The current U.S. labor market could be described as “low hire, low fire.” According to the U.S Bureau of Labor Statistics, employers only added 57,000 nonfarm jobs in June. In addition, the Conference Board’s Employment Trends Index declined for the second month in a row, therefore, signaling slow job growth ahead.
To put it in different words, right now, employers aren’t laying off a large number of workers while many are hiring slowly and cautiously. Quiet hiring is one technique that you may want to reacquaint yourself within a job market such as now to combat skill gaps holding back on hiring may create. If an employee departs, a project emerges, or technology evolves, you may be left without the necessary capabilities or capacity.
Staff Reconfiguration
A few years back, quiet hiring had its moment as a new catchphrase in HR/employment circles. Although the words themselves may no longer generate quite the same buzz, the workforce strategy behind them remains relevant.
Perhaps the most widespread approach is workforce redeployment. This is when an employer reconfigures its existing workforce to cover job duties left unattended or unfulfilled because of insufficient staffing. For instance, let’s say a regional sales manager leaves a business. Rather than hire a new one, leadership asks another sales manager to absorb the open territory.
In the short term, it’s a cost-effective approach for the employer because no hiring or training costs are incurred. But over time, employees asked to take on more work without a promotion or commensurate compensation adjustment can grow increasingly unhappy, and productivity can suffer. Burnout is a very real risk.
Sometimes the organization will eventually hire someone to fill the open position, but the employee who handled the work in the meantime may still feel exploited. In the worst cases, a new hire joins the organization at a higher level than the employee who was covering the work — further exacerbating resentment and lowering morale.
The lesson is clear: Be careful about asking employees to take on additional job duties because of staff shortages. To the extent possible, set a clear time frame for how long the bigger workload will last and provide incentives such as bonuses or supplementary time off. Ideally, align the added work with a career growth path. Also consider whether expanded duties or hours could affect an employee’s overtime eligibility, exempt status, or other wage-and-hour obligations.
There are other ways to quietly hire internally as well. For example, you can offer part-time workers full-time employment. Or you could outsource certain basic job functions and then retrain/upskill employees to perform more highly skilled roles. Just keep in mind that training/upskilling will entail costs, and you may have to raise compensation levels.
Alternate Options
Workforce redeployment isn’t the only manifestation of quiet hiring. The growth of the gig economy has given employers more options for filling skills gaps without immediately adding permanent staff.
But there are risks to engaging independent contractors — particularly when they’re merely a few clicks on an app away. Vet providers carefully, including those engaged through online talent platforms, to help ensure they have the necessary qualifications and experience. Beware of potential culture clashes between contractors and employees.
Above all, help ensure workers are properly classified under applicable federal and state laws. Misclassification, which typically occurs when a worker is treated as an independent contractor despite functioning more like an employee, can lead to liability for back taxes, unpaid wages, and benefits, penalties, and other costs.
Temporary staffing providers offer another way to obtain needed skills without immediately adding permanent employees. Generally, these firms recruit and employ workers who are then assigned to clients for a limited period or specific project. Before entering such an arrangement, clarify each party’s responsibilities for supervision, payroll, benefits, and safety and legal compliance. Also, carefully review the provider’s fees and screening practices.
Deliberate Strategy
Quiet hiring — or whatever one might call it — can be a practical response to a cautious labor market. But it works best when treated as a deliberate workforce strategy rather than a quick fix. As you look to fill your organization’s skills gaps, be sure to weigh the desired benefits against the potential negative effects on morale, productivity, compensation, and compliance. Contact us to discuss how staffing decisions are likely to affect your organization’s payroll, tax obligations, and overall financial performance.
