With unemployment at near-record lows and consumer confidence high, small business owners have a lot to celebrate.
But will a shortage of qualified employees keep entrepreneurs from capitalizing on economic opportunities?
It’s hard to believe a labor shortage can be a reality so soon after the Great Recession. However, some 16 percent of small business owners in the most recent Wells Fargo/Gallup Small Business Index say hiring and retaining qualified employees is their number-one concern—up from 13 percent last quarter. That’s a problem, since 32 percent of business owners polled plan to hire in the coming year—the second-highest percentage in the 14-year history of the survey.
Small business owners in the National Federation of Independent Business’s most recent Jobs Report are struggling to hire, too. Over 50 percent of small business owners with jobs to fill report finding few or no qualified job candidates. That’s an all-time high.
It’s not just one region of the country or one industry, either. The latest Federal Reserve survey reported by CNN Money says construction, manufacturing, healthcare, retailing, hospitality, and finance are among the industries affected.
Businesses of all sizes, not just small companies, are facing the same challenge when it comes to hiring qualified employees. Still, small business owners may be at a disadvantage when competing with big corporations that can offer new hires lavish benefits and high salaries.
Try these ideas to help surmount the obstacles of finding good workers.
1. Lighten up on qualifications.
Some companies have gotten into the habit of being super-picky about new hires. If you expect to find a candidate with the precise skills and work experience you want, you may be waiting a long time. Instead of demanding a job candidate who can step into a position without any training, cast your net to include job seekers who have some, but not all, of what you’re looking for. Aptitude and attitude can be just as important as experience—and if you’re willing to provide in-house training to get a worker up to speed, you can probably find a stellar employee for less than the cost of that elusive “dream candidate.” Open your mind to job seekers in their 50s, job candidates with disabilities, or stay-at-home parents who want to reenter the workforce.
2. Bite the bullet and pay more.
The number of small companies planning to increase employee compensation hit 23 percent in the NFIB survey—the highest reading since March of 2000. Wring more money out of your budget, and spend it on wages. Don’t forget about benefits, either: Health insurance and retirement plans, such as a 401(k), are much-wanted perks for job seekers of all ages.
3. Involve your employees in the search.
Ask your staff to share your company’s open positions on social media, and spread the word that your company is hiring. Tapping into their social networks can uncover “passive candidate” who aren’t actively looking to change jobs but are open to considering a good offer. Motivate employees to help you hunt down candidates search by offering bonuses for any recommendations that result in a successful hire.
It’s no longer an employer’s market, and if you want employees worthy of working at your business, you must first convince them your business is a worthwhile place to work. The experts at SCORE can help you develop a strategy for finding the workers you need.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.