The economy is booming and with the unemployment rate at
3.6 percent, it’s at the lowest it’s been in 50 years. Small business owners still have a positive outlook for the economy with higher expectations to expand and increase their staff. While the jobs number looks great for our economy, the downside is that the employment market is extremely tight and small business owners are having a harder time hiring new and fully qualified employees.
Bank of America’s Fall 2018 Small Business Owner Report asked small business owners about their outlook for the hiring in this economy and the results were very interesting. For example, 58 percent of the business owners who were hiring in 2018 had difficulty finding qualified candidates to fill the vacant roles. Additionally, 50 percent believe the tightening labor market had a direct impact on the ability to hire.
Small Business Hiring Tactics in a Tight Labor Market
According to
Inc., small business owners struggle with hiring employees for many reasons, including:
- Having less money for competitive offers
- Having no visible brand
- Lacking an HR team
- Little recruitment or networking opportunities
However, job seekers believe that working for small businesses have many advantages, including less bureaucracy, a collaborative environment, greater responsibility, more creative freedom and an entrepreneurial experience.
There are many tips for hiring for small business in this tight job market starting with dramatically adjusting your
hiring strategy in order to hire the right people for your organization. To stand out from the crowd, small businesses need to be creative in their hiring practices. Here are a few tips to keep in mind:
- Write detailed job descriptions: ZipRecruiter recently found that employers have been writing longer, specific and detailed job descriptions. This will ultimately help prospective applicants figure out if the job is right for them as well as make it easier for the employer to get the type of workers they need.
- Use social media for recruiting: Small businesses are not only using social media to market their product to potential customers, but also their company to potential employees. Companies can share content on social media platforms that showcases their culture and work environment for recruitment purposes. Social media also allows current workers and potential hires to share open positions in their own networks, expanding the reach of the job postings.
- Lowering credentials and college requirements: To get the workers they need, some small companies have begun to lower their credentials and college requirements. In fact, the Bank of America survey showed that small business owners are looking at integrity (60 percent), work experience (53 percent) and passion for the work (46 percent) over education (30 percent) and tech savviness (19 percent).
- Increase wages: In such a competitive market, small business owners will need to increase their job offers to attract prospective employees. This can be more difficult for small businesses on a tight budget, but could be worthwhile in the long run. In fact, according to the Bureau of Labor Statistics, wage growth for the last eight months has been at or above three percent.
- Engage in the gig economy: Small businesses are embracing the gig economy and hiring freelancer or contract workers to fill in on a project-by-project basis, increasing flexibility and productivity.
- Invest in employee training and productivity: In a tighter job market, it is crucial to invest more to train current employees and future hires. Some companies might consider rearranging teams to cover unfilled positions or even invest in technology to help boost productivity.
- Focus on employee retention: Find out why employees are leaving your business, and then make the changes needed to keep your valued employees on staff.
- Flexible work culture: Small businesses are known for offering more creative freedom compared to larger organizations. Employers should embrace more a more flexible work culture including offering remote work, flextime and even a casual dress code.
Growing for the Future with AmTrust
The job market is beginning to show signs of slowing down, as new job numbers have been decreasing for the last few months. But, small businesses should still keep the above hiring strategies in mind even in a slower economy.
AmTrust Financial understands and supports small and mid-sized businesses across the country. For more information about our
small business insurance solutions, please
contact us today.
This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.