If you’re a business owner, you’ve never experienced anything like the last year. The pandemic has thrown stiff jabs on the global economy and society. Undoubtedly, it has changed the way people do their work, operate their businesses, communicate, and the way people live in general. Moreover, it has changed the overall landscape of work across the globe. Initially, employers were downsizing to cope with the impact of closing their businesses because of the early safety protocols and mandates that the government has put into place. Now, companies are trying to get back to normal and having challenges filling vacant positions. While they would like to fill in their vacancies, companies just aren’t attracting as many as they need, resulting in a labor shortage.
Many are speculating the reasons why business owners are struggling to hire the staff they need to stay open. In fact, job openings rose to an all-time high of 9.3 million by the end of April 2021, according to the Bureau of Labor Statistics of the United States. Many still fear contracting the disease and are concerned about working outside the home, while others have enjoyed the ability to work remotely, which gives them the work-life balance they have always wanted. Additionally, many parents needed to stay home due to childcare and health concerns, leaving the work they once had before. Then there are the relief bills that Congress implemented, which provided recipients of state unemployment an additional $600 in weekly benefits on top of what they were receiving. To reverse its perceived unwanted effects, the benefits have been reduced by half just recently. The prime reasoning is that earning less money from unemployment will force people to find a job, alleviating the worker shortage. But is it really all that it takes to address the underlying concern of having nobody wanting to accept the jobs available? Recent studies from BTIG has shown that among all the surveyed people receiving unemployment benefits, only 6% feel motivated to go back to work once their benefits end; only 14 % were getting more money from their benefits than from their previous work; aside from higher pay and improved benefits, work flexibility was one of the top reasons to get someone to return to hourly wage work. The data also suggests that the effects of this initiative would be minimal if there would be any. Now, if this was the case, then the answer to this matter could be less about worker pay and more about quality of life.
It is important to note that the US has had labor shortages in the past, even before the pandemic. Some of the most pressing reasons for past issues in labor shortages were due to a combination of different factors. The first is the compensation and stagnation of wages. In 1968, the federal minimum wage for workers was $1.60 an hour. In 2021, the federal minimum wage is $7.25 an hour. Considering that this has gone on for decades, job seekers are growing weary. In addition to this, workers are wanting better working conditions, work-life balance, and scheduling flexibility. They also want workspaces free from bullying, harassment, and employers that give them opportunities for advancement (and raises). With the pandemic forcing businesses to offer telecommuting, workers now realize that achieving work-life balance by having flexibility in doing their work is possible, which has become one of the most important things they consider in selecting a job. Especially when you consider those in large metro areas that spend hours per day commuting. The need for fair pay, combined with the changes brought about by the pandemic, is making it challenging labor market to recover.
Labor shortage poses great threats to businesses. Small businesses find themselves in a “Catch 22”. By not being able to fill essential and vacant roles, many businesses can’t keep up and must turn away customers. As a result, this is affecting their bottom line. Furthermore, once the position has been filled, the struggle will lie on how the business could retain them. However, businesses in every state and category could benefit from following this advice. These are some of the ways you could address work shortage head-on:
Raising Wages
Raising wages is being done to retain qualified workers. Major companies have resorted to this solution as this is the most straightforward way to attract new hires as well. The only downside to this is that the increase in labor cost might hit struggling small businesses differently.
Revisit Your Benefits and Offer Incentives
If you are operating small businesses and are struggling to find the budget for increasing wages, offering better benefits could help you attract candidates and retain qualified workers. These benefits include, but are not limited to, signing bonuses, referral bonuses, training opportunities, paid leave, flexible schedules and many more, depending on your willingness and capacity. In addition, retaining employees this way would improve your overall culture, leading to your worker satisfaction and retention.
Adaptive Management
You may offer more than just increased pay and benefits to potential employees. To keep current employees pleased and attract new hires, consider modernizing your processes to decrease the workload and implementing effective training programs. You could also consider adjusting your hours so to give your employees the needed time off to rest. With updated job descriptions and revamped training programs, you may find more qualified applicants for your post-pandemic vacant positions. The bottom line is you need to expand your pool of applicants. However you may choose to do this, it is important to remind yourself that establishing a great culture is priceless and will benefit you in the long run.
Job Flexibility
Workers’ plates are full, now, more than ever. They have a lot going on at home with the added responsibilities due to childcare and safety measures. Some of them even help their students with their virtual learning. As a result, workers face multiple barriers in rejoining the workforce. You can reduce these barriers by offering increased flexibility with scheduling and time off and attract the most qualified candidates.
Revamp Your Hiring Process
Improve your end-to-end hiring process. Compose a personalized job advertisement that will attract qualified candidates faced with a range of employment options. Be more approachable and provide more clarity at every step of the process. Highlight what makes your business an exciting workplace when doing interviews. You can also gather a pool of candidates within your immediate vicinity, which allows you to find verified neighbors and communicate with them. Ask for help from your employees. They know your culture very well, and they can speak good things about how you operate and manage. You can offer referral bonuses and incentives for your employees to connect you with qualified friends and family. Utilizing social media could also help you reach more people and spread the word about your job openings more quickly for free. Reach out to local high schools, colleges, and non-profit organizations and partner with them to hire new talents. They have a great number of individuals looking to land a job, and building your networks with them may do wonders. Consider other options that will make potential workers wanting to work with you.
These are some of the ways you can consider implementing to address the worker shortage. As you create your own action plans and implementation procedure, it is essential to remember that workers are humans. They are struggling with juggling all the roles they play nowadays. Treating them with respect and creating a more inviting workplace is certainly one way to retain the ones you currently have and attract new, qualified people. It is tough having family-related problems while dealing with management that seeks to find every bit of mistake from their employees. Enriching your workplace culture will help employees feel more comfortable working with you during this time. And on top of it all, thinking creatively about planning and organizing your next steps will be vital. Research how others have successfully overcome these adversities and see how they can be applied to your business. These new problems and issues that people face require unique solutions from business owners. Allow yourself to implement with your employees, and maybe they could offer you some interesting insights. Establishing a connection will most definitely bring desirable outcomes when done correctly.
Owning a business presents many challenges, don’t let payroll services or workers’ compensation insurance keep you out of the game. Contact us today to learn more about our services.
