As Halloween approaches, one thing is striking fear in business owners unlike anything else. It’s not a horror movie trope like vampires or werewolves. It’s not even the years-long pandemic, or the current supply chain obstacles that are impacting businesses around the world. No, the newest fear-inducing threat facing business owners is something different altogether: a hiring crisis.
This problem is nuanced and has been looming for a while now, but the fact remains that small businesses are struggling to find and retain employees. Thankfully, there are some measures businesses can take to stand out in a competitive job market and reduce churn.
A hiring crisis instead of a “labor shortage”
The COVID-19 pandemic forced nearly all businesses to change the way they operated. For some businesses, this meant shifting to a remote work environment. For others, this meant shutting down entirely. The availability of vaccines allowed businesses to start reopening, but only with new restrictions to preserve public health. These restrictions created tougher conditions for many workers, often without a commensurate adjustment in compensation.
As a result, many workers have started demanding better pay and benefits. Specific demands include higher wages, increased hazard pay, more sick leave, and better childcare and healthcare benefits. Many labor unions have gone on strike to leverage workers’ collective impact, but even non-unionized workers are making headlines
Can we please settle this debate already? There is no labor shortage. There is a living wage shortage, a hazard pay shortage, a child care shortage, a paid sick leave shortage, and a health care shortage.
— Robert Reich (@RBReich) October 6, 2021
Hundreds of thousands of workers—specifically in the hospitality, leisure, and restaurant industries—have put in their two weeks’ notice since the spring. The Great Resignation, as some analysts are calling it, has marked a major shift in what workers are looking for in a job. More importantly, it’s made clear that the so-called “labor shortage” is less about workers quitting their jobs and more about what companies are willing to do to attract and retain employees.
How SMBs have been impacted
A recent report from Indeed showed that businesses of all shapes and sizes have been impacted by the current hiring crisis, but small businesses are bearing the brunt of it. In fact, the report states that 82 percent of small businesses have found it difficult to hire in recent months, and 76 percent of all employers say this difficulty has had negative consequences for their businesses more broadly.
It’s common for small business owners and managers to wear many hats, and the hiring crisis has added to their list of never-ending responsibilities. Without appropriate staffing and skills in place, 91 percent of leaders, managers, and executives surveyed in the Indeed study said they have had to take on additional tasks or responsibilities to keep the business afloat.
This is on top of additional COVID-related responsibilities like coordinating extra sanitizations, health checks, and other protective measures. When most SMB owners are already stretched thin for time and resources, the added strain of the hiring crisis is a worst-case scenario.
What SMBs can do to stand out
In light of these challenges, many small businesses are making changes to attract candidates and retain existing employees. Some big measures speak to the heart of the business’s values, but even small changes can help businesses fill open positions.
Below are some ideas businesses might consider:
- Prioritize actionable DEI goals. Instead of only putting out performative statements about diversity, equity, and inclusion, making DEI goals part of the business’s KPIs will signify a true dedication to creating a more equitable and inclusive workplace.
- Promote flexibility in all areas of the business. A survey of 10,000 workers from around the globe found that flexibility—specifically with scheduling, PTO, and remote work—was the second most important factor in job satisfaction behind compensation.
- Provide transparency about salary ranges. Being upfront with prospective new hires about each position’s compensation helps set apart a business’s job listing from others that are similar.
- Increase flexibility with hiring approaches. This includes using virtual recruiting tools and considering candidates from a wider geographic area.
Perhaps the most significant thing a business can do to prevent current employees from leaving in the first place is to ask them for their input. An employee engagement survey with specific questions about job satisfaction can provide helpful quantitative data, but more importantly, it should create a dialogue about what they’d like to see from their company. Are employees feeling burnt out? Would they like to see new perks? Do they feel some company benefits could be improved? Asking these questions directly can provide a starting point for retention efforts.
In many ways, the competitive nature of the current job market presents an opportunity for small business owners to get a leg up. Workers are no longer willing to settle for subpar working conditions or lackluster compensation. Small businesses can use this to their advantage by highlighting the unique benefits that make their job openings special.