As the pandemic eases its grip on the US population, millions of workers are quitting their jobs. This has created a severe labor shortage; a whopping 42% of small businesses had job openings that they couldn’t fill. While larger companies are able to offer higher compensation, including more benefits and perks to attract qualified candidates, small local businesses may not have that luxury because they usually have smaller budgets to work with.
This leaves small businesses between a rock and a hard place because you’d need to hire more employees to return to pre-pandemic levels of business, but without the profit you’d make from that level of business, you’re unable to hire the employees you need to make that happen. While this may seem like a tough situation to escape, there are ways to work around it. Here are some ways small business owners can overcome the effects of the labor shortage and speed up their return to pre-pandemic levels of profit.
1. Loosen your job requirements.
One way to attract more applicants to your position is to lower the barrier to entry. If the skills needed to perform the job can be learned on the job, this is an especially good option to consider. Try framing the job opening as an opportunity for your potential employee to learn what they need to know to perform their duties instead of a position where they’d have to hit the ground running. This makes it less intimidating for people who might be interested in applying for your job opening－while not being overly time consuming for you.
With the rapidly changing circumstances around us, it’s important to do new training regularly and frequently, so your new employee’s training could be an extension of that program. You could also allocate time for an experienced employee to train your new employee so they could learn on the job. On top of that, it’s an opportunity to teach your new employee exactly how you want something done!
2. Reach out to your community.
People trust people they know, and who knows you better than the people already in your community? As a neighborhood establishment, you have the unique opportunity to reach out directly to people you might potentially employ. Try advertising at your local high school, community college, or community center. Even if the people there aren’t looking for work, chances are that somebody in their network is. For a more modern version of this, try posting your job opening on Nextdoor! Users of the platform are already local, and might be looking for work in their neighborhood, which is where you come in.
3. Establish your reputation as a good employer.
One good way to attract qualified employees without breaking the bank is to create an understanding and compassionate working environment. What does this mean? Here are some things to practice:
- Leading with empathy. Establish a culture of empathy. This includes granting time off for personal or familial reasons and understanding that they have lives outside of work and honoring that. You could also set a minimum amount of paid time off your employees must take to emphasize how much you value your employee’s well-being.
- Incorporating your staff’s feedback. The people you hire are the ones on the ground; they might run into some problems that you’ve never encountered before. Trust their judgment, and let them know from day one that you value their expertise and that what they say matters.
- Allowing flexibility with work location. If your employee can do part or all of their job remotely, encouraging them to work remotely when possible might make the job offer more appealing. It’ll save them the commute time that they’d probably rather spend elsewhere.
- Transparency with position/promotion timelines. One way to decrease the anxiety of taking a job is to create a timeline for promotion, which might look something like:
- Month 1: Testing period for new employees to see whether they like working at this position.
- Month 2 – 6: Individual work where nobody reports to them (assistant, intern, etc)
- Month 7 – 12: Monitorial, they’re responsible for a team or a project
- Months 13 – 17: Management, they’re responsible for delegating tasks… And so on, with appropriate wage increases for each tier. The benefit of doing this is twofold: Employees are incentivized to stay on longer because they know exactly how long they need to stay on to get promoted (higher feeling of job security), which translates to lower turnover rate. On top of this, this creates employees who can continue to train new employees, which means lower long-term and short-term financial and time costs for you!
4. Increasing wages, made possible by increasing revenue.
One obvious way to get more people to work for you is to offer to pay them more. This is easier said than done. With inflation making it more expensive to keep your business running, it’s even more difficult now to find the money to pay potential employees. Here are some ways to generate steadier / more revenue:
- This goes without saying, but increase your prices! (Here’s how to do that without creating friction between you and your customers.)
- If you have repeating customers, set them up on a subscription payment plan. This takes the headache out of collecting payments for you and, for your customers, the hassle out of having to complete a payment process every time they visit. (Here are 3 other reasons to consider subscription payments.)
- Make sure you’re paid what you’re owed. Too many small businesses let overdue payments slide because they don’t want to risk upsetting any customers. (Here’s how to collect what you’re owed gracefully.)
The labor shortage is hitting small businesses the hardest, but the good news is that there isn’t a shortage of things small business owners can do to minimize the impact. While you focus on hiring your next qualified employee, let Finli handle the busywork for you. From invoicing to setting up subscription payments to chasing down late payments, we’ve got you covered. Request a demo today!