The economy is doing well, with unemployment hovering just above 4%. But there’s an obstacle keeping many business owners from taking advantage of the good times: a labor shortage making it hard to find qualified employees.
In the most recent Wells Fargo/Gallup Small Business Index, 16% of small business owners cited hiring and retaining qualified employees as their number-one concern, an increase from 13% the previous quarter. At the same time, nearly one-third (32%) of business owners in the survey say they plan to hire in the coming year—the second highest percentage in the 14 years the survey has been conducted.
Small business owners surveyed in the National Federation of Independent Business monthly Jobs Report state they are having record difficulties with hiring, too. More than half (54%) of small business owners seeking to fill positions say they’re finding few or no qualified workers, an all-time high.
Labor shortages are affecting industries nationwide, says the latest Federal Reserve survey reported by CNN Money, including construction, manufacturing, healthcare, retailing, hospitality, and finance.
The labor shortage isn’t limited to small businesses, of course. Companies of all sizes are struggling to find qualified workers. But with so many jobs going unfilled, small business owners are also at a disadvantage compared to larger companies with lavish benefits and perks.
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How can you overcome the hurdles to finding qualified workers? Here are some ideas:
1. Revise your idea of what “qualified” means
During and right after the Great Recession, employers could afford to be finicky about new hires, and wait for a candidate with the exact work experience to match the job description. Some companies let jobs go unfilled rather than hire someone who needs training.
But how realistic is it to expect a job candidate to step right into a position without any training? Open your mind to job seekers who have the aptitude and personality for the job, even if they’re missing some of the experience your ideal candidate would have. By providing in-house instruction to get them up to speed, you might be able to hire a good worker for less than you’d pay for your dream candidate.
Also consider new ways to widen your scope of candidates. For example, what about interviewing job candidates over age 55, job seekers with disabilities, or stay-at-home parents seeking to reenter the workforce after years of raising children? Perhaps you can hire two part-time employees instead of one full-timer, or even split a job between two people.
2. Offer higher wages and/or better benefits
The number of small companies planning to raise employee compensation in 2016 hit 23% in the NFIB survey—the highest reading since March of 2000. Look for ways you can squeeze money out of your budget so you can afford to spend more on your employees’ wages. Higher-paying jobs are more attractive to job candidates. However, good benefits can also tip the scales in your favor. In particular, health insurance and retirement plans, such as a 401(k), are highly desirable for job seekers of all ages.
3. Get your employees involved as advocates
Have all your employees spread the word that you’re looking to hire. Ask them to share your open positions on their social media pages and tell friends and family that your company is hiring. See if you can tap into their social networks to find “passive candidates” who aren’t actively looking to change jobs, but are open to opportunity. For example, do any of your employees know former coworkers who have relevant experience? You can motivate employees to help in your candidate search by offering bonuses for any recommendations that lead to a hire.