I’ve written a lot recently on the major challenges distributors have faced on the labor front over the past year, and for good reason. Besides navigating the worst inflation the U.S. has seen in 40 years — including the pricing strategy that goes with it and a supply chain backlog that seems to have no end in sight — labor has been distributors’ biggest hurdle of 2021 and 2022.

Distributors across-the-board have raised wages, adapted to a hybrid working environment for office positions and tried to cater to wants and needs of today’s workforce, but many are still struggling to both keep talent from leaving the company — often to a competitor — and to recruit new talent.

But it’s not all doom and gloom. The wholesale trade sector saw overall employment grow 3.1% in July year-over-year, following a 3.5% gain in June. The latest jobs report from the U.S. Labor Department showed that 10,500 jobs were added to the sector in July, with durable goods responsible for 76% of them. Meanwhile, the U.S. added an impressive 528,000 total jobs in July, blowing past economists’ projections, with the country’s unemployment rate falling another percentage point to 3.5%.

So, while wholesale trade’s job growth isn’t at a blazing pace, distributors must be doing something right nonetheless on the recruiting front.

This spring, Channel Marketing Group recently conducted a distribution survey for GRN Coastal, a top sales and executive search recruiting form that has extensive experience in the electrical industries. The research focused on trends in recruiting efforts by surveying current employees, candidates and HR/management in the electrical distribution market. David Gordon, president of Channel Marketing Group, was willing to share the research’s findings exclusively with MDM, which were highlighted by a number of “disconnects” between candidates, employees and management. Gordon was a key validation source for MDM’s 2022 Top Distributors feature, so I was happy to return the favor by sharing some of those results with our MDM Premium audience.

The survey was sent to a targeted group of individuals within GRN Coastal and Channel Marketing Group’s databases. The result had over 335 respondents, with 60% of respondents in the electrical industry. Overall, 68% were from construction trades, 22% were from “other industries” and 10% were from the industrial markets; 51% were from distributors, 21% from manufacturers, 9% from manufacturer representatives and the remainder were “other.”

A few more survey demographics:

• 37% classify their employer as a large company, 30% as a medium-sized company, and 33% were from a small company.
• 40% of respondents classified themselves as an employee or candidate, while 60% were in management (HR or senior management).
• 29% of respondents had less than 10 years of experience; 25% had between 10-20 years of experience; 23% had 20-30 years’ experience and 23% had more than 30 years of experience.

The survey’s resulting report, packaged by GRN Coastal for Electrical Trends — a service of Channel Marketing Group — analyzed the findings based on respondent type, segmenting them into results from Employee/Candidates and Management.

I’ll highlight only some of the report’s interesting findings here. There were plenty to be had:

Why Do Candidates Leave?

Employee/Candidate Results
Asked to choose reasons an individual would consider leaving their company, “Financial Growth” was expectedly the top choice, picked by 69.4% of respondents, followed by “Growth Potential” at 40.8%; “My Boss” at 32.7% and “Current Company Culture” at 28.6%. So, while money is always a top factor, it’s certainly not the only one.

Even more interesting in this section:

• 35% of employee/candidate respondents said they would leave their company for a position that was a lateral move.
• 76% would change employees for a lateral move that has more upside within the next 12 months. This suggests that not only are employees very willing to leave, they are likely actively eyeing other opportunities right now that they deem to be better.

Management Results
Similarly, hiring managers were asked to rank the factors they deem to be most important to candidates today. And like the Employee/Candidate results, “Compensation” was the top pick by a good margin, with an average score of 6.21. “Work/Life Balance” was second at 4.33; followed by “Company Culture” at 4.30 and “Growth Opportunity (future with company)” at 4.01.

What Do These Results Mean?
The discrepancies here show that, while money is king, employees/candidates view growth potential as a higher priority than management does. Likewise, employees/candidates view their relationship with their boss as a much higher priority, as “Their Relationship With Their Boss” was picked as only the sixth-highest priority by management.

Money talks. The survey found that 55% of employees/candidates expect at least a 15-20% increase in compensation, with a fairly even spread between those who expect raises of 10-15%, 15-20% and 20-25%. Conversely, 38% of hiring managers feel that candidates expect a 10-15% raise. This means that, while both sides know compensation increases are crucial, employees/candidates are expecting more than hiring managers are expecting to give.

“Hiring managers are using internal comparable, ‘industry’ standards, local geographic standards, and prior employment payment with only 49% of hiring managers reviewing sources such as Glassdoor to understand exiting employee feedback,” the report stated.

Culture

Distributors of all types like to promote their positive working environment and culture. GRN Coastal’s survey sought to find out if they were backing it up. The survey presented a list of 18 words used to describe company culture, and all respondents were asked to choose five they identified with most. Of the top eight choices overall from both Employees/Candidates and Management, only four were within 9 percentage points of each other, leaving four considerable discrepancies.

• 50.0% of Employees/Candidates picked “Ethical” among their top five culture words, compared to only 35.6% of managers.
• “Teamwork” was chosen by 55.9% of Managers, compared to only 40.9% of Employees/Candidates.
• “Empowering” was picked by 39.0% of Managers, compared to only 27.3% of Employees/Candidates.
• “Accountability” was picked by 36.4% of Employees/Candidates, compared to only 25.4% of Managers.

What Do These Results Mean?
This shows that a key disconnect is that companies want to promote their teamwork, whereas candidates desire an ethical and rewarding environment. The report noted that managers shouldn’t interview candidates just based on skills and resumes — they should also determine if a candidate is a cultural fit. The opposite is also true: candidates aren’t looking for employers where their skills translate well, they want to know it is a good working environment.

“Companies are being interviewed as much as they are interviewing,” the report explained. “While the role and the compensation need to align, candidates are selecting companies based upon a company’s cultural alignment with their belief system. The more a company can identify its culture, live and ‘sell’ it, the more productive, and happier, an employee they will be able to recruit.”

Much More in the Report

I only touched on a couple of key areas here. Led by principal John Salvadore, GRN Coastal packaged the full research results into Electrical Trends’ new whitepaper here, which you should check out for much more insights into the differences between what employees/candidates deem important vs. how that compares with hiring managers. Electrical Trends is a service of Channel Marketing Group.