For most small business owners, 2018 has been a good year. In fact, the majority expect to report year-over-year revenue growth, and more companies expect to hire more workers in the new year, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report.
That's good news, but there's a dark cloud on the horizon. Many small business owners are worried about finding qualified employees to fill expected openings in what has become a very tight labor market.
"Small business owners are eager to expand their businesses and take advantage of a healthy economy," said Bank of America Head of Small Business Sharon Miller in a press release. "While we are seeing an increase in hiring plans and loan applications, today's competitive job market has created a challenging environment to attract and retain small business talent."
How big is the problem?
Unemployment has been hovering around record lows, and job openings have been increasing, In fact, there aren't enough available workers to fill all of the open positions, though that situation may improve somewhat after the holidays.
That creates a problem for small businesses looking to add workers, and it could place a constraint on growth. Nearly 7 in 10 small business owners expect to expand in 2019 (up from 59% in fall 2017), and 27% of those plan to hire (up from 16% in the previous survey).
To find workers, small business owners and managers are changing some tactics to become more attractive to potential employees, This, according to the 1,000 small business owners who were surveyed, includes:
- Offering a more flexible workplace (shifting hours, expanded time off) (25%).
- Recruiting more on social media (23%).
- Paying more (17%).
- "Promoting how the business impacts the local community and highlighting charitable work" (12%).
- Hiring an outside firm to help in recruiting (9%).
Hiring in a challenging environment when big companies are after the same worker requires a willingness to think outside the box. Small business owners can do things that aren't easy for bigger companies to pull off. You can allow a split shift of some work from home, for example, if it means landing the right employee.
You may not be able to pay more than a bigger rival, but you might be able to offer a better overall package. Work/life balance matters for many employees, and you can offer that in a way larger companies can't promise.
What else can you do?
It's important to develop your own workforce. That can mean promoting from within, or recruiting people you believe can do the job, even if they don't have the needed experience.
Your whole company should be a learning opportunity. Offer training opportunities at all levels. Consider adding paid interns so you can identify future employees and sell them on the advantages of working for you.
Hiring is an ongoing process. Even when you don't need workers, you should be looking at who you might hire, or where you would recruit from when you need somebody. Then, when it's time to hire, you won't have to slow your growth while you desperately try to find the right person.
The $16,728 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
The Motley Fool has a disclosure policy.