What today’s labor market means for small business owners
The U.S. unemployment rate recently dropped to 3.7%, the lowest in nearly 50 years. This is good news for workers and the economy as a whole, but it’s making it hard for employers — including small business owners — to find and retain employees.
According to the Fall 2018 Bank of America Business Advantage Small Business Owner Report, 58% of the business owners who tried to hire in 2018 said they had a hard time finding qualified candidates. Of these, 65% believe that the inability to fill open positions has limited their business’s growth.
That means that in today’s labor market, successful small business owners need to be as deliberate and strategic about finding employees as they are about attracting customers and clients. Here are a few ways to build an effective team despite stiff competition from other employers.
How to find talent in today’s labor market
1. Develop the talent you have
Research suggests that filling positions internally increases the chance that your employees will succeed in that role. Promoting internally can also increase engagement and loyalty from your employees, and even increase the chances they’ll encourage their friends and family to work for your company.
2. Offer competitive compensation
The simplest yet hardest solution is to pay people more. You don’t necessarily have to beat the rest of the market, but you do need to offer competitive wages. Find out what other employers in your area and industry are offering, and make sure your wages and benefits are at least comparable. If it’s not economically feasible for you to increase your wages, think about what you can do to make it possible. Can you improve efficiency, or increase revenue to pay for increased compensation?
3. Be choosy but not picky
Top talent is valuable, and hiring the wrong candidate can be immensely costly. That said, it’s hard to find the “perfect” employee in any circumstances … and it’s a lot harder in a tight labor market. When you’re writing a job description or reading through resumes, make sure you’re clear about what you want the most. Rather than asking for an arbitrary amount of experience or a specific education level, try to focus on essential, demonstrable skills. Consider looking past gaps in a resume or a spotty record if you find someone with the right skills, attitude, and drive.
4. Improve and accelerate your hiring process
According to recent research from Clutch, 91% of recent hires say that the interview process influences their overall opinion of a company. An interview is an opportunity for you to learn about a prospective employee, but it’s also a chance for you to show them why your company is a great place to work.
You should also be prepared to make a decision quickly. According to Clutch’s research, 43% of recent hires say they got a job offer within 2 weeks after they started the application process. Since most job-seekers apply for a couple of different positions, moving quickly will reduce the chances that someone else will hire your candidate before you.
