected]
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