Layoffs pile up and Main Street still can’t find workers to hire for open positions
When it comes to salary, small business owners generally don’t play in the same league as larger companies.
Things are even trickier now in a tight labor market with rising wages and more states and municipalities publishing salary ranges, making small businesses look even less attractive from a salary perspective.
The stakes are especially high as small businesses are still in hiring mode, even as the economy slows, and finding workers is not getting any easier. Eighty-six percent of small business owners have expressed plans to hire one or more employees in the next two years, according to an October survey by workforce planning firm Homebase. Meanwhile, the National Federation of Independent Business, the leading small business trade group, last week reported the 10th straight month of a decline in confidence on Main Street, though there was little change in the need to hire more workers.
“Owners continue to have a gloomy outlook on future revenue growth and business conditions, but are still looking for new employees,” said Bill Dunkelberg, chief economist for the NFIB, in a release with its latest monthly survey. “Inflation, supply chain disruptions and labor shortages continue to limit the ability of many small businesses to meet demand for their products and services.”
The NFIB’s separate jobs report found that 90% of owners who hired people reported few or no qualified applicants for the positions.
Here are five ways small businesses can level the playing field to attract top talent.
Highlight more than pay in the window
Jim Marx, director of the retirement plans division at Edelman Financial Services, recently drove past a convenience store that advertised “competitive benefits” in its window, highlighting benefits such as the company’s retirement plan, medical benefits, and student loan assistance. . “It hit me to see that. They obviously want to bring in good talent and that’s what they emphasized,” he said.
The point: Small businesses need to make sure candidates know the benefits of onboarding with them, aside from a starting salary that has probably already gone up.
Benefits should be highlighted in job descriptions and discussed in every interview, during onboarding, and during training, says Kayla Lebovits, CEO and founder of Bundle Benefits, a wholly remote company focused on wellness, professional development, and team building. “If it’s only mentioned in the job description, but not promoted during the interviews, [a candidate] will think it’s not real.”
Involve current staff in the hiring process
Lebovits finds it effective to invite employees who actively use the various advantages of the company to participate in the application process. This way, candidates get a real-life idea of how benefits such as the company’s home equipment allowance and co-working membership grant work.
“These are not items with a high price tag, but employees are taking advantage of them,” Lebovits said.
Having a dialogue upfront about the benefits and finding out what candidates care about is critical as it sets the tone for the future. “It shows that the candidate is important to the organization,” said Victoria Hodgkins, CEO of PeopleKeep, a benefits administration software company. “In this work environment, candidates want to know that, and it gives them the opportunity to ask questions and be better informed.”
Study employee usage patterns, take advantage of popular benefits
Small businesses generally cannot afford to offer all the benefits that large companies can, but they can provide a range of highly desirable benefits that employees regularly use. “Determine what people are actually using and those are the ones you should be promoting because those are clearly the ones that people value the most,” Lebovits said.
Retirement, health and welfare benefits, in particular, can make a major contribution to improving employees’ financial resources. While most employees consider these benefits important, according to an October study by the Transamerica Center for Retirement Studies, there is a significant gap between the percentage of those citing their importance and the percentage of employers who offer them. “This is an opportunity for employers to increase the competitiveness of their compensation and benefits packages while helping their employees achieve greater long-term financial security,” the study said.
In general, wellness benefits are also in high demand. A remarkable majority of employees, 68%, said they are more likely to stay longer at their current job if their employer offers financial wellness benefits, according to a recent survey by TalentLMS, a learning management system backed by Epignosis, and financial wellness companies Tapcheck and Enrich . The research also shows that 61% of employees are more likely to stay in their current job if financial health training and resources are provided.
Parental leave is another important benefit worth considering. A recent survey by disability insurance company Breeze found that most employees would prefer their employer to offer paid parental leave rather than sight insurance, employer-paid fitness or mental health benefits, employer-paid social events or a refund of student loans. The study looked at 1,000 actively working adults between the ages of 22 and 40.
Avoid an all-benefit approach
It’s important to offer a range of benefits that can appeal to different people.
For example, don’t just offer yoga or meditation apps or gym benefits; offer multiple ways for employees to recharge, Lebovits said. “People take care of themselves very differently.”
And while the Breeze study found that parental leave is more popular than vision insurance among workers age 40 and under, that could change once they reach “reading glasses” age.
There can be significant differences in the types of benefits that appeal to employees based on gender, age, and types of work environments.
A PeopleKeep survey of more than 900 small business employees in May found that 70% of women view mental health benefits as “very or extremely” important, compared to 49% of men. Women also value flexible work schedules (84% to 70%), paid family time off (73% to 61%), and professional development (64% to 57%) more than men, while men value internet and reimbursement of phone bills than women (40% to 32%), according to the survey.
Turn existing employees into referral sources
If your existing employees are happy, they will be more likely to recommend a job opening at the company to others. This means ensuring that existing employees are excited about the benefits you offer – and to achieve this result, you need to make employees feel engaged.
Sixty-two percent of respondents to a recent survey by Edelman Financial said they “don’t always feel represented” in their company’s messages about benefits. The sentiment is even more striking among women: 68% say they don’t always feel engaged – significantly higher than their male counterparts (58%).
An overwhelming 93% of employees who don’t always feel represented said they were more likely to benefit from financial wellness support if it was tailored to their specific background and family circumstances, the survey found.
Finally, small businesses need to understand what attracts job seekers in the first place and capitalize on these benefits in all their communications with candidates. Seventy percent of small businesses cited a sense of community, followed by workplace flexibility (69%), close relationships with colleagues (66%) and closer relationships with managers (53%), according to Homebase.