What is zero unemployment and why should it be important to agents? Technically, zero unemployment would be reached when every able-bodied person who wanted to be employed was employed. Statistically, this is impossible. To clarify, what we are talking about here is when the “official” unemployment rate drops so low, it feels like zero to the person responsible for hiring. To understand how unemployment can feel like zero when published statistics say otherwise, you must to understand the three widely accepted types of unemployment:
1. Cyclical unemployment: This occurs due to ups and downs in the economy over time. Recessions will cause cyclical unemployment, and this is by far the most dangerous type.
2. Structural unemployment: This is when the demand for a specific type of worker decreases or the skills of potential workers don’t meet the job requirements. This is the most difficult to fix as it takes time to retrain the workforce.
3.Frictional unemployment: This is sometimes called “transitional” unemployment, and it happens when workers are transitioning between jobs or into employment.
At the end of 2017, the unemployment rate was at 4.1%, the lowest we have seen since 2000. Searching prior to 2000 for rates that low will take you all the way back to 1969. Unemployment is still incredibly low; in some areas of the country, we are barely over 1%.
If you are under the age of 40 and involved in hiring and recruitment, you haven’t experienced this low level of unemployment in the market before. If you are over the age of 40 and have been hiring your entire career, you have experienced it just once. This means you might need to rethink how you are recruiting in an employee-driven marketplace.
When unemployment is high, you can do some things in your recruiting process that you simply can’t do when unemployment is this low. Employees have many choices! Agents and dealers who are too rigid in their processes, drag their feet, or aren’t competitive on earnings simply won’t fill positions.
Employers must constantly be thinking about the next hire in this environment, because if someone leaves, you may have an empty seat for a very long time. You must constantly be on the lookout for good, strong potential candidates that align with your business needs and values, for now and in the future.
If your dealer clients have an immediate, pressing need for experienced F&I managers, here’s what you need to do:
Define the job. First, know what you want to hire. Be as clear as you can be, and if you are working with a third party, be as clear as you can be with them. Update any job descriptions more than two years old. Make sure it is an accurate reflection of the position and that the earnings are realistic (not pie in the sky), especially when working with commission-based plans.
Evaluate your staff. Once you are clear on what you want, look at your dealer’s current F&I team. On a regular basis, a current employee will apply for an opening we place for a client. That tells us two things: First, the employee is already looking for another opportunity. Secondly, it tells us that they don’t think that opportunity exists with you. When this happens, I encourage clients to allow the employee to walk through the entire process, then determine if they are qualified or unqualified. Promoting means you get to hire someone with less skills, which should be easier.
Write great ads. In an employee-driven market, you must grab attention, since there are several employers trying to hire them. Your ad writing skills have a direct impact on the quantity and quality of the candidates you attract. If you post poorly written ads that are either too vague or too detailed, you run the risk that candidates will self-eliminate themselves before you have a chance to interact with them. Your ad should be positive, truthful, and showcase some of the benefits of working for your dealer.
Post ads and make connections. The most popular public job boards are Indeed and ZipRecruiter, then there are social media platforms, like Facebook and LinkedIn. Make sure you utilize regional/local sites, specialty sites and more. If you have jobs posted on your website, keep them updated! Let everyone on your team know about the position if you can. Get the word out that you are looking.
Budget for recruiting. Job boards can be expensive, especially when competition for employees is strong. Indeed still allows posting for free in most markets, and it works for some positions in some markets. For most, however, you need to anticipate paying to promote your jobs. LinkedIn has proven for us to be the most expensive and most challenging site to post ads. Job postings must be on target, otherwise you could wind up spending considerable money and get a lot of candidates that don’t meet your criteria.
Consider nontraditional sources. When unemployment is low, you need to tap into nontraditional sources. There are a lot of 60-plus-year-old employees still in the workforce. Are you eliminating them because you believe they can no longer do the job? Bad idea. Clients find these employees to be lower maintenance, as they are punctual and rarely have disciplinary issues.
- Consider veterans. It can be tough to translate skills from the military to civilian jobs, but if you conduct thorough interviews, you will probably find some transferable skills. Also look to local colleges. Many schools have made internships mandatory for some degrees. Internships can be paid or unpaid, and you get the opportunity to convert them to permanent employees.
- Another nontraditional source to consider is those that have served time in jail. Clearly, the offense can’t be such that it’s not a good fit for your business, but there are many who exit the penal system and have difficulty finding work. Keep in mind, these individuals may have requirements they must meet as a condition of their release.
Carefully screen candidates. Getting candidates to apply is only a small portion of the process. You need to screen, interview, assess skills, interview again, and check backgrounds, references and more. When unemployment is low, many candidates that you receive résumés from don’t appear to be motivated to move through the process. They are most likely currently employed, so they are juggling their current jobs while trying to secure another one, and they may have 10 employers like you chasing them at the same time.
Communicate effectively. Don’t rely on email communication. Job sites that don’t allow you direct access to candidates via email can create bottlenecks for you. You should make a phone call to the candidate when you send them the first communication via email. This prods them to look at their email, lets them know you are interested, and informs them of what to do next.
- Don’t expect them to answer their cell phone. You must leave great voicemail messages if you want candidates to take action and engage with you. Additionally, keep them updated in the process until you make a decision.
Stop looking for the purple unicorn! Your screening process should not rely upon a long, rigid checklist. If you only hire F&I managers with four years of experience and a college degree, it’s going to be a long, hard process to fill that position. If this is how your company or your clients are trying to screen candidates, be ready to wait a long time.
When unemployment is much higher, your focus is on how quickly you can eliminate people that don’t fit your checklist. When unemployment is low, you must consider how you can use the available candidates to meet your needs. I’m not advocating settling for mediocre employees — I’m just saying stop waiting on purple unicorns when a red or pink one will do just fine.
Screen for transferable skills and trainability. … And then accept that you will have to train them. Remember the structural unemployment definition: when the skills of the candidates don’t match the needs of the employers. There are still good candidates available, but you will likely need to train them.
Currently, finding talent is more challenging than it has been in very long time. If you are struggling to find F&I staff, you probably need to adjust your practices to be relevant in the employee-driven marketplace.