After COVID-related shutdowns increased unemployment levels, many workers haven’t returned to the same jobs they had before. With that, your business may be facing a labor shortage. When demand for your products and services carries on, what can you do to keep your vacancies filled?
Here’s what you need to navigate these shortages and continue to run an effective business.
What’s happening with today’s labor shortage?
According to Deloitte, while job openings have grown by 33% since 2019, the number of unemployed Americans has been stuck at over 9 million. Ongoing risks and concerns from new COVID variants have made some jobs less attractive to job seekers. And surprisingly, parts of the population moving from cities to suburbs has also disrupted the labor market.
You can see the effect of the labor shortage most in brick-and-mortar businesses. With a limited labor force, physical businesses have shortened operating hours and changed service models. Online businesses are also facing more competition as remote work is becoming a standard practice. This allows even more job mobility and means that your business could be competing with companies around the world for a workforce.
What caused the “great resignation?” It’s a combination of COVID’s impact and long-term trends in the US workforce. According to Pew Research, most workers are quitting due to low pay, no opportunities for advancement, and feeling disrespected.
If you’re struggling to hire or retain employees, here’s what you can do.
1. Build a strong brand as a reputable employer
Company culture isn’t just for larger businesses. Just like you maintain your positive reputation for your customers, you need to do the same for your current and potential employees. Document and share your business’s values both in-person and on your website. This will make it clear to prospects what they can expect from your business culture.
Acknowledge and reward your staff when they demonstrate those values in their work. This is where you can really differentiate yourself from larger “more corporate” businesses. Make sure you’re keeping your culture updated and relevant by actively seeking out your employees’ feedback and incorporating their ideas.
2. Mix low-skill and high-skill duties in one job
Today’s job seekers are looking for more responsibility at a fair wage. Instead of bundling all your low-skill duties into one “ground-floor” job, try structuring your roles as a mix of low- and high-skill duties. You may find that you attract more candidates that can easily fill your needs, or candidates that will find it fulfilling to grow into the role.
Add training or mentorship opportunities for your employees to expose them to new skills. Allow them to shadow you or other employees to learn more about the business. If you have a high turnover rate in your entry-level roles, ask your employees for feedback. They might be leaving for reasons that are easy to address.
At the same time, consider some of the more specialized workers in your business. Could they take on more responsibilities? For example, your bookkeeper may be able to take on more administrative roles. Social media content creators may be able to handle more client-facing responsibilities, including sales and customer service
3. Pay your employees more
From an economic perspective, a labor shortage means that average wages will rise until that shortage is filled. If you’re not offering higher wages, chances are there’s a competitor out there that will. Try offering more than minimum wage even for entry-level positions. If you mix duties as recommended above, your workers will be taking on more responsibilities that should earn a higher wage.
4. Give your employees a whole package
Giving your employees benefits beyond the minimum required by your state comes with many positives. It can help you build a team that will stay with your business through the good times and the bad.
One of the most important benefits that people are looking for is flexibility. That means finding the employee who works one day or a few hours a week is just as important as finding a whole slew of full-time workers. Having good “flexible” staff allows you to offer your full-time workers greater flexibility in taking time off or doing other non-storefront work from home on certain days of the week.
While the cost of providing full health insurance to employees might be too expensive for your business, consider setting aside a monthly stipend for each employee’s health. Employees could apply for affordable coverage through Affordable Care Act marketplaces, and then this stipend can be used to cover the cost of basic medical appointments.
5. Understand your true operating cost
While there’s a labor shortage, there’s also inflation in today’s market. This means you have one of the best chances right now to increase your prices to recuperate any increases in your employee wages and other operating expenses. Revisit your business strategy and adjust all of your expenses, including labor costs, so that your prices reflect your true operating cost.
If you do change your prices, make sure to communicate these changes to your customers. Showing your customers what goes toward the well-being of your staff could make it easier for them to accept your new pricing. It might also encourage them to spend more!
Navigating job candidates
Because so many people have changed careers in the past year, being able to check an employee’s qualifications for a job can be difficult. Previously, it was easy to check if a candidate has worked in the same or similar job for a certain number of years before applying. Now that a large portion of the population is job-changers, you’ll need to seriously evaluate their skills. Here are a few recommendations:
Do a deep dive into their references
It’s quite easy for someone to put together a set of seemingly glowing references. Now that there are fewer candidates to choose from, employers should really be diving deep into these references. Understanding the people that recommend your candidates and their own credibility can help to validate what they are saying about your applicant.
Give your prospects real-world tests
The only way to truly check on their skills is to test them. Hiring employees on a probational basis and giving them key tasks to do that prove their work experience is one way to accomplish this.
Pursuit can help your business take on these challenges
Whether it’s adding on new employees or working to understand your true operating costs, Pursuit can help you find the funding that fits your needs. With more than 15 loan programs, we help small business owners take on new challenges and opportunities every day. Contact us today to learn how we can help your business.