The labor market is tough right now for businesses looking to recruit new talent. On November 30th, 2022, there were 10.5 million job openings. In December, the unemployment rate stood at only 3.5%. With such high supply, very little demand, and a looming recession, your business may need to get creative when it comes to sourcing new workers.
Quiet Hiring is a trend that has recently taken hold because it is an efficient and cost-effective way to fill skill gaps. However, there is much to consider before fully embracing the concept within your organization.
Which type of hiring will work for your business?
Internal
At different times, key areas of your business may face more stress than other parts. Internal quiet hiring is reassigning current employees to different roles to fill a need during one of these times.
Consider this – Last year, Qantas Airways experienced a severe labor shortage, and productivity hit an all-time low when the amount of daily lost or unloaded luggage reached 10%. At that time, their top executives made the call to try quiet hiring. Over 200 senior staff members took on positions to help handle baggage to reduce their delays and errors.
Internal quiet hiring can come in many forms. Most commonly, it involves rearranging staff roles to fulfill an immediate need. It can also be used to recruit and promote current staff members to higher positions.
External
Hiring an external worker on contract to fulfill a role is the other version of quiet hiring. Utilizing contractors is not a new practice for organizations; contract workers are very common in industries such as healthcare, industrial, and IT.
Consider this – “Freelance” workers currently comprise 36% of the U.S. workforce. This includes workers who are hired on a per-project basis as freelancers, independent contractors, and consultants.
External quiet hiring is a great strategy to use when your current workforce does not have the skills to fill a necessary gap or is already stretched too thin.
What are the advantages of quiet hiring?
Most importantly, quiet hiring is a cost-effective and efficient way to fill skill gaps at any point in time. However, quiet hiring has numerous advantages besides saving time, money, and resources.
- It eliminates the hassle of a long recruitment process, and onboarding new workers is quick and easy.
- Companies can leverage current talent instead of using resources to find someone new.
- Businesses can easily deploy resources to the areas with the most need.
- The process can potentially improve employee retention, engagement, and productivity if the worker feels valued during the process.
- It offers the opportunity for “interoffice mobility.”
Overall, quiet hiring can increase productivity without increasing your full-time employee list.
What are the disadvantages of quiet hiring?
No matter the situation, temporary employees (and those in temporary roles), are generally less invested in their roles. As such, quiet hiring can potentially create a workforce that is disinterested in the company's future. Additionally, multiple problems stem from the use of temporary employees or roles.
- It may be necessary or appropriate to provide additional compensation to workers that move into alternate roles or take on extra responsibilities.
- Employees may feel overworked and undervalued, especially if they feel their original role is being eliminated.
- Businesses must consider the FLSA test for and ensure the role for which they are hiring a contractor does not meet the standards for an employee.
- Typically, companies must pay contractors a higher rate than an employee.
- Managing taxes can get complicated depending on the situation.
- There are specific reporting requirements to manage for contractors.
- If an employee receives different rates, garnishments, or pay rules based on the role they are performing, your team must be able to calculate payroll taxes properly.
Without clear communication when quiet hiring, workers can feel disengaged and unappreciated. As a result, the process can potentially lead to a decrease in overall productivity. It is vital for your company to make an informed decision about whether quiet hiring is right for your situation.
How can your team effectively quiet hire?
Quiet hiring may be efficient and cost-effective, but that does not mean it is simple. Your business must first understand the advantages and disadvantages of the process. Then, it is crucial for a worker to comprehend the full scope of the position they are accepting, including its responsibilities, compensation, and required training.
There are a few steps your team can take to make sure your quiet hire process sets both your worker and your business up for success.
Depending on whether you are externally or internally quiet hiring, this process may look slightly different. However, the overarching ideas are similar in both situations.
- Recruit or identify the right person to fill the role. the right person to fill the role.
- Communicate clearly the details and responsibilities of the position.
- Ensure the worker fully comprehends the role and that your expectations are aligned.
- Discuss the business’s expectations for the future.
- For internal hires, it is crucial for employees to understand how their role is changing and how it will look down the road.
- For external hires, clearly communicate what options will be available once the project is completed.
- Establish compensation and make certain the worker agrees.
- Complete the necessary paperwork for HR and payroll.
Can your payroll & HR provider support the process?
Finding the right person to quietly hire and fill a position at your organization is only one small step in the process. The manager will then onboard the worker, have them fill out the correct paperwork, and set up payroll to accommodate all changes.
For the ideal quiet hiring process, your payroll and HR providers should have:
- Tax and compliance systems that can meet the reporting requirements for different worker types.
- Payroll systems that can handle different pay rules, garnishments, and wage types for the same employee.
Without some of these crucial features, the process could put additional strain on your payroll and HR teams.
The Greenshades Difference
For over 20 years, Greenshades has been developing solutions to meet the direct needs of their customers. From payroll and benefits to HR and tax compliance, their software has you covered.
- For internal hires - the Greenshades Payroll/HR Complete package provides a solution that can handle quiet hiring with ease.
- Process payroll with ease by using multiple pay codes for each employee and automating payroll taxes. Administrators can even set a pay code to be active for a specific amount of time.
- Streamline the HR process by building onboarding workflows for different employee types and offer direct access to paystubs, tax forms, and more. Managers can also add extra documents that may require signatures for the role if need be.
- Efficiently manage taxes using one system to handle tax returns, payments, and reporting requirements.
- For external hires – the Greenshades Center for Federal 1099s offers a streamlined way to process, report, and file the necessary paperwork to all contract workers at the end of the year.
The Greenshades Payroll platform centralizes everything you need to manage your companies payroll. See how simple and efficient this solution is for all of your payroll needs.
Set your business up for success in 2023 with Greenshades’ comprehensive payroll system. See how it can make a difference in your hiring process.