Layoffs mount, and Main Street still can't find any workers to hire for open jobs
- The latest NFIB monthly small business confidence and jobs reports show that Main Street is still looking to hire even as economic sentiment continues to decline.
- But the vast majority of open positions (90%) are seeing few to no qualified applicants apply even as layoffs mount throughout the economy.
- Higher wages get harder for business owners to offer as inflation increases as a margin pressure amid a lower sales outlook, but there are other work benefits and perks that can be used to attract talent.
When it comes to salary, small business owners generally don't play in the same league as larger companies.
It's even trickier now in a tight labor market with rising wages and with more states and municipalities posting salary ranges, which stand to make small businesses look even less appealing from a salary perspective.
The stakes are especially high given that small businesses are still in hiring mode even with the economy slowing, and it isn't getting any easier to find workers. Eighty-six percent of small business owners have expressed plans to hire one or more workers in the next year or two, according to an October survey from employee scheduling company Homebase. Meanwhile, the National Federation of Independent Business, the main small business trade group, reported last week the tenth-consecutive month of a confidence decline on Main Street, though little change in the need to hire more workers.
"Owners continue to show a dismal view about future sales growth and business conditions, but are still looking to hire new workers," said NFIB Chief Economist Bill Dunkelberg 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 the demand for their products and services."
The NFIB's separate jobs report showed that among owners hiring, 90% 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 wages in the window
Jim Marx, director of the retirement plans division at Edelman Financial Services, recently drove by a convenience store that advertised "competitive benefits" in the window, highlighting perks such as the company's retirement plan, medical benefits and student loan assistance offering. "It floored me to see that. They obviously want to get good talent in the door and that's what they were highlighting," he said.
The point: Small businesses need to make sure candidates know the benefits of onboarding with them beyond a starting wage that has already likely gone higher.
Benefits should be emphasized in job descriptions and discussed in every single interview, during onboarding and in training, said Kayla Lebovits, chief executive and founder of Bundle Benefits, a fully remote company that focuses on wellbeing, professional development and team building. "If it's just mentioned in the job description, but not promoted throughout the job 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 company's various benefits to participate in the interview process. This way, candidates get a real-life sense of how benefits such as the company's home equipment stipend and co-working membership subsidy work.
"These aren't big price-tag items, but employees take advantage of them," Lebovits said.
Having an upfront dialogue about benefits and finding out what's important to candidates is critical because it sets the tone for the future. "It conveys that the candidate is important to the organization," said Victoria Hodgkins, chief executive of PeopleKeep, a benefits administration software company. "In this work environment, candidates want to know that, and it gives them a chance to ask questions and become more informed."
Study worker usage patterns, lean into popular perks
Small businesses generally can't afford to offer the full suite of benefits that large companies can, but they can offer an array of highly desirable benefits that employees regularly use. "Determine what people are actually using and those are the ones you should be promoting because clearly those are the ones people value the most," Lebovits said.
Notably, benefits related to retirement, health and welfare can go a long way in improving workers' financial wherewithal. While most workers believe these benefits are important, there's a significant gap between the percentage of those who cite their importance and the percentage whose employers offer them, according to an October study from the Transamerica Center for Retirement Studies. "This represents 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 found.
Generally speaking, wellness benefits are also in high demand. A notable majority of employees, 68%, said that they are more likely to stay longer at their current job if their employer offers financial wellness benefits, according to a recent survey from TalentLMS, a learning management system backed by Epignosis, and financial wellness companies Tapcheck and Enrich. The survey also shows that 61% of employees are more likely to stay at their current job if financial wellness training and resources are offered.
Parental leave is another important benefit worth considering. A recent survey from disability insurance provider Breeze found that most employees would prefer their employer offer paid parental leave instead of vision insurance, employer-paid fitness or mental health benefits, employer-paid social events, or a student loan repayment benefit. The survey looked at 1,000 actively employed adults between the ages of 22 and 40.
Avoid an all-benefits-are-equal approach
It's important to offer an array of benefits that can appeal to different people.
For example, don't just offer yoga or meditation apps or gym benefits; offer multiple ways employees can recharge, Lebovits said. "People take care of themselves very differently."
And while the Breeze study found parental leave to be more popular than vision insurance among workers 40 and under, that might change once they hit "reading glasses" age.
There can be significant differences in the types of benefits that appeal to employees based on genders, age and types of work environments.
A May survey of more than 900 small business employees by PeopleKeep found that 70% of women value mental health benefits as "very or extremely" important, compared with 49% of men. Women also value flexible work schedules (84% to 70%), paid family leave (73% to 61%), and professional development (64% to 57%) more than men, while men place more value on internet and phone bill reimbursement than women (40% to 32%), according to the survey.
Turn existing employees into referral sources
If your existing employees are happy, they'll be more likely to recommend an open position at the company to others. This means making sure existing employees are excited about the benefits you offer — and to achieve this outcome, you have to make sure employees feel engaged.
Sixty-two percent of respondents to a recent survey from Edelman Financial said they "don't always feel represented" in their company's messaging about benefits. The sentiment stands out even more among women, with 68% saying they did not always feel included – considerably higher than their male counterparts (58%).
An overwhelming 93% of employees who don't always feel represented said they'd be more likely to take advantage of financial wellness support if it was personalized 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 play up these advantages in all of their communications with candidates. Seventy percent of small businesses cited a sense of community, followed by workplace flexibility (69%), close relationships with co-workers (66%) and closer relationships with managers (53%), according to Homebase.