A few years ago, talented and skilled Americans were clamoring to find jobs at small and large businesses alike. The tide has changed since then, and now many small businesses are struggling to find workers.
A new report by the National Federation of Independent Business (NFIB) finds that small-business owners are feeling optimistic; however, one of their most vexing challenges is finding competent workers to fill open positions.
According to the report, 29 percent of small-business owners reported having open positions they could not fill in February—the highest level since April 2006. Of those owners struggling to fill openings, 14 percent said the lack of qualified labor was their top business problem, which is at the highest level it's been since September 2007.
“The job openings figure is one of the highest in 40 years and this suggests that labor markets are tightening and that there will be more pressure on compensation in the coming months,” writes NFIB chief economist William Dunkelberg.
Interestingly, the NFIB report finds that most small businesses have been reluctant to raise their wages despite their inability to find skilled workers: Only a net 20 percent of businesses surveyed had raised their compensation over the past three months, down from 25 percent who reported that in January. And only 14 percent of respondents planned to raise their compensation in the months ahead.
Kevin Sheridan, a human-capital management consultant based in Winnetka, Illinois, says many small businesses are reluctant to increase their pay or to spend a lot of money to attract workers. “You’re either going to pay for top talent that is highly skilled or you’re going to hire someone who has a great attitude and train them—but training costs money,” too, he says.
Sheridan, author of the bestselling book Building a Magnetic Culture, says small businesses have several ways to increase the odds of finding talented workers to fill open positions:
Use a recruiter. They cost money, but a skilled recruiter that specializes in your industry can significantly help find talented workers who fit the needs of the organization.
Pay competitively. Small companies may not be able to always compete on pay with the largest companies, but they should at least make sure their pay is in range with other similar companies in their industry.
Build an engaging, fun workplace culture—and tell people about it. Pay is not always the biggest factor people care about when they choose jobs, Sheridan says. Some may want to work for an employer that offers them work-life balance, a fulfilling job, career development and a fun culture. Small businesses can often build such cultures much more easily than large corporations, and they should use that fact to their advantage. When interviewing a prospective employee, the business owner should tell that prospect about the company culture, so they can see the benefits of working there.
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